Scottish Social Security Consortium

Minutes of meeting 25 November 2002

Present: Abigail Bremner Citizens Advice Scotland
David Brownlee Age Concern Scotland
Mathew Crighton Capital City Partnership
Marion Davis One Plus
Susan Drew Highland Advice and Information Network
Ann Henderson Assistant to Susan Deacon MSP
Judith Paterson Child Poverty Action Group in Scotland
Vanessa Taylor Scottish Churches Parliamentary Office
Jo Whitfield The Action Group

Apologies:
Richard Norris Scottish Association of Mental Health
Susan Elsley Save the Children
Rosemarie McIlwhan Scottish Human Rights Centre
Leah McKend Drumchapel Law and Money Advice Centre
Stephanie Miller Update

The following MSPs also sent apologies:
Phil Gallie MSP Elaine Thomson MSP
Murray Tosh MSP Nicol Stephen MSP
Fergus Ewing MSP Karen Gillion MSP
Marilyn Livingstone MSP Donald Gorrie MSP
Mike Watson MSP

Welcome
Danny welcomed everyone to the meeting and, for the benefit of those who were not members, outlined the group's remit to share information on social security benefits and to tackle both policy and rights issues.

Context
Danny provided some context to the presentation on tax credits based on the research carried out for a new CPAG/Scottish Poverty Information Unit publication, Poverty in Scotland. Issues raised included:

• When the Scottish Executive stated that they were tackling poverty, they actually meant that they were addressing certain indicators of income poverty. Their performance against these was set out in their social justice annual report.
• There was a great deal of debate over the best way to measure poverty.
  
  – Absolute Poverty measured the affordability of the basic requirements in food and heat.
  – Relative Poverty looks at income relative to other members of a society – the European Union accepted definition is that those living on 60% or less of median income are in relative poverty.
  – Asset Poverty is a term used more often in a global development context and refers to assets such as skills and education as well as property or savings.
  – Social Inclusion looks at the way those in poverty are excluded from participation in various aspects of society and seeks to measure this exclusion.
• 
  Key statistics, per head of population, for Scotland included the following. Only 3% of the population claim WFTC. 15% claim IS and 13% claim DLA. 34% claim an income-based benefit. 72% claim some sort of social security benefit.
• There was evidence that parents would go without to provide for their children, which meant that indicators of household income did not necessarily pinpoint child poverty. However, an improvement in the household position may mean that, while the child's position stays the same, the parent(s) want for less.
• The government is committed to ending child poverty by 2019. However, figures for Scotland suggested that they were having difficulty shifting some of the indicators. They claimed to have lifted 1.2 million children out of poverty by the end of their first term but had, in fact, only lifted 500,000 on the basis of their own, relative measures.
• Much of what had been done by the government to tackle poverty affected those on the borderline - ie. those who were just below the poverty line being lifted to just above it. There was a feeling that very little had been done yet to tackle 'depth' of poverty.
• The government's policy initiatives in addressing poverty were to make work pay – through the national minimum wage, tax credits and changes to the benefits system, and to make work available (rather than creating it) – through New Deal training, changes in the structure of Jobcentres etc.

Tax Credits
Judith provided an overview of the tax credits system to be introduced in April 2003. It was noted that this would be a radical overhaul of the benefits system and would include the abolition of numerous benefits currently in existence. It would also affect certain 'passport' benefits under the control of the Scottish Parliament, such as healthcare costs, free school meals, legal aid, housing improvement grants and community care charges. All in all, 70,000 people were expected to 'float off' Income Support as a result of tax credits, bringing their entitlement to passport benefits into question.

The following issues surrounding tax credits were highlighted in the presentation:

• The change from Family Credit/Disability Working Allowance to WFTC and DPTC in October 1999 was really very cosmetic: however, the change from WFTC/DPTC to Working Tax Credit and Child Tax Credit would have a much bigger structural impact.
• Child Tax Credit would replace Children's Tax Credit – the current, in-work Income Tax allowance for children - as well as the child premiums in IS, JSA and the dependant additions in Incapacity Benefit, Invalid Care Allowance and Retirement Pension. Family premiums would also be abolished by Child Tax Credit. One of the key objectives is that everyone with children will be treated the same (as long as they meet the means-test requirement) regardless of whether they are in or out of work. Students will be included in provision for the first time.
• Child Benefit, Housing Benefit, Council Tax Benefit and the adult aspects of IS, JSA, IB, ICA etc. will remain unchanged.
• Working Tax Credit will extend support to those who don't have children or a disability, as long as they are over 25 and work 30 hours or more per week. This is likely to raise take-up issues as this group has never been entitled to support before.
• Child Benefit will be paid on top of Child Tax Credit – this is of particular advantage to those on IS/JSA, who previously had any CB payments deducted directly from their entitlement. However, Child Tax Credit will be paid to the main carer - it cannot be split like the tax allowance.
• Working Tax Credit is made up of the following elements. Parents with children can combine their working hours to reach the 30 hours plus bonus.

