Official Report: Minutes of Evidence

The Chairperson (Mr Maskey): I formally welcome Anne McCleary, Michael Pollock and Tommy O'Reilly. What we are hoping for from you is a summary of the amendments and the general process of the Bill in the circumstances we are now in. Are members content that we wind up the meeting before 12.00 noon?

Ms Anne McCleary (Department for Social Development): I begin by thanking you, Chair, and Committee members for affording us the opportunity to brief you in advance of Consideration Stage. As the Chairman has just said and as members will be only too well aware, it has been almost two years since the Committee completed its scrutiny of the Bill. A lot of water has passed under the bridge since then, particularly but not exclusively in the last few weeks, when there was further discussion. It is in that context that the Minister has tabled amendments to the Bill. I think that all present today would accept that social security legislation is among the most complex, and it is rare for any individual piece of legislation, whether a Bill or a regulation, to stand alone without reference to other legislation. Therefore, it can appear impenetrable, and that is particularly the case with amendments.

I turn to the ministerial amendments. Some are technical; others are necessary to effect the welfare reform elements of recent discussions. Our aim today is to take you through the amendments and answer questions on those and on the process.

We start with the first set of amendments. The first is to clause 26, which is in connection with the higher-level sanctions in universal credit. This clause, as originally drafted, provided for sanctions of up to three years for the most serious failures. The amendment will reduce the maximum sanction to 18 months.

The next clause that the Minister proposes to amend is clause 47, and this is similar. It is higher-level sanctions in relation to jobseeker's allowance (JSA). Again, the clause, as drafted, provides for sanctions of up to three years for the most serious failures, but the amendment will reduce the maximum sanction to 18 months. The third clause in this group is clause 50, which covers the higher-level sanctions for contributory JSA. This clause, as drafted, provides for sanctions of three years for the most serious failures. Again, the amendment reduces the maximum sanction to 18 months.

We then move on to clause 63, which is to do with entitlement to work and maternity allowance and statutory payments. The clause, as drafted, introduces a new condition of entitlement to maternity allowance and all statutory payments, so that people who are not entitled to work in the UK will not be entitled to maternity allowance or statutory payments. That is the clause as drafted. The amendment will take account of the name change. The Work and Families Act (Northern Ireland) 2015 renamed as statutory paternity pay what were previously known as ordinary statutory paternity pay and additional statutory paternity pay.

Clause 63A is about entitlement to work and statutory shared parental pay. It is a new clause. The Work and Families Act (Northern Ireland) 2015 provides the basis for new rights to shared parental leave and pay in Northern Ireland. Clause 63A will ensure that only those parents who are entitled to work in the UK are entitled to shared parental pay.

Clause 111 deals with the period for withdrawal of agreement to pay a penalty. The clause, as drafted, reduces the period during which the claimant can withdraw agreement to pay an administrative penalty from 28 days to 14 days. The amendment we are proposing removes this clause from the Bill, meaning that what is known as the cooling-off period will remain at 28 days.

Clause 112 and schedule 12 are both about civil penalties for incorrect statements and failure to disclose information. The clause, as drafted, introduces a new civil penalty to be imposed on those who negligently make incorrect statements or who fail without reasonable excuse to tell the Department of a relevant change of circumstances resulting in an overpayment. The amendment removes this clause from the Bill. Repeals listed in schedule 12 that relate to clause 112 will also be removed. The civil penalty clause is therefore coming out entirely.

Clause 117 is to do with information-sharing in relation to welfare services. The clause, as drafted, replaces the information-sharing gateway in section 39 of the Welfare Reform Act (Northern Ireland) 2007 and broadens the scope of data-sharing provided for under the existing section. It will allow relevant information to be shared between the Department, relevant bodies, the Northern Ireland Housing Executive, Land and Property Services and other service providers to help make front-line public services more efficient. The amendment adds the Department of Justice to the list of qualifying persons to whom information can be supplied. This will enable the sharing of social security data for the purpose of remission of transport charges for prison visits.

Clause 120A is about reports by the Department. It is a new clause providing for an annual report on sanctions to be produced and laid before the Assembly.

