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Jim McGonigle District Manager East & South East Scotland Lyndean House, 199 Commercial Street, Edinburgh, EH6 6QP Telephone 0131 5558070 Fax 0131 5558005 Textphone 0845 601 6045 www.direct.gov.uk

Kezia Dugdale MSP The Scottish Parliament Holyrood Edinburgh EH991SP 11 May 2012 Dear Ms Dugdale Welfare Reform Act 2012: benefit cap I am writing to provide you with information about the introduction of the benefit cap and to advise you of the steps DWP is taking to support claimants affected. Background On 8 March 2012, the Welfare Reform Bill received Royal Assent in both Houses of Parliament. The reforms within this Bill will bring about the most fundamental changes to the social security system for over 60 years. The benefit cap is one of the measures included in the Welfare Reform Act 2012. What is it? From April 2013, the Government will introduce a cap on the total amount of benefits trat working-age people can receive, so that households on out-ofworK benefits should no longer receive more in welfare payments than the average weekly wage for working households. Based on current forecasts on wage levels in 2013, the cap will be set at around 500 per week for a couple and single parent households, equivalent to a 35,000 gross salary for someone in work and at around 350 per week for single adult households without children. In the short-term, the cap will be administered jointly by Department for Work and Pensions (DWP) and Local Authorities (LAs) and will be deducted from Housing Benefit payments. In the long-term it will form part of the new Universal Credit system.

Part of the Department for Work and Pensions

INVESTOR

IN PEOPLE

Why is a cap being introduced? The Government believes that there should be a limit on the overall level of benefit it is appropriate for the state to provide to those who are not working. They want to restore fairness to the claimant through making work pay and provide fairness to the taxpayer by ensuring money is not wasted on trapping people on benefits. Households entitled to Working Tax Credit will be exempt from the cap to help ensure that someone in work will be better off than if they were on benefits. How will the benefit cap be implemented? The benefit cap will take effect from April 2013. From May 2012, DWP will identify and make contact with claimants potentially affected through the issue of a direct mail letter. This will give claimants almost 12 months notice of the changes; providing them with a Helpline telephone number and the offer of an appointment to talk through with a DWP adviser the help and support available to them. The support on offer to claimants affected. This is a significant change and DWP is working closely with LAs to ensure a smooth transition. We will know who the people are who are likely to be affected by the cap and we have advisers who will inform them of the existing support and provision available through DWP - the Work Programme and Work Choice, to help them find work. On receipt of system generated reports, DWP Districts will be contacting claimants to ensure they have received the notification and to offer support. Where appropriate, claimants will be encouraged to participate in employment support to help them find work. For those claimants whose immediate concern relates to housing and accommodation, they will be sign-posted to the LAs for advice. Our Employer and Partnership Managers will continue to inform stakeholders and support the changes through the Customer Representative Groups and Employability Forums that operate across the District. What should claimants do? If you are approached by your constituents on this matter you can make them aware that there will be no change to their benefits until April 2013 and inform them of the support available via the Helpline available from 9 May 2012 Helpline Number: 08456057064 (text phone 08456088551) Welsh Language line: 0845 6057066.

More information You can find out more information about the Welfare Reform Act 2012 via the DWP website here http://www.dwp.gov.uk/policy/disability/welfare%2Dreform%2Dbill%2D2011 % 2 Dand%2 Ddisabled/ I hope that this information is helpful to you. If you require any further information please do not hesitate to contact me. If you should receive any questions from your constituents, a Question and Answer brief is included at the end of the letter

Yours sincerely

J McGonigle District Manager