Welfare Reform Act 2012 to bring fundamental changes

Posted 29/03/2012

The Welfare Reform Act 2012 will arguably lead to the most fundamental reform of the welfare state since its post-war introduction. The changes to welfare benefit entitlement will affect clients who claim means-tested benefits, Employment and Support Allowance (ESA) and Disability Living Allowance (DLA).Firstly, contributory ESA will from April 2012 only be paid for a maximum of 52 weeks if the claimant is placed in the work-related activity group. After that, such claimants will only continue to qualify for ESA if their income and capital are low enough for them to qualify for income-related ESA. The 52 weeks includes time prior to April 2012, which means some claimants face having their ESA stopped from April 2012, or in the subsequent months.In due course, the main change facilitated by the Act is that Universal Credit is to be introduced from October 2013. This will replace most means-tested benefits and some social fund payments. The other notable change is that Disability Living Allowance (DLA) will be replaced by Personal Independence Payment from April 2013.This new benefit will have many similarities to DLA. There will still be a mobility component and a daily living component (which is equivalent to the care component of DLA). However, it is widely believed to be a costs cutting exercise. The information available about the qualifying tests indicate the criteria will be stricter.