Welfare Reform – The Challenges Tuesday 22 nd May 2012 Angela Forshaw Director of Housing & Customer Services.
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Welfare Reform – The Challenges
Tuesday 22nd May 2012
Angela Forshaw
Director of Housing & Customer Services
A little bit about LMH.....
• Liverpool Mutual Homes is a LSVT
• We are ‘tenant led’
• We manage 15,500 homes
• We are the City’s largest HA
• We were the City’s ‘final transfer’
• We set up in April 2008
• We have a CEO, 3 Directors and 300 staff
• We will have invested £380m in our stock & neighbourhoods by March 2013
Tenants at the heart of what we do....
• Started work programmes on day one
• Tenant priorities - c/heating and double glazing
• Good progress made - out performed the business plan- focus on quality and efficiency
• Award winning schemes e.g. Daneville - standard setting structural programme
• On-going tenant input, consultation & choice
More than just ‘housing’......
• Local service delivery focus
• Resources based on area need and characteristics
• Good fit with partners across the wards and neighbourhoods
• Wider regeneration role – physical environment, ASB, education and employment, health and older people
• Whole community approach - work with all residents, partners and organisations
Welfare Reform Act – March 2012
Recap
• Improve work incentives – work always pays
• Simplify benefits system - make it less costly to administer
• Fairness – to those claiming benefits and the taxpayer
• Fairness – protect the most vulnerable
• Control expenditure and housing costs
• Encourage mobility in social housing sector
• Make better use of social housing stock
• Universal Credit / Direct Payments
• Under-Occupation (Bedroom Tax)
• Non-Dependent Deductions
• Capping
• Disability Living Allowance / Incapacity Benefit
• Council Tax Benefit
Liverpool Context• 43,000 social housing tenants claiming HB (full & part) in Liverpool • 11,636 LMH tenants claiming HB (full and part)• Approximately 75.5% of LMH rent received direct
Main Changes….
Timelines
• Royal Assent 8th March 2012
- Some changes now, some April 2013, some October 2013
• Move to Universal Credit to be completed 2017/18
• For a period - 2 systems running
- UC administered by DWP – October 2013 (maybe April 2014)
- HB administered by LA until 2018
Welfare Reform Act
Welfare Reform Act
UC & Direct Payments - main features
• National Scheme administered by DWP
• Replaces: IS, WTC, JSA, HB, Child Tax Credit, ESA etc.
• Paid to working age claimants – monthly in arrears – direct
• Ambition - 80% plus of claims to be made online
• New work related requirements / commitments / tough sanctions
• October 2013 new claims / change of circs will go onto UC
NOTE
For people of pensionable age – housing costs part of Pension Credit from October 2013.
New claims both claimants need to be of pensionable age (61 years as at April 2013 and rising).
Direct Payments – Risks
• Loss of Income – forecast 3 -10% nationwide• LMH 1% = £550,000 !• Arrears increase – abandonment - homelessness• Increased collection costs / court costs • Relationship with DWP• 13-15% new tenants - no bank account / don’t use DD regularly • On-line claims - digital exclusion • Claimant commitments / requirements / sanctions
Welfare Reform Act
Under Occupation - main features
• DWP criteria per bedroom:• Every adult couple
• Any other adult aged 16 or over
• Any two children same sex under 16
• Any two children regardless of sex under 10
• Any other child aged under 16
Note size criteria currently excludes - fostering, staying access, pregnant women
• Working age households from April 2013 (new and existing claimants)Note size criteria not applied to people in receipt of Pension Credit
• Social rent and affordable rent tenancies
• Reduces housing costs entitlement by 14% (£12) for 1 bed under occupation and 25% (£22) for 2 or more
Welfare Reform Act
Under-occupation – Risks• Estimated12 - 60% under occupation rate amongst HAs • Financial impact £600-£1300 per year per household• Hardship & increase in arrears • Unable to meet demand for downsizing • Tenant transfers - increased void costs• Increased relet times - lack of demand for certain properties
Welfare Reform Act
Non Dependent Deductions
• 10 year freeze on NDD reversed over 3 yrs - April 11 / 13
• Lowest rates from £7.40 to £13.40
• Highest Rate from £47 to £90 (average rent £70.70 !)
• DLA replaced by Personal Independence Payment - NDD no longer exempt from April 2013
Welfare Reform Act
Welfare Reform Act
Capping- April 2013 - main features
‘’No household will receive more in benefits than the average earnings of working households after tax”
• £350/week for singles £500/week for couples and lone parents (current figs)
• Doesn’t apply to Pension Credit or WTC recipients
• Who will the cap affect?
- Large families entitled to a significant amount of CTC / families in high rental areas
- Families with 4/5 children likely to see £12 / £40 per week shortfall applied to housing costs element of UC
Welfare Reform Act
Other Risks• Failure of tenants to engage with what’s happening• Data gaps • Changing job roles flexible teams / structures /different skills / competing priorities / resources • Increased demands for support services e.g. RAISE, CABs • Increase in Debt Relief Orders • Void rates increase
Welfare Reform Act
Preparing for the challenges• Lobbying• Information gathering / risk assessments• Staff training & resource planning• Policy & procedure reviews• Relationship building with DWP• New ways of working - including working with Banks / Credit Unions• Communication !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Welfare Reform Act
Preparing our tenants for the challenges
• Employment & Training Initiatives
- Shared apprenticeship scheme
- VIP scheme
- Work Clubs
- Work Placements
- Procurement
Welfare Reform Act
Preparing our tenants for the challenges
• Digital Inclusion Initiatives
- Internet cafes
- Silver surfers
- Training partnerships
- Direct help
Welfare Reform Act
Preparing our tenants for the challenges
• Financial inclusion Initiatives
- ‘Money Matters’ in secondary schools
- Tenant Newsletter articles
- Work with Credit Unions / banks
- Special mail-outs
- Welfare Rights Advice – increased provision
Welfare Reform Act
‘Good housing is a determinant of good health, education and life chances.
The Government’s housing and welfare reforms however, present a huge challenge for social landlords & tenants.
As tenants are increasingly forced to make harsh financial decisions – ‘ digital inclusion, financial inclusion, worklessness initiatives’ – these phrases are becoming as common place in the housing office as ‘rent accounting and lettings policies’.
Welfare Reform Act
Rising to the challenge…
• What can we do that we are not doing now?
• What works?
• What doesn’t work?
• How do we focus on those most affected?
• How do we help them?
• How do we prevent homelessness?
• How do we create safe and stable communities
Thank you for listeningLet’s discuss?
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