Welcome to the Landlord Forum

Changes to come in relation to Benefits

Chandra ThakrarRevenues & Benefits Team LeaderLeicester City Council

Welfare Reform• Save £20 billion on welfare benefits bill• Simplify the benefits system• Make work pay – better incentives • Streamline in/out of work support• Develop ‘claimant commitment’• Increase conditionality and sanctions• Aimed at ‘working age’ claimants • Better use of technology to reduce e

This Year so far…. April 11 – Non dependent deductions no longer

frozen but are uprated on annual basis.

April 11 – LHA restricted to four bedroom rate.

Jan 12 - Under 35 in private rented accommodation – Restriction to Shared Accommodation Rate (SAR)

April 12 - LHA rates “Frozen” will not increase until April 2013 & then by CPI.

Shared Accommodation Rate (SAR)

Affects singles aged 25 – 34 living in property other than shared accommodation Exemptions – MAPPA level 2, Severe Disability Premium, Hostel resident 3 months

Example 1 bed rate before the change £91.15 pwk After change will get SAR £58.00 pwk Loss £33.15 pwk700 individuals in Leicester East Midlands average loss is £32 affecting 3,470 individualsImpact will roll out over 9 months.

Issues Too few ‘shared accommodation’

properties available to move too in PRS Cost of moving maybe prohibitive Tenancy management for landlords can

be more contentious with multi occupants

Rent collection can be complex Therefore some landlords maybe

reluctant to let to this age group*

LHA Rate change

Rate will be ‘frozen’ from April 2012

Increases will then be annual every April, by Consumer Price Index rate/ or from rent officer market rent information which ever is the lower*

Will not fluctuate, every claimant be on the same rate

CHANGES TO COME Council Tax Support Benefit capping Discretionary Housing Payments Welfare Assistance Other future changes, Universal Credit Reductions to HB for social housing

Council Tax Support Council Tax Benefit will be abolished from April

2013 Replaced with Council Tax Support 10% reduction (Loss of at least £3m for Leicester) Pensioners will be protected Biggest impact felt in working age population Biggest impact felt in working age population

Most households will pay around £200 pa towards Council tax bill – some for the first time in over a decade

Consultation in progress – have your say until 30th October

Council Tax Support Local scheme – project team set up Design is countywide to minimise where

possible a postcode lottery on award levels. Leicester working with other local councils.

Scheme will be fair, protect the most vulnerable but achieve the savings

Support the theme – work pays Legislation laid Summer 2012

Estimated Council Tax Support expenditure at Leicester

Working age - the most vulnerable LA’s to define who are deemed to be most

vulnerable.Who could be vulnerable Groups identified for

consideration so far are:-

Claimant or child in receipt of middle or higher rate care components DLA/AA.

Disabled people who are living independently but in supported living accommodation who have carers and are unable to work because of their health.

Households with dependent child under five living on Income Support.

War widow’s income could be excluded from the income calculation.

Benefit Income Capping April 2013

Benefit income for working age benefit claimants will be restricted

£500 pwk week for families/lone parents £350 pwk for singles.

Any ‘benefit income’ above £500 will not be paid.

Housing benefit is included in this but NOT Council Tax Benefit which will no longer be a state benefit in April 2013.

DWP data shows around 500* households affected in Leicester.

Where the family make up has more than 4 children they will receive less Housing Benefit towards their rent - an average loss of £130pw. *

Council households in Leicester where the family make up has more than 5 children will receive less Housing Benefit towards their rent - an average loss of between £71. 18 and £82.74pw. *

* Data is currently being checked & more accurate information should be available shortly.

Benefit Income Capping continued

The DWP are providing LA’s with the details of those claimants they think will be affected by this cap.

These claimants are being sent a letter from the DWP stating they are likely to be affected by the change.(Plus Direct.Gov web site have a calculator & there is a telephone helpline)

The LA will also be contacting these customers before the change occurs.

Benefit Income Capping continued

Exemptions apply if claimant is in receipt of…

Disabled Living Allowance/PIP/AA, War widow/widower, Support element of ESA (& UC when in) and Working Tax Credit.“Grace period”Cap not applied for 39 weeks for people who have worked continuously for previous 12 months and have lost their job through no fault of their own.

HB Restriction – April 2013 Working Age customers in social housing

14% for 1 extra bedroom* 25% for 2 or more extra

This % amount is a reduction from the eligible rent then the HB award is calculated on the lower amount.

* The room allowances are in line with LHA so it does not always mean there is a spare bedroom as some young children are required to share

There will be some exemptions.

