Welfare Benefit ReformsAn Introduction

Mark Henderson, Director of Housing

Wolverhampton Homes

March 2012

Impact upon Council Tenants

Introduction of universal credit New size criteria rules where a tenant is deemed

to be under-occupying a property An overall household benefit cap £500 per week

(or £350 for single claimants) Payment of housing support direct to the tenant

and not the landlord Proposed national administration arrangements

for the new benefit

Housing Benefit changes and welfare reform

What are the key changes? When do the changes take effect? What do we think the impact is likely

to be? How can we plan?

Non-dependant deductions – April 2012

NON DEPENDANT DEDUCTIONS 23% inc 23% inc

50 week rate 2010 2011 2012

In receipt of main phase ESA(IR). Aged 25 or over and on IS/JSA(IB) or aged 18 or over and not in remunerative work 7.70 9.78 11.91

Age 18 or over and in remunerative work, gross income:      

less than £124.00 7.70 9.78 11.91

£124.00 - £183.00 17.68 22.41 27.30

£183.00 - £238.00 24.28 30.78 37.54

£238.00 - £316.00 39.73 50.39 61.41

£316.00 - £394.00 45.24 57.41 69.94

not less than £394.00 49.66 63.02 76.80

Impact

Around 860 tenants will be affected by the 23% increase

From £2.13 to £13.78 per week increase Average need to find £4.75 pw (£237.50 pa) Around 30 tenants taken out of benefit

altogether (last year 35) Annual impact £206K extra to collect Further steep rise planned 2013

Size criteria for tenants from April 2013

Working age households up to age 65 Eligible rent reduced by 14% or 25% if under-

occupying by 1or 2 or more bedrooms Profiling indicates that 31% of working age tenants

will be affected (4,193) Assume 60% on benefit Average losses £12.85pw, some over £20pw Total impact £35K per week , £1.75m per year

Size criteria impact

Property type 2 Bed 3 Bed 4 Bed

Average rent April 2012

£69.01 £75.20 £81.93

Reduction

1 bed under occupation £9.66 £10.53 £11.47

2 bed under occupation n/a £18.80 £20.48

One bedroom for

Every adult couple Any other adult aged 16 or over Any two children same sex aged under 16 Any two children different sex aged under 10 Any other child aged under 16 A non-resident carer (claimant/partner have

disability and need overnight care)

More likely to impact

Women/couples whose children have left home Disabled couples where a separate bedroom is

needed (Discretionary?) Singles/couples living in high rises which are no

longer regarded as family accommodation Families with children whose age and gender do

not “fit the rules” Ages 35 to retirement most affected

Introduction of capping – from April 2013

Working age claimants £350 pw single claimants. £500 pw

families/couples - based on current figures Housing costs ‘balancing figure’ Partial exemption for ‘working families’. Not Disability Living Allowance recipients/ War

widows Impacts larger families who could lose average

£93 per week.

Move to Universal Credit – From October 2013

All new claims and changes in circumstances

Existing claims between 2014 and 2017, regional switchover

Monthly payments in arrears (like a salary) Online claims/telephone National call centre in Warrington

limited local service

Direct paymentsOctober 2013

Working age households in social rented sector Applies when claim/move onto Universal Credit Existing claims by 2017 Default – direct payments to individuals Amendments to Bill to give claimants the choice

for payment direct to landlord, withdrawn by House of Lords

Housing support for pension age claimants – From 2014? New claims made to the Pension Service New claimants choose whether rent is

paid to self or landlord Existing claims – gradual transfer and paid

direct to landlord Choice to be extended to existing

pensioner claimants later

Issues to consider

Identifying who will be affected – Customer and stock profiling Customer Insight available, HQN / HB modeling

Risk assessing potential tenants Collecting the shortfall Use of hardship fund / discretionary payments Requests for rehousing:

To cheaper/smaller accommodation Due to family breakdown – non dep v lodger?

Issues to consider

Facilities/assistance with making and maintaining online claims

Identifying claimants who move onto Universal Credit

Liaison with DWP Dealing with rent arrears if paid monthly in

arrears

Issues to consider

Collecting rent (does everyone in our organisation realise this!?)

Identifying tenants who qualify for payment to landlord

Record more tenant and household information Identifying and supporting tenants who are

finding it difficult to manage their finances Systems amendments to monitor and identify

problems quickly

Planning for the Housing Benefit changes and Welfare Reform We now need to inform residents, staff, Board

members and the Council about the changes Continue to profile and target those likely to be

most affected Develop a communication strategy

Tenant focus group Board champion (s) Roadshow approach

Be prepared to start collecting rent from most of our tenants