Universal Credit claimants who fall behind on rent payments could see up to 20% of their monthly allowance redirected to landlords, the DWP has announced.
The move comes after housing organisations raised concerns that the previous amount of just 5% could result in increased arrears and possible evictions.
Universal Credit brings together six different benefits into one monthly payment and the housing element will, in most cases, be paid directly to the claimant – rather than their landlord.
The new system is designed to “encourage financial responsibility”, says the Department for Work and Pensions. However, some housing organisations and charities are concerned that vulnerable claimants – which may include people with learning difficulties or debt problems – may struggle to manage their finances and fall into rent arrears.
The DWP say “work coaches are being trained to assess a claimant’s financial capability and will refer to personal budgeting support where appropriate”.
Where Universal Credit claimants need additional support to help keep up with their rent payments, the DWP may make rent payments directly to landlords, and deduct additional amounts from a claimant’s monthly Universal Credit payments if requested by landlords.
Communities Minister Kris Hopkins said:
“Universal Credit helps claimants and their families to become more independent through simplifying the welfare system. I welcome this initiative to help social landlords and tenants prepare for Universal Credit.
“I’ve been impressed by the work I’ve seen that social landlords do in supporting their tenants and it’s clear to me they have a vital role to play in helping them to make this change. A large number of social housing tenants will over time move onto Universal Credit so I would encourage landlords to get involved.”
In a ‘support pack‘ published for housing organisations, the DWP said:
“The amount that can be deducted from a claimant’s universal credit if they fail to pay their rent, has been increased from 5% to an amount of up to 20% of the universal credit standard allowance, which will ensure claimants are back on track with payments quicker. The minimum amount that will be deducted is 10%.”
If a claimant accumulates a months worth of rent arrears it will trigger “early intervention” by the DWP, who will review a tenants financial status and may consider making rent payments directly to landlords where appropriate.
Should a tenant accrue two months of rent arrears, the DWP will step in immediately and divert the housing element of Universal Credit to a claimants landlord.
20% of a claimants ‘standard allowance’ could be deducted and diverted to landlords to clear rent arrears as quickly as possible. The DWP had consulted with charities and experts on deducting as much as 40% from a claimants standard allowance.
However, like many others, The Money Advice Charity described this amount as “excessive”, which “could ultimately compound the financial difficulties that led to the arrears building up.”
Responding to the consultation (pdf) the charity said:
“A maximum deduction rate of 20% for housing-related arrears would strike a more appropriate balance between increasing repayments and ensuring that these repayments do not have unintended negative consequences.”
Social landlords are being encouraged to identify tenants who may be struggling to keep up with their rent payments under Universal Credit.
Lord Freud, Minister for Welfare Reform said:
“Social landlords have been playing a vital role in welfare reform and supporting tenants who are already receiving Universal Credit. There is great work happening in the sector.
“Universal Credit is now available in 1 in 10 Jobcentres and will be in almost 100 by Christmas, with national roll-out beginning early next year – so now is the ideal time to boost preparation activity.
> Didn’t they say that last year ?
“For the first time many tenants will be paid their Housing Benefit directly and I would encourage landlords to think about identifying tenants who need support to prepare for this, and put those who are ready onto a direct payment early.”
Universal Credit has been beset with delays and costly IT problems. The DWP has already written-off £40 million failed IT system with a further £90 million predicted to be thrown away over a five-year period.
Work and Pensions Secretary Iain Duncan Smith originally promised that 1,000,000 households would be on Universal Credit by the end of 2014. However, DWP figures show that less than 18,000 households were claiming Universal Credit by 9 October.
The national roll-out of Universal Credit is expected to be fully completed by 2018.
Source – Welfare Weekly, 13 Nov 2014
Cash-strapped North councils have diverted more than £300,000 of funds to top up Government help for those left reeling by the bedroom tax.
Welfare reforms have seen changes made to benefits which have forced many to seek smaller housing while scores of others struggle to pay their rent.
Thousands applied for Discretionary Housing Payment (DHP) cash payments to get by, but now many councils have spent over the amount allocated by Government and have had to find extra funds from elsewhere.