Clause 129 is to do with orders of the Secretary of State under the Social Security Administration (Northern Ireland) Act 1992. The purpose of clause 129 was to amend section 165 of the Act to correct a flaw in the law. However, because of the delay in the Bill coming forward, the National Insurance Contributions Act 2014 carried that amendment and corrected the flaw. Therefore clause 129 is no longer required.

Clause 130A is a new clause to do with discretionary support. It provides for discretionary support, which is the replacement for the social fund. The new provision has been designed to ensure that support is properly targeted to address the highest-priority need of those on low income. Clause 130B is to do with the discretionary support commissioner. Again, it is a new clause that defines the recruitment, role and responsibilities of a discretionary support commissioner and their staff.

Finally, in terms of the Department's amendments, we have clause 133, which is to do with commencement. They are all there. The commencement dates for the new sanctions regime are being aligned with universal credit. The commencement date for the rate relief scheme is being deferred. It includes commencement dates, where appropriate, for provisions that have already commenced in Great Britain.

Those are the amendments that have been tabled by the Minister. We are happy to take any questions on that or on the process.

Mr Brady: Thanks for the presentation, Anne. Will the discretionary support commissioner be similar to the social fund commissioner and the social fund inspectors that currently exist?

Mr Tommy O'Reilly (Social Security Agency): Yes, it will be. The social fund commissioner will come to an end when the discretionary elements of the social fund are abolished. Therefore, we are making provision for an independent review, and that is the appointment of the discretionary support commissioner.

Mr Brady: Presumably, it may be a different person.

Mr O'Reilly: It will be a public appointment, so it will be.

Mr Brady: Anne mentioned people on low incomes. Would they include people on the minimum wage but who would be maybe classified as the "working poor"?

Mr O'Reilly: The proposal at the moment is that the scheme we are developing would be extended to low-income families. We are bringing that forward in due course.

Mr Brady: OK, thank you.

Mrs D Kelly: You said that discretionary support would be targeted at those most in need. How are you going to define that? Is the current amount available for such support going to be ring-fenced or enhanced?

Mr O'Reilly: What we are proposing at the moment, Dolores, is that people who are currently able to access the discretionary elements will be able to do so. We have come up with a formula for determining income for low-income families who are working. All those proposals will be set out in a public consultation document that we will be bringing forward to the Executive and the Social Development Committee before going to public consultation.

When the feedback comes back from the public consultation, we will review that position. The intention is to ensure that the funding is targeted at the most vulnerable and those most in need.

Mrs D Kelly: Given that you are going out to consultation on the new system, what is going to be in place until that is consulted upon and agreed?

Mr O'Reilly: The social fund will continue, Dolores, until the discretionary support scheme comes into being, so one will cease and one will start at the appropriate times.

Mrs D Kelly: Will the changeover between the discretionary support commissioner and the social fund commissioner also be concurrent? What will be the difference between the two?

Mr O'Reilly: At the moment, the social fund commissioner is looking specifically at aspects of the social fund. The Department's intention is to appoint a commissioner who will look at the discretionary support scheme in the first instance. However, we are making the provision wider in that we also have discretionary housing payments at the moment for which we do not have an independent review mechanism.

We are trying to put in position a post, with support, that will allow for a review mechanism for all the discretionary elements that the Department currently utilises. Therefore, you will get greater transparency, and accountability through to the Assembly.

Mrs D Kelly: Will that be the appeal mechanism for persons to apply to?

Mr O'Reilly: Yes because discretionary support is not done on a statutory basis. It is done on the basis of the Financial Assistance Act, therefore it is a discretionary payment. This is to allow people who feel unhappy with a decision to have some form of review undertaken. That will be the role of the commissioner.

Mrs D Kelly: Will all the consultation and guidance set out how that is going to be done and achieved, and will the terms of reference and parameters be consulted on?

Mr O'Reilly: Yes.

The Chairperson (Mr Maskey): Mickey, are you looking to follow up on that issue?

Mr Brady: Yes. At the moment, there is no appeal on the discretionary element of the social fund.

Mr O'Reilly: Yes.

Mr Brady: It is first stage review, second stage review —

Mr O'Reilly: Yes.

Mr Brady: — social fund commissioner, where the social fund inspectors get involved. Is it the intention to still have that kind of system, which would be a review rather than an appeal?

