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 BenefitDave 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