Fears are also spreading the situation could get worse as authorities may be even more out-of-pocket next year when the Government will cease to offer DHP funding.
Hartlepool Council had one of the highest deficits – £115,239 – with the total spent on DHP hitting almost half-a-million pounds.
In Gateshead, the overspend was £90,000, after the authority spent £583,000. Chiefs will now bid for extra DHP cash as the council foresees a further shortfall.
Sunderland City Council spent £690,000 and had a shortfall of £32,000. North Tyneside Council reported an underspend while Durham County Council was granted additional DHP funds to cope with demand.
In Middlesbrough the figure was £37,420, Redcar and Cleveland spent £5,000, while Stockton was the lowest over their allocated funds at £932.
Both Hartlepool and Middlesbrough councils said they met the shortfall by using money from the Local Welfare Provision (LWP), which can also be used to help people struggling with welfare reforms.
But the LWP will also be removed by the Government from April 1, 2015.
South Tyneside Council was left with a shortfall of £8,000 after granting £314,000 worth of DHP applications.
Meanwhile Newcastle City Council – which by far paid out the most DHP grants at £1.5m – was granted an additional £861,000 in DHP cash from the Government to cope with almost 3,000 applications.
Coun Dave Budd, Middlesbrough’s Deputy Mayor and executive member for resources, said: “The Coalition Government’s welfare reforms have placed a great many people in real hardship.
“From a very early stage we have been working with many partners – including local housing providers and the Citizens Advice Bureau – to address issues which can have a devastating effect on people’s lives.
“With the removal of the funding for the Local Welfare Provision from April next year, it will become even tougher to help those most in need. However, we will continue to do everything in our power as a local authority to mitigate those impacts.”
Labour Parliamentary Candidate for Redcar Anna Turley highlighted the situation, saying: “David Cameron and Nick Clegg’s bedroom tax has been a disaster for the hundreds of thousands of people hit by the cruel levy and it has come at a huge cost for local taxpayers.”
However, the DWP says more than £20m specifically earmarked to help people adapt to welfare reforms was not spent by UK local authorities last year.
Figures show almost two-thirds (63%) of councils paid out less than their total DHP allocation to tenants.
A spokesman for Hartlepool Council said: “The council recognises the significant detrimental impact that the bedroom tax is having on households and as a council we are doing everything possible to ease the pain for residents.
“In 2013/14, the Government’s introduction of the bedroom tax resulted in reduced housing benefit entitlements in Hartlepool of over £1m and affected over 1,400 households.”
Minister for Welfare Reform, Lord Freud, said: “We tripled support for vulnerable people to £180m last year to ensure the right help was in place during our far-reaching welfare reforms.
“The figures also show that recent scare stories about councils running out of money were grossly exaggerated.
“Our vital reforms are fixing the broken welfare system by restoring fairness for hardworking people and making sure work always pays, as part of our long-term plan.”
> The long-term plan evidently being to return Britain to being a feudal society…
Source – middlesbrough Evening Chronicle, 31 Aug 2014
> More smear tactics, courtesy of the Daily Excess – “hunt down” all those benefit fraudsters who are the real cause of all ills. You know it makes sense (to Excess readers, anyway…)
The Government has brought together officials from the Department of Work and Pensions, the tax office and local authorities to tackle the crime.
The streamlined approach goes hand-in-hand with powers unveiled earlier this year to clamp down on benefit fraud, including using bailiffs to confiscate high-value possessions from convicted benefit cheats.
> Now there’s a tactic which would work better against all those tax-cheating individuals and companies… but somehow they never get around to them.
Minister for Welfare Reform Lord Freud said: “Reducing benefit fraud and error in the system is a crucial plank of our welfare reforms to make work pay and the system fairer for everyone.
“By bringing teams from local authorities and HMRC into our investigation service we will be able to build on the hard work we’ve already done to crack down on benefit fraud.
“Alongside this change, Universal Credit is expected to reduce losses due to fraud by £1billion in five years when it is fully in place across the country.”
> Ha ha ha – Universal Credit is the biggest benefit fraud of all, millions spent on it and it still doesn’t work. If they’d not embarked on it, there’d be plenty of money for benefits.