Mr O'Reilly: Sorry? As distinct from an independent appeal service?

Mr Brady: Yes.

Mr O'Reilly: It is a review mechanism with the commissioner and the officers carrying that out.

Mr Brady: So, it will be similar to —

Mr O'Reilly: Similar to that, yes.

Mr Allister: If the various changes are made, will you give us an outline of how the social security system, as applied in Northern Ireland, will differ from GB?

Mr O'Reilly: In respect of which aspect?

Mr Allister: Any aspect. There are costings, and I want to get to how that is going to work through. As an overview, what would one see as the key differences?

Mr O'Reilly: In respect of the proposals put forward by the Minister, probably the biggest difference will be the question around sanctions; there will be a different sanction regime.

Mr Allister: You mean the 18 months as opposed to three years.

Mr O'Reilly: Yes, in terms of the question around the civil penalty. There are also issues around the question of the cooling-off period.

I cannot say in terms of the national system, but when the social fund was abolished in GB, the powers were delegated to local authorities. Different local authorities have taken a different attitude towards how they intend to provide emergency financial assistance to people, if they provide it at all. Therefore, we have a patch-quilt type of service across GB at the moment. The Minister has decided that he wants to ensure that there is a discretionary system in place in Northern Ireland, so, across Northern Ireland, there will be a single system in place that will provide that emergency financial assistance.

Mr Allister: Presumably, that is where the cost differential comes in.

Mr O'Reilly: The cost of the —

Mr Allister: The fact that it is going to cost £x million per annum out of the block grant to make the changes; presumably, that is mostly on the discretionary system.

Mr O'Reilly: The discretionary system moneys were transferred from the Treasury, out of annually managed expenditure spend into departmental expenditure limit spend, so the Executive received all the money they are currently spending. They rely mainly on the money they get, and receipts, so it is a self-perpetuating system. The money was transferred, so no additional cost was placed on the Executive funds.

Mr Allister: Yes, but one reads that, in consequence of whatever arrangements have been made about welfare reform, there is going to be a cost to the block grant. I think that, this year, it is something like £20 million, and, in future years, it could be £70 million or £90 million. Is that right?

Mr O'Reilly: Those are the figures that have been quoted.

Mr Allister: What is informing those figures? Where is that cost arising?

Mr O'Reilly: In terms of the £20 million that has been set aside for this financial year, the Executive have agreed a number of measures that they would like to proceed with in the package that the Minister previously outlined. These are part of the Stormont House Agreement, which has also set forward a number of other schemes. That work is ongoing, and the details have not yet been finalised nor agreed by the Executive. However, based on estimated costs, they have set aside some moneys for them.

Mr Allister: Will those come forward via regulation?

Mr O'Reilly: They will come forward initially through an enabling clause, which will be brought forward for the Welfare Reform Bill, followed by public consultation on a number of schemes, followed by regulations that will put those in place.

Mr Allister: Does the Consideration Stage of the Bill affect any of that?

Ms McCleary: The enabling clause will be brought forward at Further Consideration Stage.

Mr Allister: Right, so it is not here yet.

Ms McCleary: No.

Mr Allister: And that will then enable whatever is required to legitimise the various packages that have yet to be agreed. Is that right?

Mr O'Reilly: That is correct. We will bring forward the detail of the schemes to be agreed.

Mr Allister: And therein lies the burden of the extra cost.

Mr O'Reilly: Therein lies the burden of the extra cost. That is correct.

Mr Allister: One reads about people talking about the packages lasting for five or six years.

Mr O'Reilly: As I said, the detail of the schemes has not yet been confirmed. The Stormont House Agreement set down some parameters for them. Officials are working on the details. As I said, those have to go back to the Executive in the first instance. That is the proposal.

Mr Allister: But those packages, of themselves, are going to create a disparity over the years between the systems prevailing here and in the rest of the UK.

Mr O'Reilly: They are specific to Northern Ireland. Yes, they are.

Mr Allister: So, can there ever be an end point, or do they have to continue in perpetuity?

Mr O'Reilly: As I said, the detail of that has not yet been worked through and has not been agreed by the Executive. The intention is that this will be brought forward in the next number of weeks for agreement by the Executive. Ultimately, it is for the Executive to decide what they want in those schemes.

