Belfast Telegraph

Sunday 20 April 2014

Sinn Fein 'reneged on welfare pledge' - Wilson anger at £5m monthly coast of impasse

THE DUP has accused Sinn Fein of reneging on a compromise deal on Welfare Reform which would have blunted the impact of UK benefit cuts here.

The DUP said the package was agreed with Sinn Fein representatives as the best way forward last summer but that since then it has been blocked by republicans.

“This is all the more damaging now that Northern Ireland is paying £5m per month with the cost rising. This is due to the failure of Sinn Fein to follow through on what would help to protect the most vulnerable and disadvantaged in Northern Ireland. Sinn Fein’s delay is punishing the weakest citizens,” said Sammy Wilson, the former DUP Finance Minister.

Mr Wilson claims that Sinn Fein agreed the deal with his party and others “almost nine months ago”, which takes us back to June, shortly before he stepped down as minister in July.

Implementing the deal would cost £43.7m this year, £41.9m next year and around £29m for the three years after that.

The Belfast Telegraph has seen these costings in a paper which was circulated by Nelson McCausland, the Social Development minister, on January 28.

The changes it outlined had all been negotiated with Westminster's Department of Work and Pensions, but cannot be implemented unless they are passed by a vote in Stormont.

That in turn cannot happen until they go on the Executive agenda, something which Sinn Fein has so far blocked.

The cost of the deal would be considerable, and would mean cuts in other budgets, but it would be far cheaper than breaking parity with Britain. Going it alone would involve setting up our own IT systems at a possible cost of £1.8bn and an eventual bill of £1bn to maintain the old welfare system that is being phased out.

Today we are revealing the details of the package for the first time. They would cushion local benefit claimants against the so called ‘bedroom tax’, which is being fiercely resisted elsewhere, they would ensure that no existing claimant would lose out if Universal Credit is introduced to replace a raft of other benefits and they would ensure that carers, like mothers, get a share of Universal credit paid directly to them.

Northern Ireland has been facing a penalty of £5m per month since January for not implementing any welfare changes.

Sammy Wilson, who was DUP Finance Minister at the time, gave the background as he saw it.

“Following discussions last summer with other parties, including Sinn Fein, a Northern Ireland-based package of measures was agreed in order to protect the most vulnerable from the worst excesses of the Westminster welfare reform,” he said.

He said Sinn Fein proposed no specific changes when asked and added “all those involved considered this to be a finalised package.”

When we put this to Sinn Fein the party declined to answer specific questions.

However, a spokesman stated: “Sinn Fein's opposition to the Tory welfare cuts is well known. It has been articulated publicly by Martin McGuinness, Alex Maskey and many others.

“We are not prepared to acquiesce to the Tory agenda.

“We have sought to bring about significant change to the bill initially proposed by the DUP and Nelson McCausland in order to protect the most vulnerable and low paid in society. That work continues.”

Crucial parts of deal and how they would be applied here

UNIVERSAL CREDIT PAYMENT

Universal Credit is a 'super benefit' which will replace six of our existing benefits including Jobseekers Allowance, Tax Credits and Income Support and Housing Benefit.

IN BRITAIN: It will normally be paid into a single bank account per household once a month. Both members of a couple must sign a Claimant Commitment, which specifies what each member must do to find employment, and if one member of a household refuses to do so the whole claim falls.

UNDER THE DEAL IN NORTHERN IRELAND: All claimants in Northern Ireland will receive fortnightly payments. There can be split payments to each partner with a higher proportion given to the main carer where there are children. If one partner refuses to sign or honour the commitment the other still gets paid. This is designed to help budgeting and protect the position of mothers and children. If one partner leaves the household other members can submit a new claim.

TRANSITIONAL PROTECTION

Granting Northern Ireland a period of grace for the process of claimants into the new system.

IN BRITAIN: When all the six other benefits are wrapped into Universal Credit, the Westminster government aims to save money, but there will be winners as well as losers. In Northern Ireland it is estimated that over 102,000 households will gain from the change, 99,000 will stay roughly the same and 86,000 would lose out if the British proposals remained unchanged.

UNDER THE DEAL IN NORTHERN IRELAND: There would be no losers amongst existing claimants. They would be protected from any drop in monthly income through payments from a transitional fund which lasts until 2019. New claimants would go straight into the British system and existing claimants could be put out of the transitional system if their circumstances change significantly, for instance if they become ineligible for Universal Credit altogether.

BEDROOM TAX (OFFICIALLY UNDER OCCUPANCY RESTRICTION

Customers should only be able to claim Housing Benefit for the number of bedrooms that they need for their household. Excess bedrooms would cause a reduction.

IN BRITAIN: Under the notorious Clause 69 of the Welfare Reform Bill working age claimants will have their benefit cut if they have more bedrooms in their home than the authorities believe they need. This would hit hard here because we don't have enough one and two bedroom homes for people to move to.

UNDER THE DEAL IN NORTHERN IRELAND: We would soften the blow. A new fund of £16.2m in 2014/15, moving to £17.3 m by 2018/19 would be used to protect current tenants for any reduction in the Housing Benefit for their existing tenancies until they are offered suitable alternative accommodation. In exceptional circumstances there will also be protection for new tenants until suitable accommodation is available through the existing Discretionary Housing Payment arrangements.

DIRECT PAYMENT OF UNIVERSAL CREDIT TO LANDLORDS

IN BRITAIN: The housing element of Universal Credit for social and private sector tenants will be paid directly to the benefit claimant with payments made directly to landlords only in exceptional circumstances.

UNDER THE DEAL IN NORTHERN IRELAND: Payments would normally be paid directly to landlords, though tenants could ask to opt out. This arrangement would make claimants more attractive as tenants as it removes the danger of them defaulting on rent and should make it easier for them to rent property.

Other measures under the deal include the maximum period for which people would be cut off benefits, for instance for making false declarations or repeatedly refusing employment.

This would be reduced from three to two years.

BACKGROUND

The Welfare Reform Act received Royal Assent nearly two years ago but, since welfare is a devolved matter, it cannot be extended here without Stormont's agreement. The snag is that if we don't come into line with the UK shake up, which involves overall cuts, we must make up the shortfall from other parts of the Stormont budget. Simon Hamilton, the DUP Finance Minister, says the cost of breaking with the UK will run into billions but Sinn Fein dismisses this as a fantasy.

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