Issues Leicester has predominately family sized accommodation

3 bed roomed

Very few two bed social housing across Council and RSL stock.

RSL’s are considering converting 4 – 5 bed stock into 2 bed flats or shared accommodation.

This in turn reduces the capacity of larger housing stock.

The majority of under occupied accommodated stock is occupied by pensioners.

Issues

Shelter say people will try to absorb the cut rather than move.

The impact on Leicester City as a whole is unknown but Government statistics say 670,00 homes face cuts from this measure.

Perverse incentive :This could force families into smaller but more expensive private rented accommodation.

Data suggests this change could affect households by an average of between £955 pa in the North West to £1,385 pa in London.

Discretionary Housing Payment (DHP) Leicester will receive £209,549K for 2012/13 Awarded on a case by case basis.

Payments are time limited, although claimants can re apply. They are paid at the discretion of the council to households who can show a financial need for additional support and are in receipt of Housing Benefit which does not cover the rent in full.

Leicester’s policy aims to support families and disabled to remain in their homes while they seek alternative cheaper accommodation

Payment where HB is from 50 pence upwards

DLA moves to PIP Disabled Living Allowance moves to Personal

Independence Payments Reduced qualifying criteria Not means tested. Review impacts on 16 -64 year olds (2013 -16) Will be a tougher ‘fitness’ test Aim to reduce numbers claiming DLA Not life long award – there will be regular reviews Those who no longer qualify will loose out on

Blue Badges, Carer’s Allowance and Motability schemes, exemption to benefit cap, and other Welfare reform changes, DHP support, priority for Welfare Assistance etc……..

Welfare Assistance 2013 Community Care grants and other Crisis

loans will be abolished. A new award will be paid out by LA, instead of DWP

Will be a grant Administered at the discretion of the LA Nationally £178m to distribute These will be local schemes but funding will

not be ring-fenced LA’s will use existing powers to administer

payments

Universal Credit Oct 2013Means tested benefit which replaces:- Income Support JSA ESA(IR Tax Credits HB One payment direct to claimant, paid in arrears, administered by DWP.

Starts Oct 2013 gradual migration until 2017

Universal Credit headlines New Benefit for Working age applicants in/out of work Single application route – Online claims *Housing Costs ( Housing Benefit & Mortgage

Allowances) Tax Credits Working Tax element Child Care element Child Tax Credit Single taper (65%) Working age claimants only Capital limit £16,000 Mimics work Single system of disregards No ‘cliff edge’ loss of financial support

What’s not in UC? JSA & ESA – contribution based DLA (& what will be PIP) AA Child Benefit Bereavement benefits, SSP, SMP,

Maternity Allowance, Industrial Injury Disability Benefits, Widows Benefit.

Universal Credit core objectives improve work incentives through a

combination of improved earnings disregards and/or lower benefit withdrawal rates;

smooth the transitions into and out of work; reduce in-work poverty; simplify the system, making it easier for

people to understand, and easier and cheaper for staff to administer; and

cut back on fraud and error.

NB) CTS will follow the same objectives

HB payments under Universal Credit One single monthly payment in arrears

Households could get £2000+ to cover, food, living expenses, rent, child care etc.

Majority of HB payments will go to the claimant and not the landlord

Only 20% of payments in the social sector housing claimants will be paid direct to landlord through the ‘default exception scheme’

Third party payment will be catered for ( Power of Attorney etc.)

To evaluate the effect there are to be 6 pilot sites starting in June 2012.

Timetable for UC February 2012 - Royal assent of the Welfare Reform Bill. October 2012 (approx.) - Main UC regulations published. April 2013 - Pathfinder area used to test UC.

October 2013 to April 2014 – New Claims and Change of circumstances.If applying for - jobseekers allowance, employment support allowance, housing

benefit, working tax credit or child tax credit. April 2014 – You may be moved onto UC if it is considered that you will benefit from this –e.g. if you are on working tax credit and work a small number of hours a week

but could work more hours with support from UC. The end of 2015 - the end of 2017 – If you have not been moved onto UC already you will be moved during this time.

What help is out there? (in Leicester)

Housing Options LCC is reviewing the homelessness policy LCC is reviewing the allocations policy Extensive publicity Money Advice Service Financial help with moving to cheaper,

smaller accommodation Additional funding DHP’s for vulnerable households Landlord/stakeholder awareness sessions

Any Questions?Chandra ThakrarRevenues & Benefits Team LeaderLeicester City Councilchandra.thakrar@leicester.gov.ukrbstepteam@leicester.gov.uk