Mr Allister: The Executive can only decide for the financial year 2015-16, can they not?

Mr O'Reilly: That is all that has been decided for at the moment. The only moneys that have been allocated are those for 2015-16.

Mr Allister: Thank you.

Mr Brady: When it was introduced in 1988, the whole concept of the social fund was that it would protect the most vulnerable. In Britain, there is a real hotchpotch of arrangements, with some local authorities spending no money to protect the most vulnerable and others spending some money. The difficulty is that the money set aside for the social fund, or whatever version of it that they may envisage, is going to other projects and is not being spent where it should. At least the scheme here will provide some conformity, and the most vulnerable — those who need those discretionary awards — will receive those funds.

Mr O'Reilly: That is certainly the policy intent.

Mr Brady: That is what it always was.

Mr O'Reilly: Yes, that is correct.

Mr Allister: Can I ask for clarification on one other thing? Where will we stand on the cap on benefits?

Ms McCleary: We have not tabled any amendments on the cap. I am not sure if amendments have been tabled by other parties or Members.

Mr Allister: The Minister is not amending anything to do with the cap.

Mr Michael Pollock (Department for Social Development): He is not. I think that there is at least one other amendment that queries the elements that go to make up a person's calculated income, which shows whether they are within the cap or whatever.

Mr Allister: But the Department's stance at the moment is to retain the cap. Is that right?

Ms McCleary: Yes.

Mr Pollock: Yes.

Mr Allister: Chairman, the notes that Anne read through were quite informative. Would it possible to get a copy of them?

The Chairperson (Mr Maskey): I was going to ask for that. That would be normal protocol. Anne, would you be happy enough with that?

Ms McCleary: Yes, of course.

The Chairperson (Mr Maskey): They will be circulated to all Committee members. That is very helpful. Thank you for that.

Mrs D Kelly: Will you talk us through the time frames? Will you also take into consideration any additional time frames for whatever the parties agree in relation to easements?

On the bedroom tax, I think that it is true to say that, whilst there might be some break with parity from the GB as a whole, the Scottish Executive and others have brought forward their own models, particularly for the bedroom tax.

Ms McCleary: What do you mean by "time frames"? Do you mean the amendments or —

Mrs D Kelly: Yes. The time frame for the Bill to go through. Given that there are no regulations for whatever the Executive agrees, what would the time frame be for Executive agreement?

Mr Pollock: As with any Bill, once it receives Royal Assent there will be a series of commencement orders. As Anne said, clause 133 amends some of the commencement dates for the various provisions. With all of this, if there are mitigation schemes or other schemes that will replace elements of the social fund — we are trying to merge those schemes, and part of the changes the Minister is seeking to introduce are about aligning things like the sanctions regime with the likes of the introduction of universal credit. All that timing will have to fit together so that one scheme does not end without something else being in place.

There are standard times for consultations and the like that will be fairly focused. As the Bill progresses and receives Royal Assent, you will start to see regulations and commencement orders going through that will put certain provisions into effect. The various provisions listed in clause 133 will come in on Royal Assent. There are a few others. As I said, the ministerial amendment in that respect is to try to ensure that everything is congruent at this time.

Ms McCleary: Some of the timing is dependent on when the Bill comes in. Where there is an enabling clause, will have to wait for the regulations to come through.

Mr Pollock: We also have to tie in with Tommy's people on the operational front and on the availability of IT to make sure that the operational changes to the Department for Work and Pensions (DWP) IT system are available for the launch of any new provisions.

The Chairperson (Mr Maskey): Do you have a schedule for the Bill going through the Assembly?

Ms McCleary: A timetable? Yes.

The Chairperson (Mr Maskey): That would be handy. OK, there are no other members asking for any further information. Do you have anything else that you want to add?

Ms McCleary: I do not think we have.

Mr O'Reilly: No.

Mr Brady: I have just one question about the IT system. Are you confident that that can be achieved?

Mr Pollock: It is DWP's IT system, so we are happy enough that we can get the releases that we need and that are envisaged.

Mr Brady: Will there be bolt-ons to the IT system?

The Chairperson (Mr Maskey): This is not Carphone Warehouse. That is another, separate discussion, with all due respect. Thank you, Anne, Tommy and Michael for your help this morning.