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Tenant Conference 2012 - Welfare Reform
 

Tenant Conference 2012 - Welfare Reform

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  • What’s happening? The Government are planning some major changes to the benefit system. Some changes have already happened but the majority will be brought in between 2012 and 2017. This will be done through the Welfare Reform Act which became law in March 2012. Why are they doing this?To reduce the benefit bill (£152 billion in 2010-2011) by reducing the number of people claiming benefit and by paying out to less to benefit claimants. To make work pay – people should always be better off in work than on benefit Reduce welfare dependency – greater help for people to find work and less disruption when people move from benefits into work. Reduce complexity of the benefit system by having one benefit for all working age claimants called ‘Universal Credit’. It is important to stress that most of the changes will only affect people of working age.
  • What’s happening? The Government are planning some major changes to the benefit system. Some changes have already happened but the majority will be brought in between 2012 and 2017. This will be done through the Welfare Reform Act which became law in March 2012. Why are they doing this?To reduce the benefit bill (£152 billion in 2010-2011) by reducing the number of people claiming benefit and by paying out to less to benefit claimants. To make work pay – people should always be better off in work than on benefit Reduce welfare dependency – greater help for people to find work and less disruption when people move from benefits into work. Reduce complexity of the benefit system by having one benefit for all working age claimants called ‘Universal Credit’. It is important to stress that most of the changes will only affect people of working age.
  • Don’t panic – the changes are not going to happen straightaway. New claimants will move over to UC from October 2013 with existing claimants who have a change of circumstances. Everyone will be moved over in phases from 2013 – 2017. In the meantime, things will stay the same.Can tenants have their Universal Credit paid direct to the landlord? – No. Once they start getting Universal Credit, tenants will not be able to automatically have their HB paid direct to us. The Government has said some ‘vulnerable’ people who get into arrears will be able to have their payments made direct but they haven’t worked out the details of this yet. Get a bank account - with the introduction of Universal Credit, all benefits payments will be made direct to you. It will be extremely important that you have a bank account as your benefit payments will be paid monthly to you, not NLH. Having an account will help you to manage your money, set up monthly Direct Debits and take the worry out of budgeting. If you don’t already have a bank account, let us know and we will work with Barclays to help.Set up a Direct Debit - the best way to ensure your rent is paid on time is to set up a Direct Debit. This will ensure money is paid direct to NLH at a date that is convenient to you. Some of the advantages of Direct Debits are that they are quick and convenient, payments can be amended if and when your rent changes, and payments are secure and covered by a Direct Debit guarantee.Get online - under the new system, the vast majority of benefits claims will be made online. We are currently doing a lot of work to help our communities get online – refer to the ‘Get IT Together’ Project and ’Diamond Net’ (Broadband Project).
  • Go through opportunities and threats as outlined in slide.
  • Our approach to helping tenants deal with the change to Universal Credit will be two fold:Preventing arrears and preparing our tenants:Identify vulnerable or ‘at risk’ tenants and engage at an early stageProvide support with budgeting and help to put more money in tenant’s pocketsIncorporate financial inclusion into everyday roles (e.g. money management, access to low cost credit, promotion of savings)Increase take up of bank accounts and explore use of ‘jam jar’ accounts with the credit unionIncorporate digital inclusion to help tenants get online and manage claims, make savings, pay online2.Dealing with arrears: Review Income Collection Policy and procedures:- Develop risk matrix- How will we manage increase in cases with shortfall arrears?- How will we manage tenants who won’t/can’t move but are building up arrears? Review staff resource to ensure teams are well placed to cope with a heightened workload and increased level of arrears Establish protocols with new and existing debt advice providers
  • Cuts in HB entitlement for ‘under-occupiers’From April 2013 – HB restricted to only 1 bedroom per person or couple. If a customer has 1 or more spare bedrooms they will be regarded as ‘under-occupying’’ the property and HB will no longer pay for the additional room. Who will be affected?This only applies to people of working age – pensioners are NOT affected.Housing Benefit rules allow:• 1 bedroom for each adult or couple.• A child under 16 is expected to share with another child of the same gender and children under 10 are expected to share with another child regardless of gender.• A bedroom for a non-resident carer is allowed where they provide overnight care to a person with a disability.Exceptions will NOT be made for circumstances such as separated parents who share the care of their children, couples who use their “spare” bedroom when recovering from an illness or operation etc...What will happen? - If a customer is under-occupying, their HB will be reduced and they will get less money.How much will customers lose?The cut will be a fixed percentage of their eligible rent.The Government has said that this will be set initially at a 14% cut for one extra bedroom and a 25% cut or two or more extra bedrooms. What options to customers have?If their HB is cut, customers will have to eithermake up the shortfall from their own income, or move to a smaller property.
