Belfast Telegraph

Welfare reform is not simple, but it needs to be done quickly

By John Simpson

Welfare reform has been portrayed as a direct attack on the most vulnerable people in this community.

This over-simplification of the issues and the proposed changes has obscured the range of sometimes difficult policy questions.

In reality, understanding the implications of reforming social security is not straightforward.

There are aspects of the proposals to reshape social security support which are commendable: there are others where the changes may reduce the amount of benefit payable to some people.

Changes in the total social security budget, when they happen, will be phased. The weight of possible changes is more on whether a social security award to an individual is merited and less in an effort to ask benefit recipients to live with a lower scale of allowances.

Reforming the welfare system has a number of components of which the following are major parts:

  • Changes in the tax system including child credits.
  • Bringing six main standard benefit categories into a single Universal Credit system.
  • Reforming the system of housing benefit to incentivise a reduction in spare bedroom capacity in social housing.
  • Re-assessing on a phased basis the award of Disability Living Allowance (DLA) and substituting a new system of Personal Independence Payments (PIPS).
  • Capping the combined effect of the award of benefits to households to avoid unsought outcomes where benefits might be very high in relation to more normal in work earnings.

In Northern Ireland these developments are at different stages.

First, the changes linked to the income tax system have already been introduced, as part of the UK tax code.

Second, the introduction of Universal Credit in GB has been much slower than originally expected and its extension to Northern Ireland is not immediately planned.

Third, the so-called bedroom tax, as part of the reform of housing benefit, did pose immediate hardship for many households who expected to stay in their present housing indefinitely.

Fourth, Northern Ireland has secured a phasing in arrangement that would mean that the bedroom tax would, initially, only apply on a change in tenancy arrangements. Fifth, the capping of cumulative awards to give a better relationship between benefits and average earnings for people in employment seems unlikely to attract serious criticism.

The immediate and real tension in welfare reform seems to lie in the reassessment of DLAs and introduction of PIPs.

Undoubtedly, there are concerns that this change could hit too many people in Northern Ireland.

The tension is less about the possible scale of PIPs and more about the criteria to qualify for PIPs.

Northern Ireland has nearly twice as many DLA payments proportionately as exist in Great Britain. Early official papers suggested that the reassessment process might end with a 25% reduction in DLA, or PIP, awards.

There are two compelling reasons why the welfare reform proposals need to be implemented quickly.

First, the financial penalties on the Stormont budget are seriously damaging. Second, Northern Ireland has, in the past, gained from a system of GB-NI parity. To abandon the parity principle introduces a dangerous precedent running against the usual best interests of Northern Ireland.

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