Welfare reform’s impact on older people

Meadhbh Monahan examines the potential impact of the welfare changes.

The population aged over 65 in Northern Ireland increased by 18.9 per cent between 2000 and 2010. During the same period, the population of over 85s increased by 27.2 per cent. This reflects a global trend whereby older people are increasingly living longer due to improved health care and better living conditions.
While the UK Government’s Welfare Reform Act aims to incentivise the working age population into work, it will have an impact on the increasingly ageing population too.

Welfare reform will impact older people in the following ways:
•    pension credit not being available to someone whose partner is below the pension credit age;
•    universal credit replacing housing benefit, working tax credit and employment support allowance;
•    changes to housing benefit, possibly resulting in older people having to move home;
•    personal independence payments replacing disability living allowance (DLA) for those of working age (i.e. up to 65); and
•    benefits moving towards online provision, rather than through face-to-face contact.

The Government is also considering taking ‘passport’ benefits such as free transport from better-off pensioners but the devolved nations will have to make their own decisions on such reforms.

Since the welfare reform announcement, local politicians have been arguing Northern Ireland’s ‘special case’ as an area with high deprivation levels, an ageing population, high unemployment and the Troubles’ legacy of injury and mental illness.

However, it is accepted that a local bill for Northern Ireland will not break parity with Westminster. Owen Paterson has indicated that while the legacy of the Troubles cannot be underestimated, Wales is in a “very similar” position to Northern Ireland regarding levels of DLA and deprivation.

A Northern Ireland Welfare Reform Bill should be introduced when the Assembly returns in September. A look at the changes to be implemented in the rest of the UK gives an indication of what’s ahead for older people here.

In line with universal credit, if an older person is of pension credit age i.e. 65 for men and between 60 and 65 for women (to increase to 66 by 2020) and their partner is below pension credit age, the older partner will no longer be permitted to claim pension credit. Instead, the younger partner must claim universal credit. The current rate of pension credit is £142.70 for a single person and £217.90 for those with a partner. These changes will only apply to new claims and not to couples that are currently claiming pension credit.

Incidentally, a 2009 report by Access to Benefits (A2B) estimated that up to 44 per cent of people entitled to pension credit in Northern Ireland do not access it due to perceived ineligibility, the complexity of the benefit system and a lack of awareness. Many also feel that receiving a means-tested benefit is like “asking for charity,” according to Older People’s Commissioner Claire Keatinge.

Child tax credit will also be abolished, therefore if an older person has children living with them financial help will be provided under universal credit or pension credit. In addition, a person over pension credit age who works in a low-paid job will no longer be able to claim working tax credit.

Housing benefit will also be subsumed into pension credit, with a new housing credit to be introduced in Britain. However, groups representing older people are worried that older private rented sector tenants are already being affected by the limits placed by the local housing allowance (LHA). LHA increases are now to be restricted to increases in the consumer price index (rather than rent). This has prompted further concerns that, if LHA does not cover the full rent, older people will have to make up the deficit or find alternative accommodation.

In addition, a size criteria is now to be imposed on claimants living in social housing, meaning a single older person would be expected to live in a one-bedroom house.
Social Development Minister McCausland has noted these concerns in an equality impact assessment of the reform proposals and pledged to continue to “look at the possible equality impacts as the Bill moves forward.”