WIREDGOV

The Minister says making ends meet for thousands of people will soon become a significant challenge as UK Government plans to change the welfare system come into force, including the under occupation charge. The changes will further add to the negative impact of the welfare cuts that have already been implemented over the last two years.

Wales has a higher dependence on welfare benefits than Great Britain as a whole, with the latest statistics (May 2011) showing that 18.4 per cent of the working-age population in Wales claiming welfare benefits compared to the Great Britain average of 14.5 per cent.

Speaking as the new rules come into force, Huw Lewis said:

“Today is a watershed moment. After months of debate and opposition we will begin to see the very real impact the changes to welfare will have on thousands of people’s everyday lives.”

A report recently published for the Welsh Government by the highly-respected Institute for Fiscal Studies, has revealed changes to the UK welfare system will reduce total benefit and tax credit entitlements in Wales by around £590 million in 2014-15.  

An internal Welsh Government report also found that an estimated 42,500 people in Wales will lose their entitlement to Disability Living Allowance, an average loss of up to £83 per claimant per week and an annual loss of up to £183 million in Wales as a whole.

Other changes include a 1 per cent cap on increases to most working-age benefits and tax credits and limiting the amount of housing benefit paid to claimants living in social housing that are deemed to be under-occupying their accommodation.

The Minister said:

“Independent reports show that the proposals will take at least £590 million from Wales and this will have a damaging, destabilising and devastating impact on people and possibly whole communities across the country.

“Many people across Wales will come under pressure to afford their day-to-day living costs; some could be forced to leave their homes after years living there. Some will have to make the tough decision about whether to cut back on the heating or their food. Many will finally lose the daily battle to make ends meet. The path that the UK Government is taking us down will be traumatic for many.

“These changes will not only hit those out of work, but also touch working families on low to middle incomes. Taking away vulnerable people’s spending power will only damage our economy and put further pressure on their lives. No one is denying that there is scope for welfare to be reformed, but the changes being forced through now show little evidence that they will actually have a significant positive impact on employment levels and could even drive people further into poverty.”

The Minister raised concerns about the Welsh Government’s capacity to mitigate the effects of the changes.

He added:

“These changes are the product of Westminster, but the reality is the effects will have to be dealt with by the Welsh Government. That is why I have been appointed as the Minister with responsibility for welfare reform. We will do all we can to help people through these changes and pick up the pieces of the UK Government’s decisions. However, our own budgets are under more pressure than ever before. People have to realise that the welfare changes have the potential to affect public services across areas like health, social care, housing, education, local government and more. We will have to pick up the pieces of the UK Government’s decisions.”

Related Links

UK Welfare Reform in Wales