The welfare mitigation package in Northern Ireland needs another four years beyond its 2020 end date to avoid a “cliff edge” income fall for claimants, a Commons report recommends.
After a joint inquiry, The Northern Ireland Affairs and Work and Pensions Committees warns that ending mitigation payments in March 2020 – in particular, the ending of Social Sector Size Criteria and benefit-cap mitigations – would mean tens of thousands of households in Northern Ireland would see their incomes suddenly fall, some by hundreds of pounds per month.
The report says the impact on households would be exacerbated by the fact that many people simply would not be expecting the payments to end, referencing support organisations in Northern Ireland that describe this prospect as a “cliff edge”.
Following the passage of the Northern Ireland Budget Act, which set out funding for NI departments; and the upcoming end in 2020 of the social security ‘mitigation’ package put in place by the NI Executive, the inquiry will consider the impact of the mitigation package, the operation of Universal Credit (including alternative payment arrangements), and the effect of the two-child limit.
The mitigation package was an additional £585m of welfare spending put in place by the NI Executive as part of the Fresh Start Agreement and is due to end in 2020.
Currently, the package provides payments to offset the benefit cap and the ‘bedroom tax’.
The inquiry found that none of the special circumstances that justified the mitigation package have changed in the last four years.
As such, the report recommends the mitigation package is extended for a further four years beyond March 2020.
The inquiry also examined the operation of Universal Credit (UC) in Northern Ireland, including issues with housing arrears and deductions, recommending that the Department for Communities responds in detail the work underway address the build-up of tenant arrears, and its plans for any future work in this area.
An acknowledged delay in automating the UC flexibilities in Northern Ireland – such as direct payments to private landlords and batch payments to social landlords – has, the report says, required labour intensive processes that “inevitably result in higher levels of error.”
Where the Department for Communities expect the automations to be completed within 18 months, the report says it is important that there is no further delay.
The mitigation package in Northern Ireland reflects the fact that special circumstances can justify different treatment with the clearest example being the impact of the ‘bedroom tax’.
In Northern Ireland, less than a fifth of social housing has only one bedroom but nearly half the people who need social housing are single tenants.
Without mitigation in place, claimants in Northern Ireland faced being penalised for the lack of suitable social housing stock.
The mitigation package is not, however, recognised as a long-term solution to underlying problems within the social security system.
Whilst special circumstances can justify different treatment, by the same token claimants in similar circumstances in different parts of the UK should ultimately level up to similar levels of entitlement, the report says.
Overall, the inquiry found the mitigation package in Northern Ireland has been a success with automatic payment of Welfare Supplementary Payments ensuring claimants receive the payments they are entitled to.
However, the report references the requirement that claimants must appeal a decision to trigger some disability-related mitigation payments could be better advertised and explained to claimants.
While other policies could have been addressed by the mitigation package, there will, the report says, always be a trade-off between mitigating the largest overall financial losses and providing targeted support to the most vulnerable.
The inquiry found a sizeable sum of the funding allocated for the mitigation package has not been spent, with the main reason being that the Cost of Work Allowance was never implemented – because there was no Executive and no Assembly in place to do so.
But the report says this is not true of all the areas of spending, identifying the budget for Discretionary Support Awards and the Universal Credit Contingency Fund as likely to have been underspent because of their restrictive eligibility criteria.
The inquiry found the current criteria to be out of line with practice in the other devolved administrations, and – in the case of the UC Contingency Fund – would require claimants to take on debt before they can access help.
Given this finding, the report recommends that the criteria for Discretionary Support Awards are made less restrictive, with scope for removing a specific income ceiling in line with practice in Wales and Scotland.
There was, the report says, also a case for removing the requirement that claimants must take out a Universal Credit advance before being eligible for grants from the Universal Credit Contingency Fund.