Page 4, 18th March 1988

18th March 1988
Page 4
Page 4, 18th March 1988 — Taking money from the poor o give poorer

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Locations: Liverpool, London


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Taking money from the poor o give poorer

THE GOVERNMENT claims that the changes to the Social Security system which come into effect on April 11 will ensure that benefits will end up where they are most needed.

That the target groups for state benefit will be different from that date forward is not in question, but as one charity's spokesman put it: "Taking money from the poor to give to the poorer is not what we usually mean by redistribution of wealth".

Among those who stand to gain by the changes are lowincome families where parents are in full-time work. According to the Government, such families will gain on average £1.50 a week in benefits.

Among the losers will be many pensioners who were previousfy abfe to ciaim up to £7 a week in rate rebates. If the pensioner has a "nest egg" of £6,000 then s/he will lose any such benefits. Perhaps the most important difference in the system, however, will be with regard to those who claim a "one-off' payment for a special need.

Until April 11, anyone who is entitled to such a payment, for example for a cooker or a bed, should receive the money. After that date though, the money will come from a "Social Fund", and will only be given as a loan. The amount will then be deducted from that person's weekly benefits until the cash is repayed.

Mervyn Kohler of Help the Aged has warned that the loan system of the Social Fund may leave many elderly people much worse off. "Pensioners loathe to borrow because they don't want to get into debt. The new fund isn't very attractive to anyone with that attitude. On the whole, it's very bad news for the elderly population".

The first stage of the Social Fund was implemented in 1987 with the abolition of the universal death and maternity grants, but the second leg promises to save even more money for the Government.

The new fund will operate a discretionary scheme, limited by the amount of cash available to each local authority at the particular time when a loan is applled for. The Chid Poverty Action Group suggests it is possible that assistance will be rationed as money runs low and that "the pattern of help will vary from month to month, depending on how much money there is".

Moreover, there will be no independent right of appeal by a claimant who has had an application rejected, only an "internal review" of the contested decision. Even those groups that will benefit from the changes by gaining an extra pound or two a week, will be worse off if they find themselves needing to carry out vital household repairs or without a cooker — hence in need of a loan.

News of the changes has already resulted in panic among some current claimants. Citizens' Advice Bureaux normally deal with many enquiries about social benefits, Brian Dooley examines next month's changes to the social security system and finds there will be few winners and many losers.

and estimate that more than 20 per cent of all their business is related to these payments. In recent weeks, there has been a massive increase in the numbers of those seeking advice from their local bureau. Other advice centres are similarly inundated, while the information dispensed about the changes is not always cheering.

Annie, who is 22, went to the Piccadilly Advice Centre in London last week to find out how she would be affected by the new regulations. She came to London from Liverpool a few years ago in search of work, but had to leave her uncle's flat in Hackney when he started to sexually harass her.

She moved into a hostel where she receives board and lodging payments of £65.80 a week. Of this, £25 goes toward the accommodation charge, leaving her with £40.80 for food, travel and college expenses (she goes to college three days a week to gain additional qualifications).

She is due to move into a housing association flat in April, and although her rent will be paid in full by housing benefit, she will have to find 20 per cent of her rates and the money for her water rates. She will now be left with about £22 to £26 for food, bills and other expenses (the full amount is not clear yet as the new regulations are often vague and confusing).

Luckily, she has already applied for a special payment from the DHSS to help furnish the flat, and has received £400. If she had waited until she actually moved in, she would only have been eligible for a loan from the Social Fund, which she would have had to repay at a rate of 15 per cent of her benefit per week, reducing her weekly "disposable income" to £18.15.

Overall, the Child Poverty Action Group estimates that 3.65 million people will lose out as a result of the changes, while only 3.19 million will gain.

The National Council for One Parent Families gives examples where the changes will hit hardest, and claims that the losses will be largest for those whose needs are greatest.

The organisation cites the case of Mrs A, who has diabetic child aged eight. They live in rented accommodation which is damp and difficult to heat. They have been on benefit for more than a year and she pays rates of £6.50 and water rates of £1.40 a week. She will be £9 a week worse off under the new scheme, and of course will only be granted loans in future for special one-off payments.

The advice from many organisations is claim while you still can. The closing date for singular payments is Friday April 8, although some local offices have introduced a cut-off date before that.

After April 11, it will be too late. Peter Lewis of Help the Aged said: "People will have no choice, they will just have to manage. One man told me he'd come through the blitz so he was sure he could come through this. Most old people will be suffering about it quietly, of course. They usually do."

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