THE SOCIAL FUND—CASH‐LIMITING SOCIAL SECURITY

Publication Date01 Jan 1989
AuthorTom Mullen
DOIhttp://doi.org/10.1111/j.1468-2230.1989.tb02596.x
LEGISLATION
THE SOCIAL FUND-CASH-LIMITING SOCIAL SECURITY
THE
introduction
of
the social fund has been one of the more
controversial aspects
of
the Government’s recent reforms to the
social security system. As well as enjoying considerable media
attention, this new departure in welfare benefit policy has stimulated
the interest of academics and a considerable amount of research
into the operation of the fund
is
already planned. Inevitably it will
be some time before the results and conclusions of such research
are available. Nevertheless, it seems appropriate to attempt now a
preliminary assessment of the significance of the social .fund. My
assessment will cover the developments in welfare benefit policy.
which have led to the introduction of the social fund, the needs
which the fund is intended to meet, the legal and policy structure
within which the fund will operate, and the arrangements for
review
of
decisions made by officials administering the fund.
I
will
also be attempting to relate the introduction
of
the fund to the
perennial debate about the proper role
of
discretion in delivering
welfare benefits.
Before describing the developments in policy which led to the
fund it may be helpful to give an outline of the social fund. The
social fund is part
of
the new scheme
of
means tested welfare
benefits introduced with effect from April
1988,’
in which income
support and family credit have replaced supplementary benefit and
family income supplement, although eligibility for social fund
payments is not entirely confined to those receiving such benefits.
Welfare benefit claimants’ general needs are met from weekly
benefit augmented for some by special premiums. The social fund
is “a scheme to help people with needs arising from exceptional
expenses which are difficult to meet from regular income.”* Six
different types
of
payment are made out
of
the fund:
(1)
payments
for maternity expenses
(2)
payments for funeral expenses
(3)
payments for cold weather heating expenses
(4)
budgeting loans
(5)
crisis loans and
(6)
community care grants (C.C.G.s).
Payments in the first three categories are made
as
of right in
circumstances defined by regulations, with a right of appeal to a
Social Security Appeal Tribunal (S.S.A.T.). There is, therefore, no
great change
of
policy with regard to such payments, and this
paper is accordingly not concerned with those aspects of the social
fund. Rather it is concerned with the other types
of
payments-
budgeting loans, crisis loans, and community care grants. This
See Social Security Act 1986, Parts
II,
Ill,
VI
and
VII.
The principal regulations are
the Income Support (Gencral) Regulations 1987,
S.I.
1987
No.
1967 and the Family
Credit (General) Regulations 1987,
S.I.
1987
No.
1973.
Social
Fund
Manual.
para. 1OOO.
64
JAN.
19891
THE
SOCIAL
FUND-CASH-LIMITING SOCIAL
SECURITY
65
group
of
payments are discretionary; are made subject
to
budget
constraints, and are challengeable only by way of a new review
process rather than appeal to a S.S.A.T. These payments have
been substituted for the single payments and urgent cases provision
made under the supplementary benefit scheme before April 1988.
HISTORICAL DEVELOPMENT
OF
SPECIAL NEEDS PAYMENTS
THE
changes in policy involved
in
the social fund must be
understood in their historical context. The territory which I am
about to cover is fairly familiar and those with a prior interest in
welfare benefits, may feel inclined to skip to the next part of the
paper. In modern times, the social assistance scheme has always
permitted payments to be made in addition to the normal weekly
rate
of
benefit in certain circumstances to meet special needs
of
claimants which cannot be met out of weekly benefit. Under the
national assistance scheme set up
in
1948
weekly
benefit could be
increased in certain circumstances, and lump sum payments could
be made to meet exceptional needs. Such additions and payments
continued to be made after national assistance was replaced by
supplementary benefit in 1966. Additions to weekly benefit were
known as exceptional circumstances additions (E.C.A.s). Lump
sum payments were known as exceptional needs payments
(E.N.P.s). Both types of payment were discretionary in the sense
that claimants had no legal right to such payments, as they had to
weekly benefit under the Ministry of Social Security Act 1966.3 A
legal right
to
these payments was not conferred because it was
thought that an element of discretion should remain in the social
security system
in
order to cope with the variety of claimants’
special needs. Section 7
of
the 1966 Act permitted the Supplementary
Benefits Commission (S.B.C.) where it appeared to them to be
reasonable to “determine that benefit shall be paid to a person by
way of a single payment to meet an exceptional need.” Additions
to weekly benefit could be made “where there [were] exceptional
circurn~tances.”~ Finally, there was an overriding discretion to pay
benefit “in an urgent case” which could be used to make payments
to persons not otherwise receiving Supplementary Benefit.s These
provisions were replicated with some drafting changes in the
Supplementary Benefits Act 1976.
The discretion conferred by the 1966 and 1976 Acts was
structured by unpublished guidance and instructions issued to
officials by the S.B.C.-the A and AX codes. Although the codes
were secret, some information about S.B.C. policy was published
in the
Supplementary Benefits
Handbook.
E.C.A.s were typically
made for special diets, extra heating costs and laundry costs for
Renamed the Supplementary Benefit Act
1966
by the Social Security Act
1973,
Sched.
2,
para.
4.
s.99(18).
s.13.

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