Impact of Welfare Reform for D and G‏

The following article was received by email from Ann Farrell – Branch Chair.

The Scottish Local Government Forum Against Poverty  and Rights Advice Scotland have produced an impact assessment on the Welfare Reform Changes.

over the next few years Scotland stands to lose between £514 – £614million from its economy. This equates to every woman, man and child in the country having their spending power reduced by approximately £99 – £119 each year.

In the shorter term Scotland’s councils, themselves expected to cut around £1 in

every £4 that they currently spend, are likely too face huge increases in the

demands for their services; particularly in the areas of social work, housing and

advice. Efforts to meet this increased demand will in turn have a detrimental impact on other services such as education, leisure and cleansing

Possible loss of income to Dumfries and Galloway

Housing Benefit

More than 75% of 1,500 claimants will be affected by total annual losses of approximately £681,000

Disability Living Allowance

Total number of claimants (10,070) will be cut by 20% leading to annual losses of £7,881,260

Incapacity Benefit/Severe Disablement Allowance

Total number of claimants (5,930) will be cut leading to annual losses in the range of £3,347,039 – £5,814,293

Annual losses to D&G residents = £11,909,300 – £14,376,554

Change from RPI to CPI

2,998 Jobseekers Allowance recipients will lose £141,923 annually

3,570 Carers Allowance recipients will lose £168,932 annually

4,910 Attendance Allowance recipients will lose £273,328 annually

16,905 families recieving Child Benefit for 28,880 children will lose £3,956,568 (£2,511,223 if CPI used) over the course of 3-year freeze (pro rata £1,318,856 each year)

1,060 Employment Support Allowance recipients will lose £61,734 annually

4,100 Income Support recipients will lose £238,784 annually

5,140 Incapacity Benefit recipients will lose £304,523 annually

Annual losses to Dumfries & Galloway residents = £2,508,080

Public Sector Pensions

While steps have been taken to protect the value of state pensions little has been

reported on the proposed impact of linking public sector pensions to the CPI instead of the RPI. This change has been widely overlooked but its impact cannot be overstated. – a pensioner in receipt of a £10,000 annual pension from their former public sector employer will lose almost £60,000 over the next 20 years of their retirement if the RPI-CPI differential remains at today’s level. In 2030 that pension will be worth £18,415 using CPI rather the £25,540 it would have been worth if the link to RPI was maintained.

 The loss in pension earnings of more than £17billion over the next 20 years will be a major loss to the wider Scottish economy.

 The average local government pension is currently

£4,700 a year. Over a 20-year period the average local government pensioner will lose £27,931 and at current levels their pension will rise to £8,655 using CPI levels their pension will rise to £8,655 using CPI instead of £12,004 under RPI