  • Cuts in HB entitlement for ‘under-occupiers’From April 2013 – HB restricted to only 1 bedroom per person or couple. If a customer has 1 or more spare bedrooms they will be regarded as ‘under-occupying’’ the property and HB will no longer pay for the additional room. Who will be affected?This only applies to people of working age – pensioners are NOT affected.Housing Benefit rules allow:• 1 bedroom for each adult or couple.• A child under 16 is expected to share with another child of the same gender and children under 10 are expected to share with another child regardless of gender.• A bedroom for a non-resident carer is allowed where they provide overnight care to a person with a disability.Exceptions will NOT be made for circumstances such as separated parents who share the care of their children, couples who use their “spare” bedroom when recovering from an illness or operation etc...What will happen? - If a customer is under-occupying, their HB will be reduced and they will get less money.How much will customers lose?The cut will be a fixed percentage of their eligible rent.The Government has said that this will be set initially at a 14% cut for one extra bedroom and a 25% cut or two or more extra bedrooms. What options to customers have?If their HB is cut, customers will have to eithermake up the shortfall from their own income, or move to a smaller property.
  • Impact1547 under-occupiersMajority in 3 and 2 bed propertiesMajority need to move into 1 and 2 bed properties Not enough properties - would take between 2 and 2.7 years to move everyone if we closed the waiting list to new tenants.Annual shortfall of £885,199 in HB payments = loss of income to us and the tenant73% of under-occupiers already in arrears – totals £175K and average of £155 per under-occupier
  • Number of other changes coming in – how can we help tenants cope with these?PIP = may find tenants lose out – harder to get for short periods, re-assessment of existing claims Local authorities will have a reduction in the amount of money they get to pay council tax benefit – not sure what the effect of this will be yet.Potentially hHarder for tenants to get CLs and CCGs as social services can set own criteria – affect ability of tenants to buy white goods/furniture etc.

Tenant Conference 2012 - Welfare Reform Tenant Conference 2012 - Welfare Reform Presentation Transcript

  • What’s the Benefit? Steve Hepworth
  • Welfare Reform - overviewWhat is happening?• The Government is bringing in major changes to the benefit system from 2013 onwards.• The majority will only affect people of working age.Why are they doing this?• Reduce the welfare bill• Reduce welfare dependency• Simplify the system• Ensure people are better off in work than on benefit
  • What is really happening?• Universal Credit – one payment, paid monthly in arrears and recipients have to pay their own rent from this. 3,401 NLH tenants affected.• Cuts in Housing Benefit / bedroom tax/ underoccupation – working age tenants may no longer get enough benefit to cover the rent. 1,547 NLH tenants are affected.
  • Universal Credit – will I need to do anything?• Don’t panic – it will only affect you from October 2013 if you are a new claimant or an existing claimant who has a significant change of circumstance.• Direct payment – unless you are considered ‘vulnerable’ by the DWP you will be responsible for paying your rent. You will therefore need to contact us to agree how you will do this.• Bank account – you will need a bank account to have your benefit paid into. This will also help with managing bills.• Set up a Direct Debit – this is the best way to ensure your rent is paid on time.• Online access – you will need to make and manage claims using the internet.
