Learn with us. Improve with us. Influence with us | Welfare Reform Sam Lister, Policy & Practice Officer, CIH

Learn with us. Improve with us. Influence with us | www.cih.org

Welfare ReformSam Lister, Policy & Practice Officer, CIH

Learn with us. Improve with us. Influence with us | www.cih.org 2

• The bedroom tax (April 2013)• Household benefits cap (April 2013)• Universal Credit – working age tenants

payment to tenant along with other out of work elements (October 2013)

• Pension Credit (October 2014)• Review of support charges and exempt

accommodation (post UC?)

Timetable


Budget Red Book & Spending Review Policy Costings 2014/15* (£ million)• Social sector size limits

490

• Non dependent deductions 340• Household benefits cap 270

• Local housing allowance (PRS) 1645

• Other housing cost support (SMI) 130

• Discretionary housing payments -40

• Additional room for carers -15

• Total annual saving (steady state) 2820• Other welfare benefits 7500

Housing support welfare cuts


HB

Tax Credits

HB

ESA

JSA

IS

PC

Universal Credit

PensionCredit

Welfare benefits: old & new


• Rent shortfalls from housing costs cuts• Shrinking pocket from which to make up loss• Changes in the way benefits are paid without

support to manage money• Vulnerability support is temporary

• Landlords: rising costs and lower collection rates• Available options for housing homeless and

vulnerable shrinking (PRS & temporary housing)• Increased housing stress and rising demand• Cuts to advice services (CLS)

Summary


Private rented sector


• Changes already made• 51,920 claimants (88%) losing average £8.00

per week as result of move to 30th percentile • 3,490 affected by shared accommodation rate

lose an average of £24 per week (about 15% of 1 bed caseload)

• 310 lose as a result of the 4 bedroom limit around £40 per week

• Overall benefits cap on top from April 2013

Private rented sector


LHA limits Leicestershire 2012Property type Low High

Shared £55.00 £68.00

One bedroom £72.69 £91.15

Two bedrooms £96.92 £114.23

Three bedrooms £109.62 £130.38

Four bedrooms £150.00 £183.46


Temporary housing


• Existing HB rules continue Subsidy limit based on 90% of January 2011 LHA rate

for the property (not household size) HB award subject to household cap

• Under universal credit Housing costs element based on appropriate LHA rate

for family size paid part of claimants UC award Management element (£60) will be separated out and

paid direct to the authority

Temporary housing


Supported housing


• Supported housing that is ‘exempt accommodation’ will be ‘outside’ universal credit

• Any accommodation where ‘care, support or supervision is provided Funding stream irrelevant Individual rather than property based test

• Temporary measure?

Supported housing


• Unclear what ‘outside UC’ means Retain other out of work benefits? Housing costs only? All of the rent or just the additional cost?

• Costs will become increasingly transparent Don’t hasten further reform

• Localised system? – may be better to be inside UC Social security is demand led Partial – similar to temporary housing?

What does this mean?


Eligible housing costs: the law• Rent is eligible - ordinary landlord overheads (insurance,

maintenance, voids) • Not eligible: ‘general counselling or any other support

services’ (any kind of advice and support that helps the tenant maintain their tenancy)

• Eligible: services which tend to preserve the ‘fabric of the dwelling’ provided they are not in respect of services that are ineligible

• If it is support – it does not somehow become eligible if it is re-classified as ‘intensive housing management’


Eligible• Assistance for tenants in

arranging for plumbers• Assistance for tenants in

ensuring security of dwelling (e.g. reminding them lock up)

• Controlling access and other concierge type services

• Minor repairs (e.g. changing light bulbs, unblocking sinks)

Ineligible• Assistance with

budgeting /debt counselling• Assistance claiming benefits• Resettlement activities

teaching life-skills• Liaison with relatives• Dealing with neighbour

disputes (ASB services generally)

• Reminding tenant to take medication

Eligible and ineligible


April 2013 changes


• Social sector size criteria• Household benefits cap (all tenures)

April 2013


• Deductions for under-occupation 1 bedroom (14% of eligible rent) 2 or more bedrooms (25% of eligible rent)

