Introduction
2. The Northern Ireland (Welfare Reform) Act 2015 is a piece of enabling legislation to allow for the delivery of welfare reform in Northern Ireland. Welfare is a devolved matter for Northern Ireland. The intention of the Act was to allow the delivery of the Government’s welfare reforms in Northern Ireland, including those made in the Welfare Reform Act 2012 and those proposed in the Welfare Reform and Work Bill 2015, as well as the welfare-related flexibilities included in the Stormont House Agreement (SHA). The SHA was reached on 23 December 2014 following 11 weeks of talks between the UK Government, the five largest parties in the Northern Ireland Assembly, and the Irish Government on matters for which they have responsibility, in accordance with the three-stranded approach confirmed in the 1998 Belfast Agreement. Legislating at Westminster allowed for the most rapid means to deliver welfare reform in Northern Ireland.
3. The SHA committed the Northern Ireland parties to passing a Welfare Reform Bill that would implement the Welfare Reform Act 2012 alongside a series of ‘top-up’ measures. However, when it was debated in the Assembly in May 2015, the Assembly Bill did not gain the necessary cross-community support and failed to pass. After further cross-party talks, it was agreed on 17 November 2015 that the Government would legislate for welfare reform in Northern Ireland.
4. The intention of the legislation was to implement measures in the SHA to help place Northern Ireland’s finances on a more sustainable footing, and in so doing help ensure the continued viability of Northern Ireland’s devolved administration. In enabling the Government to legislate for welfare reform in Northern Ireland, the legislation was aimed at playing a crucial role in addressing the Northern Ireland Executive's financial difficulties. The policy objective of the Act is to implement the SHA by extending the Welfare Reform Act 2012 to Northern Ireland. There is a long standing 'parity' principle that the UK Government will only fund welfare in Northern Ireland up to the same levels as apply in Great Britain. Without welfare reform, welfare payments in Northern Ireland will continue to exceed those paid in Great Britain. The excess over parity levels was being deducted from the Northern Ireland block grant which was adding to the pressure on the budget of the devolved Executive. Following the agreement on 17 November 2015, the UK Government obtained the Northern Ireland Assembly's consent to pass legislation to implement welfare reform in Northern Ireland.
5. The Act itself does not implement welfare reform but allows for an Order in Council to be made. It is intended that the first Order in Council will replicate much of the Northern Ireland Assembly Welfare Reform Bill referred to above. It is intended that the Order will contain regulation-making powers and measures to implement welfare reform in Northern Ireland. These measures include: the reforms made in Great Britain by the Welfare Reform Act 2012; various flexibilities as agreed between the Department for Work and Pensions and the NI Department for Social Development, and the amendments agreed by the parties during the passage of the Assembly’s Bill; and provisions that allow for the Executive-funded additional measures to be introduced.