  • Universal Credit – how might this affect me?• Simpler benefit system • With one big so easier to change monthly payment, it from being in or out of will be important to work. budget carefully.• More generous tapers mean possible • Some people might increase in overall find it difficult to benefit income. manage a monthly• Paying bills online or budget. by direct debit can mean big savings on • Some people might things like gas or fall behind with their electricity. bills.
  • Universal Credit – what are NLH doing?We are going to introduce a number of measures to: Identify vulnerable or ‘at risk’ tenants who might need help; Offer support with budgeting and help to put more money in our tenants’ pockets; Help tenants access bank accounts or other ways to pay their bills; Review how we deal with tenants who get into arrears; Have effective referral procedures to debt and benefit advice in place.
  • Cuts in Housing Benefit for under- occupiers• Introduction of room criteria for working age Housing Benefit claimants from April 2013:  Single person/couple = 1 bedroom  Children under 16 same gender = share  Children under 10 different gender = share• Cut in Housing Benefit of 14% for one room and 25% for two rooms under-occupying = average loss of between £11 & £20pw• No planned exceptions for separated parents, foster carers, disabled people etc.
  • Cuts in Housing Benefit for under- occupiers – the numbers• A 3 bed house with 4 people living in it can be under- occupied• 1,547 of our households are under-occupying. In many areas 1 out of every 4 homes is under-occupied• The HB gap for these tenants will be £885,199 per year• 73% of under-occupying tenants are already in rent arrears – an average of £155.04 each• 993 households in 3 bed properties are under- occupying – but only 44 two bed houses /maisonettes came empty last year.• IF NLH doesn’t collect the shortfall then we will lose nearly £1million a year
  • Under-occupiers – what choices do I have?• Stay in your home and pay the shortfall by: Making it up from your current benefit income; Increasing your income through employment; Asking other people living in the home to help; Taking in a lodger (consider effect on benefits).• Downsize to a smaller property: Not enough properties for everyone to move into; Might not get the same type of property or in the same area; BUT..... Cheaper to run a smaller house as lower utility bills; Mutual exchange to somewhere you would like to live.
  • Under-occupation: what are NLH doing?1. Find out what tenants are going to do – run focus groups2. Adopt a tailored approach using information to:  Review our under-occupation scheme & introduce a dedicated officer to help tenants downsize;  Facilitate and promote mutual exchanges;  Explore a matching service for those who want to share or take in a lodger;  Protocols with other housing providers; Review the Choice-Based Lettings policy to increase priority banding for under-occupiers; Review our own Lettings Criteria.
  • Case study – April 2012 Income Support Housing Benefit Council Tax Benefit Child BenefitDave is a lone parent who doesn’t work and receives IncomeSupport.He lives in a 3 bedroom house and gets Housing Benefit whichcovers his rent of £85 per week in full.He has 2 dependant daughters aged 8 and 6;He also has a son aged 16 who lives elsewhere with his mum - heoften stays at weekends.
  • Case study – April 2013 From April 2013, Dave will be classed as under-occupying his home by one bedroom as no roomallowance is made for his son’s visits.He will therefore have his Housing Benefit cut by14% and will he will have to pay the shortfall of£11.90 per week. If Dave cannot afford this, he will have toconsider downsizing to a 2 bedroom property. The only 2 bed properties available are high riseflats or bungalows 4 miles away from hisdaughters’ school.
  • Other changes – April 2013• Replacement of Disability Living Allowance with Personal Independence Payments (PIP) – will affect those in and out of work• Changes to council tax benefit• Abolition of the Social Fund – social services to administer Crisis Loan/Community Care Grant payments & budgeting loans now ‘benefit advance’.• Benefit Cap of £500 per household per week
  • What else are we doing?• Improving tenant profile information• Developing a communication plan for tenants• Working in partnership with other agencies – e.g. advice providers, other landlords, financial inclusion groups• Ensuring front-line staff are trained and able to deal with potential problems• Introducing a Financial Inclusion Team to help tenants
  • If you would like further information or to discuss any issues that may be affecting you, visit our Welfare Reform stall or speak to one of our Welfare Reform Guides