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Stormont deadlock shelves £35m a year 'working poverty' benefits scheme

A key benefits scheme has not been implemented because of Stormont's collapse. Picture by Mal McCann
Brendan Hughes

A BENEFITS scheme in Northern Ireland worth an annual £35 million and aimed at tackling 'working poverty' has not been implemented because of Stormont's collapse.

The Cost of Work Allowance (CoWA) was due to provide low-paid families with up to £690 a year to help mitigate against Westminster welfare cuts.

The benefits package was proposed in the Stormont executive's 2016 programme for government consultations and was supposed to run through to March 2020.

But the scheme was never implemented – and cannot progress without ministerial approval, a chief Stormont civil servant has confirmed.

The £35m that was to be used in 2017/18 for the scheme has been handed back to Stormont's finance department.

The issue was confirmed by the Department for Communities (DfC) in a letter to SDLP deputy leader Nichola Mallon.

DfC permanent secretary Leo O'Reilly said the CoWA comprised an estimated annual payment of £690 for households with children and £340 for households without children, but noted an issue over payments being treated as taxable income.

"While we will continue to explore alternative options for the development of a CoWA scheme, these will need to be considered and approved by incoming ministers before they could be implemented," he added.

Northern Ireland has not had a power-sharing government since the DUP and Sinn Féin-led executive fell apart over a year ago, leaving civil servants to run Stormont departments.

The parties insist they want to restore devolution, but disagree over issues including same-sex marriage and an Irish language act.

Ms Mallon, a North Belfast MLA, urged the larger parties to "sort their differences" and get Stormont up and running again.

"The Cost of Work Allowance scheme allows people to earn money before their Universal Credit payment is hit," she said.

"By the Department for Communities' own figures, this works out as an annual payment of £690 for households with children and £340 for those without children.

"However, as a direct result of the political fall-out between the DUP and Sinn Féin, individuals and families here can't avail of this allowance worth £35m a year because there is no minister in place to sign it off. It's a disgrace.

"Rather than putting all of their energy into blaming each other for the political shambles we're in, the DUP and Sinn Féin should sit down, sort their differences over an Irish Language Act and put the needs of these families, and the needs of people right across the north first."

DfC said it is "committed to implementing the measures to mitigate the impacts of welfare reform as agreed by ministers in the previous executive".

"Unlike other measures developed as direct mitigation for those directly affected financially by welfare reform, the Cost of Work Allowance scheme was intended to provide additional income to assist people in working poverty," it said.

"Payments from the scheme would be available to people claiming either working tax credit or universal credit and who satisfy eligibility criteria."

A spokeswoman said DfC has been considering options for an alternative CoWA scheme after HM Revenue and Customs confirmed the payments would be treated as taxable income, and would therefore impact on the net benefit claimants would receive.

"It will be for an incoming minister to decide on the implementation of an alternative Cost of Work Allowance scheme," she added.

"The £35 million allocated for the scheme for 2017/18 was returned to the Department of Finance for allocation to other public services in Northern Ireland."

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