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CCH Conference Workshop

CCH Conference Workshop. 14 July 2012 Welfare Reform Phil Earl and John McGuigan. Introduction. Welcome Introductions Objectives To increase your understanding of the Government’s welfare reforms To evaluate the potential impact on your organisation

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CCH Conference Workshop

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  1. CCH Conference Workshop 14 July 2012 Welfare Reform Phil Earl and John McGuigan

  2. Introduction • Welcome • Introductions • Objectives • To increase your understanding of the Government’s welfare reforms • To evaluate the potential impact on your organisation • To consider how you can respond to the planned changes

  3. Background • Context • World economic crisis • Coalition government and deficit reduction • Cuts in public expenditure • £18bn cut in welfare budget • Further cuts on the way! • Government Objectives • Create incentives to get more people into work by ensuring that work always pays • Protect the most vulnerable in society • Deliver fairness to those claiming benefit and to the taxpayer • Welfare Reform Act 2012

  4. Housing and the Welfare Reform Act • Under-occupation • Household benefits caps • Universal Credit

  5. Under-occupation • Housing Benefit (Amendment) Regulations 2012 • From April 2013 • Working age tenants who are under-occupying social housing will have Housing Benefit cut • 14% for one spare bedroom • 25% for two or more spare bedrooms • Same-sex children under 16 to share • Different-sex children under 10 to share • No definition of what constitutes a bedroom • Excluded tenancies

  6. Under-occupation: who is affected? • In receipt of Housing Benefit • Working age • Below the qualifying age for Pension Credit • Expected to be 61 at April 2013 • To rise until women’s state pension age = men’s in 2018 • For couples, under-occupation penalty will not apply if either or both have attained qualifying age • Disabled tenants • Penalty will apply except where an additional bedroom is required for a non-resident carer providing overnight care (but see recent Court of Appeal case)

  7. Under-occupation: what can tenants do? • Pay the difference • Move to a smaller home • Apply for discretionary housing payments • Take in a lodger • Earn more money!

  8. Household Benefit Caps • From April 2013 • Total benefit will be limited to around £500 per week for couple/lone parent households and around £350 per week for single person households • Cap implemented by adjusting Housing Benefit • The policy will most affect large families who are out of work (in the most part with three or more children) and households in high rent areas receiving large Housing Benefit payments • Likely to affect around 50,000 UK households in 2013/14 • DWP notifying claimants now

  9. Universal Credit • Phasing in between October 2013 and October 2017 • Does not apply to pensioners • Replaces • Working Tax Credit • Child Tax Credit • Housing Benefit • Income Support • Income-based JSA • Income-related ESA • DLA will be replaced by Personal Independence Payments • Housing element within Pension Credit

  10. Universal Credit • Administered by DWP • Online applications • 50% in 2013 • 80% by 2017 • Single monthly payment in arrears • Includes housing element • Vulnerable tenants • Demonstration projects

  11. Universal Credit: issues for landlords • Increased rent arrears and bad debts • Increased costs of rent collection • More legal action • Higher tenancy turnover • Increased void rent loss and void costs • Advice and support for tenants

  12. What Can You Do? • Impact assessment • Communication with tenant members • Allocations • Mutual exchanges • Rent arrears • Payment methods

  13. Impact Assessment • Update tenancy records and household details • Assess the potential impact of under-occupancy and direct payment of benefits • Analyse the results and present to committee/membership • Identify tenants who may need advice and support

  14. Communication with Tenant Members • Target tenant members who may need advice and support • Consider opportunities to inform tenant members of the changes • Send out information to raise awareness • Let people know where they can get help

  15. Allocations • Assess current allocation policies • Consider policy on lodgers • Start raising awareness at home visit stage regarding under-occupation rules • Reiterate under-occupation at sign up due to possible changes of financial circumstances • Re-designation of properties • Encourage existing tenants to downsize through internal transfer or mutual exchange • Co-operation between co-operatives

  16. Mutual Exchanges • Home & Communities – Regulatory Framework for Social Landlords, Section 1.2 of the Tenancy Standard states: “registered providers shall enable their tenants to gain access to opportunities to exchange their tenancy with that of another tenant by way of internet-based mutual exchange services”

  17. Rent Arrears • Review current rent arrears policies • Review amount of bad debt provision • Consider collection v writing off arrears • Consistent approach to arrears pursuance

  18. Payment Methods • Assess current methods • Consider whether the current service allows members to cope with the challenges ahead • Offer wider choice of payment methods • Direct debit • Credit unions

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