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Flexibility in welfare is the key

Department for Work and Pensions Minister Mike Penning recently delivered a bullish message that a financial penalty of £5m a month will commence next month if the Welfare Reform Bill is not passed.

The outline of a deal is on the horizon. Already in the public domain is that the 'bedroom tax', which reduces entitlement to housing benefit in public housing if a claimant has an unoccupied bedroom, will only be implemented for new claimants.

Other flexibilities around paying arrangements for Universal Credit were announced over a year ago. Additional concessions are likely to follow Scotland and include more money for the Discretionary Support Fund and a contingency fund.

Other areas are more problematic, as the introduction of Personal Independence Payment (PIP) will hit Northern Ireland's disabled claimants particularly hard.

Tackling the fundamental structure or the assessment of PIP is especially difficult. Instead, financially supporting claimants, or the Social Security Agency, to get medical evidence and providing access to independent advice maximise benefit take-up for those losing out under PIP.

Other initiatives can be done at little cost, covering, for example, how sanctions are implemented.

The Treasury is open to flexibilities – providing Northern Ireland pays.

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A recent study by York University concluded the savings from 'bedroom tax' in Britain will be a third below the original forecast.

The division on welfare reform is whether any agreement is an opening gambit, or a final deal.

This is not academic, as the recent NICVA report concluded that welfare reform will cost the local economy and claimants £750m.

The promise of extra money from Universal Credit is a long one, as the introduction in Britain has been extended to 2018/2019.

We cannot stave off the Welfare Reform Bill indefinitely, but we can show great imagination to reduce the impact. The threat of a financial penalty is likely to lead to some movement.

Whether it will be enough will be one of the first interesting political issues of 2014.

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