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Poverty and welfare reform

James Browne of the Institute for Fiscal Studies spoke about how welfare reforms will affect household incomes at the Law Centre’s 9 December AGM.

Research from the Institute for Fiscal Studies has shown that Northern Ireland is the second worst affected region in terms of loss of percentage income as a result of changes to tax and benefits between 2010/2011 and 2014/2015. London is the worst affected, partly because the very richest households lose the most as a percentage of income from these changes, and many of these are in London. By contrast, relatively few of the very richest households in the UK are in Northern Ireland.

‘Families with children are particularly badly affected by tax and benefit changes, and Northern Irish families tend to be larger than those in the rest of the UK.  In addition, Northern Ireland has a much higher proportion of its population claiming Disability Living Allowance, who will be adversely affected by welfare reform.  These are the key drivers behind the greater average impact in Northern Ireland’ said James Browne.

His speech also analysed the impact of Universal Credit on the incentives to move into work.  James Browne noted:

‘The incentive to do low-paid work is stronger under Universal Credit for single people and those in couples without a partner in paid work.  But Universal Credit weakens the incentive for both partners in a couple to undertake paid work rather than just one.  However, extending work search requirements to more benefit claimants and imposing harsher sanctions on those who do not comply will also have an impact on claimants’ employment decisions.’

‘We are likely to see our own Welfare Reform Bill placed before the Northern Ireland Assembly in March 2012.  This will be the most significant piece of welfare legislation for a generation.  We will already be doing some things differently as we have no Work Programme and will not be devolving the Social Fund or our rate rebate scheme to local authorities.  It is important to look at how we can take an approach that meets the needs and circumstances of Northern Ireland.  We are delighted that the Institute for Fiscal Studies can help stimulate the debate in advance of the legislation.’ said Les Allamby, Director of the Law Centre.

Eileen Evason, Chair of the Social Security Standards Committee , spoke eloquently about the impact of welfare reform on communities already stricken by the recession and expressed concern that in the current climate, the move to increased conditionality and stricter work capability assessments are counter-productive.   Anne McCleary,  Head of Policy and Legislative Division, DSD, recognised the concerns expressed by trade unions and voluntary organisations and argued that welfare reform will be applied sensitively.

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