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