Welfare reform: changes in the rates rebate scheme

Department of Finance and Personnel – Rating Policy Division, which has responsibility for implementing the changes to the Rates Rebate Scheme in Northern Ireland, is currently carrying out a two stage consultation process

• Stage One: Preliminary consultation (12 weeks until 10 April 2013)
• Stage Two: Further consultation on final policy proposals for interim replacement scheme (later in the year).

NICVA hosted a round table event to bring together the sector to discuss their thoughts and meet with department officials around how the scheme will be developed. Contributors on the day included Brain McClure Director of Policy Division DFP and Les Allamby Director of the Law Centre (NI).

Les Allamby emphasised to the audience the vital importance of this consultation on rates rebate as it remains a devolved responsibility. Parity does not have to be considered in the development and implementation of the scheme meaning that this is an opportunity for the Executive to set up a scheme that is progressive and shaped within an anti-poverty framework that will work for the people of Northern Ireland.

Background

The rebate element of Housing Benefit, is a support measure that helps around 220,000 of the poorest households in Northern Ireland by paying all or some of the rates that are due.

The changes are part of the welfare reform programme initiated throughout the UK by the Government at Westminster, and are occurring in most parts of the UK from April 2013. The Northern Ireland Executive has already agreed, as has the Scottish Government, to cover the funding shortfall from public expenditure in the interim, to allow more time to develop a new scheme. It is important to note that this is a devolved matter and the Executive can choose whom they wish to continue to support (identifying the most vulnerable) and how they fund it.

Nevertheless, the Executive considers it necessary to have a new rates support scheme in place by April 2014, to coincide with the introduction of Universal Credit in Northern Ireland.

The UK Government at Westminster announced in its Spending Review 2010 that support for Council Tax (Council Tax Benefit) would be localised from April 2013 and expenditure reduced by 10% from the same date. The changes will also apply to its Northern Ireland equivalent, the rate rebate element of housing benefit.

Each authority has been tasked with creating its own scheme within a reduced budget and, in doing so, continue to provide support for the most vulnerable while also taking account of the wider aims of welfare reform. As a result the Department has decided that either the number of people receiving support, or the amount of support provided, will have to be reduced accordingly.

Department considerations: Currently,  220,000 households receive support to cover some of their rates dues.

There will be significant changes in:

• Funding
• Transfer from Annually Managed Expenditure (AME) to Departmental Expenditure (DEL)
• Funding reduced by 10%
• Reduction in number receiving support; and/or
• Reduction in the amount of support provided
• Existing scheme = unworkable

The Policy intent is to support the most vulnerable in our society, to make work pay and protect revenues. The system is to work within a cash limited budget. The Department is considering how to develop a system to operate within Northern Ireland Executive powers, that is affordable and deliverable by April 2014 (at a reasonable cost) to coincide with Universal Credit. Consideration will have to be given as to the principles of welfare reform, removal of passporting arrangements and the impact of protecting pensioners/vulnerable groups.

____________________________________________________________

Relevant documents:

Details of the consultation document, and notes from the event can be accessed below.

The Resolution Foundation's report on the impact of council tax benefit changes can be found at here.

To download a copy of the Department of Finance and Personnel's consultation documents please click on the link below

http://www.dfpni.gov.uk/rating-review/index/welfare-reform-consultation-excercise-jan-2013.htm

A copy of the presentation given by DFP at NICVA's event can be downloaded here.

DFP has also provided further statistics to help inform consultation responses on these changes. Please note that these statistics: