HOUSE OF LORDS

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1



HOUSE OF LORDS

DRAFT
AMENDMENTS

FOR THE

WELFARE REFORM BILL
;



AND T
HE CASE
S

FOR THEM


Introduction:

1.

The Z2K Trust
has

given practical, legal and emotional support to impoverished and
vulnerable
debtors
struggling with complex welfare since the mid 1990s.
We sign
-
post
mortgage and credit card debts to money advisers in order to focus on cases below the
radar.
We were foun
ded in 1995,
regis
tered as a Charity in 1997
,
worked as volunteers for
ten years servicing a contract with Wycombe Magistrates Court to help fine defaulters fill in
their means statements. We have grown rapidly since 1997 by raising funds to employ three
full time lawyers who support a growing number of volunteers, currently 32, servicing a
growing number of cases
,
currently around 90 at any one time; the cases are time heavy.
W
e
also train and provide legal advice to other NGOs. We
have three legally qual
ified
professionals employed fulltime, a parliamentary r
esearcher
and
an a
dministrator.

2.

We are concerned about the increasing

powers
in the Bill
of decision making officials in
jobcentres to enforce overpayments (debts) and impose and enforce sanctions and penalties
(fines)

with few of the safeguards for the innocent and vulnerable that have existed for years
in the county and magistrates courts.
T
he suggestion from the Prime Minister and from the
Secretary of State for Work and Pensions that jobcentres and local authority housing offices
should be stopping benefits of rioters would be a further shift away from the administration
of justice by the c
ourts.

Punitive Welfare

3.

Provisions in t
he Welfare Reform Bill ha
ve

carried the application of the economic theory of
moral hazard to

extremes

and

rel
y

on

exaggerated claims of welfare dependency
.
U
nemployment benefits, already kept low to discourage peop
le from idling on the dole,
are
b
e
ing

reduced
by debts
to an amount incapable of keeping body and soul together

-
see
APPENDIX i.
Overemphasis on the moral hazards when unemployment benefits are too high
has blinded governments to the moral hazards when the
y are far too low.

The Universal Credit

4.

The new Universal Credit will be made up of a

a.

a standard allowance (SA) ,

b.

an amount for children,

c.

another for housing and

d.

one more for particular needs or circumstances.



2


5.

The Bill does not attempt to explain how the level of the SA will be decided. There is no link
to
the escalating prices of food,
other essential needs in the shops or to the utilities. The
Centre for Research is Social Policy has calculated that sometime i
n the next ten years the
weekly cost of a healthy diet
is

likely to overtake weekly amount paid in by the Standard
Amount which, ministers have announced will be £67.70, the current level of the adult
unemployment benefit, uprated by the
less generous
CPI.


6.

The caps on housing benefit and the local housing allowance will leave amount
s

of rent
unpaid so creating debts

which will have to be paid out of the money needed for a healthy
diet.


Official and claimant errors have already created debts, other than £
1billion fraud,
owed to the DWP, HMRC and the Local Authorities totaling £2 billion in 2010.



7.

The Bill insists on enforcing them against poverty incomes disregarding all the evidence from
the Government Office for Science, The Royal College of Psychiatris
ts and Mind about the
relationship between mental health problems and debt.

The housing benefit caps and the
Bill are creating debts for the poorest citizens ignoring the research of the Royal College of
Psychiatrists which shows that 50% of people in deb
t have a mental health problem and 25%
of people with a diagnosed mental health condition are in debt.

8.

In summary
Poverty in the UK is public health issue.

a.

the HB caps , and other welfare cuts , will seriously increase poverty and debt
among the poorest
citizens,

b.

debt and mental illness have been found to be related by the Government Office
for science,


the Royal College of Psychiatrists and Mind, and other researches.

c.

the effects of debt are even worse when incomes are below the government’s
poverty t
hreshold and all independent measures


sometimes far below,

d.

it leads to despair,

even suicide,

when associated with bailiffs, threats of eviction
and actual eviction


e.

debt is debilitating and renders people unfit for work when accompanied with
draconia
n enforcement, we have cases.


f.

Debt and poverty reduce the nutrition of already impoverished women of child
bearing age and before and during pregnancy and therefore put the mental and
physical health of their offspring at risk.

g.

mental

illness , exacerb
ated by


debts which are enforced against inadequate
incomes, costs the tax payer billions in poverty related ill health and educational
underachievement which the Treasury never estimates.

9.

The Centre for Mental Health reported in 2010 that that the total
cost of mental ill health
in England was £105.2 billion a year, including £21.3 billion in health and social care costs,
£30.3 billion in lost economic output and £53.6 billion in human suffering.

10.

The Institute of Brain Chemistry of Human Nutrition has re
ported that low birth weight,
when associated with fetal growth restriction, is the strongest predictor of poor learning
ability, school performance, behavioural disorders and crime.

3



11.

Suggested amendment A.

Clause 8. Calculation of Awards.

Insert (5)

The maximum amount to be awarded in each component part of the Universal Credit in
Clause 1 (3) (a), (b), (c) and (d) shall be decided annually after consideration of
independently researched minimum income standards both before and after the payment
of ho
using costs and council tax.

Brief

12.

Appendix

i
i

shows a list of 70 NGOs supporting the Z2K petition calling for government to
research minimum income standards before setting the level of statutory minimum
incomes.

13.

The Universal Credit is a disappointmen
t. The claims that it is simpler than the current
system do not stand up. It would have been better to make one government department
responsible for all welfare and one local agency in each town responsible for all delivery
and complaints; the move to inc
rease disregards and improve the tapers is welcome but it
could have been done without trying to squeeze all benefits into one; and then failing by
leaving the council tax out.

14.

NGOs are unable to assess the impact of a council tax administered by local au
thorities,
which it is suggested will be capped, until the CLG produce the details. At the moment we
are faced with the possibility that the Bill will complete its passage through parliament
before they are produced.

15.

It is claimed the
Universal

Credit w
ill be
simpler

but in many ways the complexity remains.


a.

the claimants, and the advice sector, have to deal with the magistrates courts, the
local authority council tax department and the bailiffs when dealing with council tax
arrears and overpayments. Th
at will not change.



b.

The claimants, and the advice sector, now have to deal the Housing Benefit
department and the overpayments of the local authority, the separate housing
department if they are council tenants, the RSL or private landlords and the Count
y
Courts and then the bailiffs, when they have rent arrears.

c.

We are concerned that it will be worse without knowing how the DWP,
inexperienced in housing matters, will deal with the housing benefit as part of the
UC. Enforcement of rent arrears will,
we

a
ssume remain, with the county courts.

d.

The amount for children and the amount for special circumstances, such as
disability, will be calculated under two different sets of regulations both of which
will be open to challenge and appeal to the tribunals; aga
in no change.

e.

It will all be liable to overpayments which are the errors of officials or of the
claimants. An addition to the existing procedures is the decision of the DWP to deal
4


centrally with the appeals against the enforcement of overpayments; that w
ill add
complexity.

16.

The standard amount of the UC will be £67.50 described as the “building block” by the
Minister for Employment.

“Hansard,

31
st

March; Welfare Reform Bill Committee.


For the time
being, however, and certainly for the foreseeable fut
ure, we have
formed the view that the

CPI

will be the basis on which we uprate
benefits.


In the standard adult rate of JSA and

ESA
, the basic
component will
be approximately £67.50 a week. That is the building
block that we intend to use for the universal credit. In two years’ time,
once the universal credit has been established, that amount will be
different, because it will have been uprated
.”

17.

The building
block will not be able to accommodate the rent
or council tax arrears
arising as a result of the Local Housing Allowance
, Council Tax

and the Housing benefit
caps so they
may have
to be paid by either the children’s amounts or the disability
amounts.

18.

Suggested Amendment B.

Clause 8 Calculation of awards

Insert (6)

The Secretary of State will commission independent research into the minimum incomes
needed for the healthy living by women of child bearing age both before they conceive and
while they are

pregnant and will annually update the results of that research.

Brief

19.

This amendment will be the first opportunity Peers have had to debate the cuts in
financial support for pregnant women in the

Health in Pregnancy Grant and Savings
Accounts Act 2010
.
It was

declared a money bill by the Speaker after it had completed
its passage through the House of Commons..

20.

The following letter was published by The Guardian on the 2
nd

July 2011.

The passion of the secretary of state for work and pensions (
Two babies, one
future
, 2 July) for early intervention to increase the chances of a disadvantaged
child moving out of

poverty

brings horses bolting and open stable doors to
mind. For too many

children

disadv
antage starts with a mother who cannot
afford a healthy diet and might not know enough about the food she needs to
give birth to a healthy baby. International research, headed by the

Institut
e of
Brain Chemistry and Human Nutrition
, has shown that poor
maternal

nutrition

leads to poor cognitive ability, developmental brain disorder
and a high
er risk of cerebral palsy.

The last government took the point and added the health in pregnancy grant,
the baby entitlement of the child tax credit, the toddler entitlement of the child
5


tax credit and the child trust fund, but it too should have started be
fore women
conceive by increasing their unemployment benefit of £53.45 a week.
The

present government abolished all these benefits
, so reducing the income
during pre
gnancy and the first year of a baby's life by £1,735, as calculated by
Family Action.

An unemployed woman aged 18
-
25, before and during pregnancy, has an
income of just £53.45 a week. This will be more vulnerable to rent arrears from
housing benefit caps,
still vulnerable to unregulated loan sharks, and is likely to
be overtaken by the escalating weekly cost of a healthy diet and domestic fuel,
with the annual uprating now pegged to the RPI. The public health white paper
only mentions food when abolishing t
he Food Standards Agency and never
mentions debt, another source of mental

illness.

Rev Paul Nicolson

Chair,

Zacchaeus 2000 Trust

21.

Donald Hirsch of the Centre for Research in Social Policy has calculated that sometime
within
the next ten years the increase in the weekly cost of a healthy diet will overtake the annual
increase in the unemployment income of the under 25s. He calculates that in 2020 the
weekly cost of a healthy diet will be £77 a week when the JSA for the
under 25s will be £74 a
week. The fuel costs will be £24 a week; the combined costs of food and fuel will be £101
when the JSA for over 25s will be £93 a week. (
An Unpublished Letter to the Z2K Trust
).

22.

Joseph Rowntree reported on the 5
th

July 2011

that
i
nf
lation raised minimum household
budget costs by around 5 per cent in the year to April 2011, slightly faster than main
Government inflation measure, the Consumer Prices Index (CPI). Over the past decade, the
cost of a ‘minimum’ basket of goods and services

has risen by 43 per cent, compared with 27
per cent for CPI.

23.

The Institute of Brain Chemistry and Human Nutrition has shown that fish, and oily fish in
particular, are essential in the diet of women before they conceive and while they are
pregnant to help prevent the development of poor cognitive ability and serious

brain
disorders,

such as cerebral palsy, in their babies, which are associated with poor maternal
nutrition and with consequent low birth weight.

24.

Marmot emphasised the need for attention to healthy diets both before and during
pregnancy and recommended t
he introduction of minimum income standards. Food and fuel
poverty severely impact on the children born of malnourished mothers.

25.

Sam Royston of Family Action has shown that an unemployed woman receiving £51.85 aged
18
-
25 and £65.45 a week aged 26
-
60 JSA/E
SA will l £1735 during pregnancy and in the first
year of a child’s life, because the government has cancelled her entitlements to the Health in
Pregnancy Grant, the Baby Entitlement of the Child Tax Credit, the Toddler Entitlement of
the Child Tax Credits

and the Child Trust fund. These cuts are unlikely to be offset by the
above inflation increases of the child element in the child tax credit. They are more likely to
be compounded by the housing benefit caps, the local housing allowance and the 10% cap
on

housing benefit after people have been unemployed and receiving JSA for one year, all of
6


which will increase debts. They will increase fuel and food poverty at a time when healthy
maternal nutrition and warmth during pregnancy are essential to the birth o
f healthy babies.

Departmental Ping
-
Pong.

26.

Lord Knight will remember that he passed my concerns about the health consequences for
the babies of women receiving the dire poverty income of adult unemployment benefits
before they conceive and while they are pregnant from the DWP to the Department of
H
ealth, who passed it to the Scientific Advisory Committee for Nutrition, who had never
considered anything to do with economics, and who were then abolished, with the Food
Standards Agency, by the coalition.

27.

This
crucial issue is treated to
“Ping
-
Pong”

be
tween the DWP and the Do
H
. We asked the
DoH a Freedom of Information question about the effect on the health of babies of the cuts.

They replied;

Thank you for your email of 19 August to the Department of Health about the Sure Start
Maternity Grant. I ha
ve been asked to reply. I regret this is not within the Department of
Health’s remit. After considering your email, I would recommend that you forward your
correspondence to colleagues in the Department for Work and Pensions where the staff
are better able

to answer your query. The contact details are
……..

28.

Steve Webb MP, now
a Minister
at the DWP told the Child Poverty Bill committee in
November 2009. ,

When we heard evidence

(from Z2K)
, it was pointed out that a young woman under 25
is allocated £50.95 a w
eek
[
Now £53.45

Z2K
]

to live on, but evidence suggests that
£43.00 (April 2008 then £44.34 April 2009 and then £45.65 April 2010) a week is
needed for food for a decent, healthy living standard. Fuel and other bills cannot be
paid from the remaining £7
-
od
d, so young women in that age group who are on benefit
are, by definition, eating less than is healthy for them. If they then become pregnant,
they will at that time have been eating unhealthily. Budget standards and minimum
income standards would enable u
s to consider what such young women need for a
decent standard of living, and to make that the benchmark. Fiscal considerations would
determine whether we hit the benchmark, but not knowing what the benchmark is
unacceptable and inexcusable." Hansard clmn
363 3 November 2009.

29.

Joseph Rowntree Foundation has reported that inflation raised minimum household budget
costs by around 5 per cent in the year from April 2010 to April 2011, slightly faster than main
Government inflation measure, the Consumer Prices In
dex (CPI); and that over the past
decade, the cost of a ‘minimum’ basket of goods and services has risen by 43 per cent,
compared with 27 per cent for CPI.

30.

Professor Michael Crawford, of the Institute of Brain Chemistry and Human Nutrition, has
written.

Fish and sea food are the principle sources of DHA ((
Docosahexaenoic acid)

in the food
chain and that the brain originated using it for structure, function and neural gene
control, some 500 million years ago. However, fish and sea food have other specialis
t
7


properties including the trace elements such as iodine and selenium both of which are
in short supply and getting shorter, in the land based food web. Deficiencies of DHA
and Iodine both restrict brain development and are likely to co
-
exist. 2 billion ar
e
considered to be at risk to iodine deficiency. So the evidence is not just about DHA.

The Japanese women who eat fish and or sea food every day gave birth to the children
who have grown up to have the best longevity, least heart disease, common cancers
a
nd major depression as well as a very low maternal and perinatal mortality and
prevalence of low birth weight compared to any other developed country.

Low birth weight associated with fetal growth restriction is the strongest predictor of
poor learning abi
lity, school performance, behavioural disorders and crime.

31.

Low birth weight in some wards of
London

reach 1
1
-
12
% of live births against an average
in
England
of 7.2% . A detailed analysis of low birth weight in Haringey is attached as Appendix
ii
i
, and the

OECD Appendix

i
v


I live in T
ottenham. Two Christmases ago

I came
home
to find it
trashed; money
and mobiles had been stolen. Police records show that
Haringey wards
were

second, third and fourth worst

of London’s burglary hot spots
; second was
Tottenham

Green at 21 cases per 1000 residents, third St Ann’s 20 cases and
fourth Haringay at 19 cases. The safest homes were in Barking and Dagenham at
1.68.


Another indicator of poverty is low birth weight; it reached 12.3% of live births in
Tottenham Green wa
rd between 2007 and 2009 and 11.62% in Haringay; and
9.24% in St Anns. The England average is an unacceptable 7.18% when compared
with the best six European nations that are all under 5%. Turkey has 11%. Low
birthweight, according to the Institute of Brain

Chemistry and Human Nutrition,
when associated with fetal growth restriction, is the strongest predictor of poor
learning ability, school performance, behavioural disorders and crime.

Rev Paul Nicolson; August 2011

32.

All the poverty of women of child beari
ng age and its con
s
equences for their offspring
are

exacerbated by current policies which create debt; and will be by further debt creating
policies in the Bill. Please see case history in
APPENDIX
v
.

33.

Suggested amendment C.

New Clause



Part 5
.

Means inquiry before
sanctions, penalties and recovery of overpayments

are

imposed.

1.

In respect of the imposition of an overpayment or a sanction under the Jobseeker's Act
1995 or any other provision or in the case of a penalty imposed under section 115C o
f
the Social Security Administration Act 1992 the Secretary of State or an authority shall
consider
-

a.

evidence of the physical condition of the claimant and his or her state of health;

b.

evidence of the psychological state of health of the claimant;

c.

evidence
relating to the means and income of the claimant;

8


d.

evidence relating to the accommodation occupied by the claimant and the effect
that the imposition of a sanction or penalty may have on the right to occupy such
accommodation;

e.

the family circumstances of th
e claimant and the impact that it may have on other
family members and dependants;

f.

evidence of the impact that a sanction or penalty may have on the ability of the
claimant to fulfil obligations to third parties including those relating to the
fulfilment o
f benefit entitlement conditions.

Before deciding whether to impose a sanction or penalty and shall only do so where,
having considered all the relevant circumstances, it is reasonable to do so.

2.

Regarding evidence as to means the secretary of state must
consider
-

a.

the income of the claimant;

b.

the capital of the claimant;

c.

the expenditure of the claimant.

3.

In order to facilitate the enquiry into the matters set out in subsection (1) the Secretary of
State or authority may
-

a.

arrange for a medical examination of
the claimant;

b.

obtain information from any agency holding relevant information on the income
and resources of the claimant:

c.

receive evidence from any other person or persons with a knowledge of the
circumstances of the claimant.

d.

A person who is subject to

a penalty may appeal to a Tribunal (Lower Tier) against
the imposition of such a penalty.

Brief

This amendment is supported by
;


AdviceUK

Caritas Social Action Network

Church Urban Fund

Community
Links

Derbyshire Unemployed Workers
Centres.

Housing Justice

Mind

Money Advice Trust


National Housing Federation,

The Royal College of Psychiatrists,

Save the Children

Shelter

United Kingdom Public Health
Association.

Vincentian Partnership



34.

The DWP will cut down on

expensive appeals
if they

ensure that overpayment, sanctions
and penalties are imposed by officials after taking into account all the relevant facts and
circumstances of the claimants. However d
iscus
sion in committee in the House of
Commons revealed that the
Minister for Employment
is content to rely on the
common
sense

of jobcentre and local authority officials

no matter that there are as many
interpretations of common sense as there are off
i
cials
.

9



a.

Chris Grayling, Hansard 13
th

June. “Arrangements are made so that the DEA
begins only after a period time, but only in exceptional circumstances would we
waiver repayment.

Common sense

lies at the heart of this measure. It is our job
to recover funds that
have been overpaid to a claimant when there is not a
good reason for waiving the repayment
.”

b.

Chris Grayling, Hansard 14
th

May. “The more we prescribe and write into
primary legislation and the more we say, “You have to take into account these
10 conditions

before you decide whether somebody should be sanctioned or
not,” the more likely we are to end up with a decision that flies in the face
of

common sense
.”

c.

Chris Grayling, Hansard 19
th

May, “

If we prescribe circumstances for a
discretionary write
-
off or
non
-
recovery of an overpayment, we will miss the fact
that every case is different and every circumstance is different. The degree of
error is also different in every case. We must have sufficient flexibility in the
system to apply discretion and

common se
nse


to individual cases.”

d.

Chris Grayling, Hansard 5
th

April. “
I think it is about the application of

common
sense
.

This is not about getting someone to apply for a new job every month.
Let us take the case of somebody with a disability who goes back into work for
12 hours a week, spends a year doing that work and is by then performing well
and has clearly settled back

into the working environment. That person has the
potential to do more, but that particular employer does not have the
opportunity for them to do more. At that point, it makes logical

sense

for them
to be given help and assistance to move on into somethin
g with longer hours.
That is how we envisage the system working.”

35.

The government also intends to rely on a Code of Practice. The Minister for Welfare
Reform wrote to Z2K on the 9 June 2011.

However, we recognise that we have a duty to balance the needs o
f individual
benefit recipients against those of the taxpayer. There will, therefore, be a
Code of Practice to ensure that people are treated fairly, but our responsibility
will remain to protect public funds and ensure, where possible, that money
that sho
uld not have been paid is recovered.

36.

The advice sector needs teeth when
appealing

decisions by offic
i
als
. Codes of practice do
not give any legal rights to claimants like those in regulations or on the face of the Bill.
They might be admissible as evidence

in judicial review but that is expensive and
unattainable for many claimants in the light of cuts in legal aid for civil cases. There is no
automatic right of appeal to the tribunal if officials misinterpret or ignore the code of
practice.




10



37.

Suggested am
endment
D

Clause 102.

Insert

71Z
1

Non
-

recoverable overpayments.

The Secretary of State may not recover any amount of any benefits paid in error by
officials when the claimants could not reasonably be expected to know they were being
overpaid.



Brief

38.

This amendment is supported by;

AdviceUK

Caritas Social Action Network

Church Urban Fund

Community Links

Derbyshire Unemployed Workers
Centres.

Housing Justice

Mind

Money Advice Trust



National

Housing Federation,

The Royal College of Psychiatrists,

Save the Children

Shelter

United Kingdom Public Health
Association.

Vincentian Partnership


S
ection 71 of the Social Security


Administration Act 1992

39.

Section 71 of the
Social Security Administration Act 1992 was designed to protect
individuals from the errors of the State. In essence, it protects citizens against negligence
by the Department of Work and Pensions


or local authorities when calculating benefits.
Th
is

prote
ction
is
abolished in the Bill.
The amendment covers all benefit payments

and
restores the protection.


40.

If a citizen lies or conceals facts from the Department, HMRC


or a local authority so that
an overpayment of benefit is made, then the Department can
recover the money through
the courts or by deductions. If however the Department, HMRC or Local Authority makes
an official error through its own negligence, then the citizen cannot, currently, be forced
through the courts to repay the money.



41.

The DWP
-

H
ousing Benefit/Council Tax Benefit Overpayments Guide 2006/7 reads;

Non
-
recoverable overpayments

These are official error overpayments, either LA or departmental, that occur
when the claimant could not reasonably be expected to realise that they were
being

overpaid. These cannot legally be recovered.

42.

That has been abolished in the Welfare Reform Bill; enforcement of official err
or
overpayments against blameless

claimants will be allowed


decisions relying far too much
on the discretion and common sense of
the same officials.
See
case history in
APPENDIX

v


11



The consequences of reversing the rule.

43.

This amendment does not make any government a soft touch because the burden of
proof is shared between the government agency and the claimant. The agency has to
check that an error has been made and the claimant has to prove he/she could not have
known abo
ut it. Government agencies very rarely volunteer the information that a
blameless error cannot legally be enforced; mostly claimants do not know until alerted by
an authority or told by an adviser.



44.

Reversing this rule


which was introduced in 1975, endo
rsed by John Major’s government
in 1992 and again in 2006/7 guidance of the DWP




would also take us into a legal
minefield. Effectively claimants would be expected to pay for the negligence of the state.

45.

In such a case the citizen might launch a counter

claim, seeking recovery or set off of all the
money s/he has paid in national insurance contributions over the years and for damages
for stress and inconvenience.


The welfare state has been paid for by national insurance
and taxes paid by citizens, and a
ggrieved claimants might seek redress through the courts.
All the unemployed are taxpayers; many will have paid stamp, income and council tax
before becoming unemployed.

46.

Why should the claimant be expected to pay for the error by a DWP or local council
co
mputer? In cases such as housing benefit, the mistake may also have arisen from a
mistake by the landlord, a bank, the local authority itself or another party supplying
information.

47.

In the case of housing benefit it would open up claims by LAs against lan
dlords, particularly
those who have HB money paid direct to them, since the changes in the HB system in April
2009. This is because landlords are the ultimate recipients of the welfare money deriving
the benefit. It might also result in third party proceed
ings being brought against individual
officers or their superiors who were responsible for the official error


they could be sued
directly for negligence.

48.

In 1980s the Department sought to recoup social security benefits paid to people who were
injured as

a result of accidents when the claimant obtained damages. Not only did this
generate a great amount of ill
-
will when the state seized sums of compensation, but
lawyers got round it and ultimately insurance payments went up for everyone until the
practice
was abolished.

49.

Clause

102

71ZD

(3)

(e)

Deduction

from

earnings

-

currently

reads.


(1)Regulations

may

provide

for

amounts

recoverable

under

section

71ZB


to

be

recovered

by

deductions

from

earnings.

(2)In

this

section

“earnings”

has

such

meaning

as

may

be

prescribed.

(3)Regulations

under

subsection

(1)

may

include

provision


(e)as

to

a

level

of

earnings

below

which

earnings

must

not

be


reduced;

50.

The problems with (e) are that
;

12



a.

I
t protects vulnerable and impoverished claimants from excessive enforcement of
overpayments but not any other debt. So rent or council tax arrears, can swallow
up the protected amount of earnings.

b.

so provision needs to be extended to all debts as is the p
ractice in Scotland and
several European countries.

c.

there is no attempt to measure
protected level of earnings
, in the light of the
weekly cost of essentials in the market
.

d.

It does not cover unemployment benefits.

e.

t
he government does not have to write an
y regulations protecting a minimum
amount of income.

So we propose the following amendment
s
;

51.

Suggested amendment
E



Clause

102

71ZD

(1)

delete

“earnings”

insert

“incomes”.


Delete

Clause

102

71ZD

(3)

(e)

Insert (e) Regulations under subsection (1) shall
include provision

i.

as

to

a

level

of

earnings

below

which

income

must

not

be

reduced;

ii.

requiring the Secretary of State to take into account research into the minimum
incomes required for healthy living when deciding the level of earnings in (i).

iii.

protecting t
he reduction of the level of earnings in(i) by any other debt.


Brief.

52.

This brief has been prepared with the help of Professors John Veit
-
Wilson and Elaine
Kemson, and Damon Gibbons of Debt on our Door
-
Step.

The Government produced

Clause

102

71ZD

(3)

(e)


at the report stage in the House of
Commons
. It

echoes the practice in Sweden, Germany, the Netherlands, Norway and other
nations where there are legally enforceable attachment free limits when all debts are being
enforced;


the l
evel of the limits is related to national minimum income standards set by a
variety of methods.
It also
reflects the Scottish Protected Minimum Balance

(PMB)
.
The
PMB applies to arrestment executed against a debtor's account in a bank or other financial
i
nstitution, and protects a set amount of funds from being arrested.
The
lower monthly
threshold to
was raised to
£415

in April 2010.
.

53.

T
he principle of irreducible attachment free minimums
should be
extended to all debts, to
the unemployed, in particular s
afeguarding


children’s, disability and housing benefit. It
prevents the damage done to mental and physical health by the enforcement of debts
against poverty incomes and the damage to the capacity of the poorest adults to find and
keep work.

54.

In Sweden th
e standards for a

reasonable level of living are up
-
rated for price index
changes every year and reset every five years

by the National Board for Consumer Affairs.
They are based on survey data on national household consumption patterns and current
prices.

This means that the statisticians and the NBCA policy officials

are deciding what is
reasonable in terms of deviations from the averages


for example for the past four years
13



in the UK the prices of food and domestic fuel have increased faster than the bo
th the RPI
and the CPI.

55.

T
hese standards are

used by the social service board for setting benefits and by the tax
authority for setting

the tax threshold. The tax threshold is also used by the court
enforcement authority to set its attachment
-
free sum for d
ebt enforcement. The sum
consists of two parts
-

variable housing costs and a fixed standard 'normal' sum for all other
living expenses.

56.

The actual cash sums are of course no use without purchasing power parity conversions,
but at a rough current conversio
n factor of 10 kronor to the £1 the weekly sums shown are
about £100 for a single adult and £170 for a couple
.


The main point is that the total sums
of standard

allowance and
rent are irreducible.

57.

The German attachment
-
free limits derive at heart from the constitution’s statement of
the human right to dignity and the social code’s statement that this means a right to a
dignified level of living. It is set, very roughly speaking, by the national stat
istical bureau
using comparison with the actual expenditure patterns of the lowest quintile of income
recipients who are not receiving social assistance. They are assumed to possess and be
ascribed with human dignity.


The risk in the German system is that

poverty is defined as
the level of living of poor people. But the main point is that these attachment free limits
have can be enforced by the courts and they relate to national income standards.

58.

In the Netherlands there is an attachment free amount which

comprises
90% of the social
minimum, plus subsidies for rent and health insurance premium plus a nominal amount.
The nominal amount is decided by the courts if the parties cannot reach agreement. The
commission made rules for this part, so everybody is tr
eated equally. The national social
minimum is 1300 euro per month for a couple, 90% for lone parents and 70% for singles.

59.

So there we have three nations with irreducible attachment free limits, enforceable by the
courts and related to national minimum inc
ome standards.

In setting payment plans,
courts ensure that the debtor is left with a minimum level of income, taking account of
family size. This is often at the level of social assistance, although Norway is notable for
having a much higher guaranteed i
ncome. This is set at 85% of the level of the minimum
pension. This is considerably higher than social assistance levels.


In contrast, in the
Netherlands, the minimum guaranteed income is just 90% of social assistance, although
this does need to be set ag
ainst a shorter payment period.

Rev Paul Nicolson. Chair.

Zacchaeus 2000 Trust

34 Grosvenor Square,

London SW1W 0DH

Office; 02072590801

Home; 02083765455

Mobile; 07961177889

e
-
mail;
paulnicolson@z2k.org


14



A TALE

OF TWO ENFORCEMENTS

(names changed)

1. NO SUPPORT

Local Government Ombudsman reports the case of Mr “Watson”, a single, semi literate adult living alone in
Southwark. Jobcentre Plus mistakenly cancelled his JSA so Southwark cancelled his housing and
council tax
benefits creating arrears in both accounts. On the 12
th

January 2001 CSL, Southwark’s out sourced agent
collecting council tax, sends Mr. Watson a summons for unpaid council tax of £235.10, plus costs, for a
hearing on 9
th

February 2001. The s
ummons contains the following threats, in bold type and highlighted.
Thousands are dispatched daily:

“If a liability order is granted the council will be able to take one or more of the following actions:
Instruct bailiffs to take your goods to settle you
r debt
-

this can include your car. You will be liable
to pay the bailiffs costs which could substantially increase the debt. Instruct your employer to
deduct payments from your salary or wages. Deduct money straight from your jobseekers
allowance or inco
me support. Make you bankrupt. Make a charging order against your home. Have
you committed to prison”.


His sister
-
in
-
law calls on him. His body is hanging in his flat. The police found the summons with him,
paper littered with rough calculations and a n
ote:

“Dear ….

I at to do this I am in so much in Detr good By for ever Love……”

Threats of eviction for rent arrears were not far off. JSA was £53.05 a week after rent and council tax. (Now
£64.30). The Joseph Rowntree Foundation minimum income standard f
or healthy living, after rent an
council tax, is £144 a week for a single adult.


2. McKENZIE FRIEND SUPPORT.

We work with ATD Fourth World who are close to the poorest people in London
. They asked for our help
with “Sarah” a 51 year old who is single, unemployed, semi literate and in debt to Lambeth Council. Her
Doctor tells us
“she has learning difficulties and is illiterate and for many years has had chronic anxiety with
episodes of p
anic. Were the Bailiffs to proceed with the seizure of her goods, the effect would be
catastrophic for her and would seriously compromise her health”.

She receives £53.05 a week income. She pays each week a £4.13 a week water rate, £2.50 rent
arrears £36.
42 to buy every thing but rent and council tax. Capita Business Services in Bromley
collect council tax for the Council.. She owes £468 from a failed attempt at low paid work. The
failure caused the debt. Equita Bailiffs in Northampton whose computers, bl
ind to her ill health,
illiteracy and poverty, threaten “
We have arranged for our bailiff to call at your home this
weekend to seize your goods and transport them to the auction rooms for sale”,
and two days later

NOTICE PRIOR TO COMMITTAL TO PRISON PROC
EEDINGS”.
We tell Lambeth Council who call off
the bailiffs. The computer still runs. Another threat to sell the furniture storms its way from
Northampton to Lambeth. To relieve her anxiety Zacchaeus promises to pay the £468 council tax
arrears should the
magistrates be minded to imprison her rather than write off the debt. We also
promise to go to court with her. Lambeth backed off.





15



NGOs supporting the Zacchaeus 2000
Petition calling for Minimum Income
Standards

To
tal 71


10
th

May 2010



Local organisations

Catholic Children's' Society
-
Shrewsbury

Church Action on Homelessness in
London


UNLEASH

Communities Against Poverty


Liverpool

Ilfracombe Credit Union

Liverpool

Archdiocese Justice and Peace
Commission

St Albans Diocesan Synod

Partners in Health


Dudley

East London Communities Organisation



National organizations

ATD Fourth World

Access to Justice

Afghan Association of Great Britain

Campaign Women

Debt on our Doorstep

European Anti Poverty Network

Labour Land Campaign

Lobby to end Age Discrimination


LEAD

Low Pay Unit

National Consumer Council

New Policy Institute

Refugee Council

Scottish Low Pay Unit

TUC Unemployed Workers Combine

Women In Prison Trust



Pensioners' Charities

Age Concern

Help the Aged

National Pensioners' Convention



Parents' and Children's Charities

Barnardos

Buttle Trust

Child Poverty Action Group

Children's Society

National Council for One Parent
Families

Maternity Alliance

NSPCC

NCH action for children

Parenting Education and Support Forum

Save the Children Fund

Single Parent Action Network

End Child Poverty

APPENDIX ii



Health

British Medical Association

Centre for Food Policy

Faculty of Public Health
-

Royal College of
Physicians

Food Commission

Food Justice

Food Poverty Project

Fuel Poverty Project

Institute of Brain Chemistry

and Human Nutrition

Mencap

Mental Health Foundation

Milk for Schools

Mother an Child Foundation

National Heart Forum

Royal College of Nursing

Socialist Health Association

UK Health for All Network

UK Public Health Association



Trades Unions

Trades Union Congress

UNISON
-

(conference decision)



Faith

Catholic Agency for Social Concern



Caritas

Catholic Bishops' Conference
-

Social
Welfare Committee


(wound up in February 2002)

Catholic Child Welfare Council

Church Action on Poverty

Church of England
-

General Synod
-

(Motion won 339
-

0)

Church of Scotland
-

General
Assembly
-
(Unanimous decision)

Conference of Religious in England and
Wales
-

Social Justice Desk

Christian Council for Monetary Justice.

Methodist Conference (unanimous
decision)

Muslim Council of Great Britain

Iona Community

Von Hugel Institute

Vincentian Millennium Partnership

16




17




18




19