Belfast Telegraph

Ulster welfare budget faces £450m cut

Up to £450 million could be taken from Northern Ireland's welfare budget because of reduced funding from Westminster, it has been revealed.

The coalition wants to encourage mothers back to work and is also planning a cut in housing benefits for those still jobless after a year.

Yet with high caring costs and few alternative jobs to seek, Northern Ireland faces severe difficulty in implementing measures replicating Great Britain.

Lucy Cochrane of the Citizens Advice Bureau in Northern Ireland said: "Citizens Advice is very concerned about the impact of the benefit cuts and many clients have already been contacting us and are frightened about how they will be affected, especially people who have long-term health problems.

"The cuts will not only impact those who are worse off financially but will also have an impact on the Northern Ireland economy.

"We are particularly unhappy with the plans for working tax credits and childcare provision which will actually narrow the goalposts for some people wishing to return to work."

Changes because of the spending cuts include:

  • From April, child benefit is to be frozen for three years
  • From January, Job Seekers Allowance claimants will lose entitlement to the support for mortgage interest scheme if they have been on benefits for two years. The interest rate has been reduced
  • From April 2013, housing benefit will be reduced by a tenth if a claimant has been on the benefit for a year
  • From 2013 a compulsory medical examination will be introduced for all new and existing working age Disability Living Allowance (DLA) claimants.

A total of £11 billion was taken out of welfare UK-wide following last summer's emergency budget and another £7 billion was removed in last month's Comprehensive Spending Review.

A £450 billion reduction would apply to Northern Ireland if savings were applied proportionately across all regions. But in areas like southern England with higher rents more savings could be made, lessening the burden on other areas.

A gloomy scenario could force those on benefits from private housing in Northern Ireland or it could encourage them into cheaper areas where there may not be as much work, thus decreasing their chances of finding a job.

The coalition is determined to prevent people from making a "lifestyle choice" to remain on welfare and wants to support people back to work.

Decision makers in Northern Ireland face a choice of implementing the changes or refusing, in which case the savings may simply be taken from the block grant from Westminster which pays for most Northern Ireland services.

At present welfare is separate and funding comes directly from the Treasury with the same administrative system as that in Great Britain.

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