• Exempt State pension credit age (61 by 5 October 2012) Shared ownership Those in sheltered or supported housing who receive

support services provided by the landlord (exempt accommodation)

• Grace periods 13 weeks previously afford the rent (no claim in last year) 52 weeks if recently bereaved

Social sector size criteria


• One room for tenant and partner • One room for each other person aged 16+• A child aged 15 or under will be expected to share with

one other child aged 15 or under of the same gender• A child aged 9 or share with one other child aged 9 or

under regardless of gender• One room for any one else (i.e. unpaired)• One room if the tenant and/or partner needs an

overnight carer (maybe minor modification to include disabled children)

• No definition of what constitutes a bedroom (large or small)

Calculating size


• Parents with shared access (child benefit wins)• Foster parents (foster children do not count)• Couples using additional bedroom whilst recovering

from illness• Disabled and adapted properties• Unable to move – or move delayed whilst waiting for

property to become available

So it affects…


Household cap

Single Couple Couple + 1 Couple + 2 Couple + 3 Couple + 40.00

100.00

200.00

300.00

400.00

500.00

600.00

71111.45 111.45 111.45 111.45 111.45

279.00

388.55

306.21

241.22

176.23

111.24

20.30 33.70 47.10 60.5062.04

113.63

165.22

216.81

JSA Child Benefit Child Credits Maximum Housing Costs

£ p

er w

eek


• Pension age• Working tax credit• Disability living allowance (or PIP)• Support component of ESA • Industrial injuries disablement benefit • 39 weeks grace if lose job and had been

work for 50 of the previous 52 weeks

Exemptions


• Couples Three child families where rent is £160 or more Four child families where rent is £100 or more Five+ child families rent is £46 or more

• Lone parents Four child families where rent is £152 or more Five child families where rent is £87 or more

Who does it affect?


DWP targetsLocal authority DWP letters

Blaby 20Charnwood 40Harborough 20Hinckley and Bosworth 30Leicester 440Melton 10North West Leicestershire 30Oadby and Wigston 10


Universal credit


• Combined assessment award and payment (housing costs) Surrogate wage

• Better off in work• Individual responsibility

To make a claim and report changes Presumption of payment to claimant

• Automated system On-line claims or national call centre Loss of local one to one advice

Key features


80 110

140

170

200

230

260

290

320

350

380

410

440

470

500

530

560

590

620

650

680

£350£370£390£410£430£450£470£490£510£530£550

Mar-10 Oct-13 Couple, two children, rent £80, council tax £25

Total income with council tax


• DWP taking on 4.8 million housing costs cases 2.0 million in-work claims

• Total UC caseload around 8.0 million• Total PC caseload round 2.1 million

Scale of change


• Claim on-line or to call centre• Payment calendar monthly in arrears to claimant

Bank account Budgeting advice and/or subsidised banking product

• Payment exceptions will be broadly based on the LHA payment rules with some modifications (probably broader)

• Assumption will be that payment exceptions are a temporary position

Claims and payment


• Increase in demand • Shrinking supply – Community Legal Service funding

for welfare benefits advice withdrawn from April 2013

Advice: supply and demand


Summary and conclusions


Tenants• rent shortfalls to be paid for….• from shrinking benefits…• paid in arrears….• without assistance and advice to help budget

Landlords• work harder to collect…• a reduced income…..• with increased costs

Conclusions


Local authorities• Rising demand for services (advice, support,

housing) • Reduced housing options (private rented sector) • Reduced direct and indirect funding to

authorities and partner agencies (e.g. CLS)

Conclusions


CIH Welfare Reform ServicePractical expertise on policy and best practice to help housing organisations cope with upcoming welfare reforms. Services include:• income health checks and service reviews; • in-house training on welfare reform and

the impacts; • facilitation of strategic partnerships with

commercial and charitable organisations; • and providing executive and team

briefings on the subject of welfare reform.

[email protected] www.cih.org/welfarereform

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Learn with us. Improve with us. Influence with us | Welfare Reform Sam Lister, Policy & Practice Officer, CIH