• Child Tax Credit is made up of the following elements:

• There is a mistake in the Child Tax Credit claim form - to establish whether there is entitlement to the disabled child element, it asks whether DLA care is in payment, but there are no questions regarding DLA mobility. It is not yet clear what the Government intend to do about this.
• Entitlement to tax credits will be worked out on gross income rather than net income. There is also no capital limit, but all taxable income will be deducted, such as interest on savings or taxable social security benefits.
  
• The income thresholds are £5,060 for the Working Tax Credit and £13,230 for the Child Tax Credit. Those with incomes above these limits will see their maximum payment reduced by 37% of their excess income. The family element of the Child Tax Credit will stay in payment in full until income exceeds £50,000 and then be tapered off.
• Claims are calculated annually on the basis of the previous year's income. At the end of the financial year, any changes in circumstances will be 'reconciled', resulting in potential overpayments or underpayments which will be dealt with from the next year's entitlement. Because there is no final assessment until the end of the year, there is a greater risk of over and underpayments.
  
• Not until income increases by £2,500 since the previous financial year is there a risk of overpayment: however, a claimant can request a recalculation if there is any drop in income.
  
• Claimants are required to inform the Inland Revenue immediately if they have left or moved in with a partner, or if their child care costs change. In other circumstances, they may miss out on entitlement if they do not inform of changes within three months. CPAG advises all claimants to inform the Inland Revenue of any changes as soon as they happen to avoid any complications.
  
• Housing Benefit and Council Tax Benefit entitlement will be based on the actual tax credit amount in payment, not what a claimant may be potentially entitled to.
  
• It was noted that, as Working and Child Tax Credits were not benefits (unlike WFTC and DPTC, they had been specifically removed from this legislative framework), they could be subject to bank and wage arrestments.

Information exchange

• David highlighted that the DWP was producing a UK-wide claim form for HB and CTB. It is recommended that local authorities accept this form but they are not required to. In October 2003, the claim form will be split into pensioner and working age versions to account for the introduction of the Pension Credit.
• Susan drew the group's attention to a DWP consultation entitled 'Pathways to Work' (http://www.dwp.gov.uk/consultations/consult/2002/pathways/index.htm). The consultation dealt with IB reform, and included in the suggestions was a proposal to remove the option to claim IS at a 20% deduction when appealing the result of a PCA. Claimants in this situation would be expected to claim JSA. The closing date for responses to the consultation was 10th February 2003. It was agreed that members of the group would share any responses via e-mail.
  
• Judith noted that legal aid would be available for appeals to the Social Security Commissioners from 1st December 2002. This applied to Scotland only. However, it did create the anomalous situation that, while hearings in front of the commissioners would qualify for legal aid, cases set aside and remitted back to an appeal tribunal would no longer qualify.
  
• David highlighted the DWP's plans to have all benefits paid into bank accounts by 2005. The roll out was underway, with some client groups already being contacted. There was particular concern about the accessibility of bank accounts for older people and other client groups. Claimants would have the option of opening a Post Office card account – however, the Government was keen to discourage people from doing this, as they wanted them to have access to the range of services available from a full bank account. It was noted that CABx had been referred to by the Government as a source of advice on which sort of account claimants should open.
  
• Judith noted that the pilot of a new DLA claims process was underway in Strathclyde and the Western Isles (those areas dealt with by Glasgow DBU). Those phoning the helpline would be asked questions by an adviser to work out which elements of DLA they wished to claim. The information would be used to tailor the claims form sent out to meet the needs of individual claimants - eg. only the care component aspect if this was all that the claimant wished to claim. This could obviously reduce the size of claims forms dramatically. However, there was concern in the group that claimants may not at this stage identify all their support needs effectively. Judith confirmed that claimants could still request that a full form was posted to them for completion.

Topics for Future meetings
The following topics were suggested for future meetings:

• DLA, especially as many changes to the current system were being piloted at the moment.
  
• The Government's proposed changes to the HB system for private tenants.
  
• Payment of benefits into bank accounts
  
• The roll-out of the new Pensions Service, especially issues around joint-working and the way that the local service would operate.

It was agreed that Abi would contact the Pensions Service to get a speaker for the next meeting.

Date of next meeting
It was agreed to set all four dates for next year in advance. The suggested dates are:

Thursday 27th February - Glasgow
Tuesday 13th May - Edinburgh
Thursday 25th September - Glasgow
Monday 24th November - Edinburgh

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For more information contact:
Judith Paterson
Child Poverty Action Group in Scotland,
Unit 9, Ladywell
94 Duke Street,
Glasgow G4 0UW
0141 552 3303
email jpaterson@cpagscotland.org.uk

Abigail Bremner
Citizens Advice Scotland
Spectrum House
2 Powderhall Road
Edinburgh EH7 4GB
0131 550 1000
email bremnera@cas.org.uk