The new service went live in nine local authority areas on Tuesday July 1 and will be rolled out across the country in the autumn.
It started in Corby, Cornwall, Cardiff, Southampton, Oldham, Hillingdon, Wrexham, Blaenau Gwent and East Ayrshire.
Joint investigations between local authorities and the Government have already led to a string of convictions, including Alycia Mallett from Broxbourne in Hertfordshire who admitted falsely claiming £35,700 in benefits while working as an escort.
She was given eight weeks’ custody suspended for 12 months in April at Stevenage Crown Court.
Source – Daily Express, 04 July 2014
> NOT included in the Excess article –
Fiction: People believe that some 27% of the Welfare Budget is claimed as a result of fraud
Fact: The actual figure is 0.8 % whilst tax avoidance and evasion is estimated at anywhere from £30bn to £120bn.
The Work and Pensions Select Committee has accused the coalition government of over-emphasising benefit fraud in a report on fraud and error in the benefits system.
According to official statistics included in the report, of the total £5.1 billion of ‘incorrectly’ paid benefits, £1.6 billion was underpaid and £3.5 billion overpaid.
The amount lost to claimant fraud represents just 0.7% of the entire 2012/13 benefits expenditure and the figure has remained relatively constant for several years.
The report says that “there is a large disparity between the official estimate of benefit fraud and the public perception”.
> Something that neither the DWP or the media has gone out of its way to emphasis. Quite the opposite, in fact…
A survey by Ipsos Mori in 2013 found that the general public believed that 24% of all benefits were claimed fraudulently, 34 times greater than the official 0.7% estimate.
The Work and Pensions Select Committee, which consists of MPs from all the main political parties, say that the government’s approach to tackling fraud and error in the benefits system “appeared to place emphasis on addressing fraud”.
Minister for Welfare Reform, Lord Freud and David Gauke MP, Exchequer Secretary to the Treasury, “appeared to place emphasis on addressing fraud” in a strategy document announced in 2010. They highlighted the government’s intention to:
- Employ private sector firms on a payment by results basis, where appropriate, to ensure the full adoption of cutting-edge private sector fraud prevention techniques;
- Redirect resource to the front line to prevent fraud and error from entering the system in the first place, through enhanced checks and tougher sanctions for those even attempting to defraud;
- Ensure that anti-fraud activity is protected from cuts, including through the recruitment of over 200 new anti-fraud officers to sanction a further 10,000 fraudsters every year;
- Remove the current silo-based approach to tackling fraud, by creating new integrated cross-departmental data-matching and fraud investigation services (see Single Fraud Investigation Service, chapter 4);
- Introduce a system for rewarding members of the public who provide information that results in significant recovery of public funds;
- Respond to the growing threat of organised fraud through a new Identity Fraud Unit and far tougher sanctions for those involved;
- Introduce a new mobile regional fraud taskforce to investigate each and every claim in high fraud areas, to increase the certainty of detection;
- Address the weakness of the current penalty regime by abolishing cautions as a penalty for fraud, increasing asset seizures, and introducing far tougher one-strike and two-strike penalties, and a new three-strike rule;
- Clean up nearly 2 million claims to remove error; and
- Increase the frontline support provided by “Big Society partners” to help educate and support customers to get it right first time.
The Work and Pensions Select Committee say that of these measures, “seven focus solely on benefit fraud, one is aimed at fraud and error generally, and only two appear to be specifically designed to combat error”.
> That’s because their starting point is believing that anyone claiming benefit must be doing something illeagal. I mean, its what those poor people do, isn’t it ?
Benefit fraud and error is extremely complex with many different causes and ‘risk factors’. Analysis by the National Audit Office (NAO) shows that the incorrect reporting of income accounts for 47% of all benefit overpayments.
Claims made by a single person when they are living with a partner accounts for 13% of all overpayments, whilst claims made by people living ‘abroad or untraceable’ represent 11% of benefit overpayments.
The incorrect disclosure of savings accounts for 8% of all benefit overpayments, according to official statistics.
The report says that the over-reliance on claimants to report changes in their circumstances to different parts of the DWP, HMRC, local authorities and other official bodies, means that they “aren’t always aware who needs to be told what information, and when”.
Criticising the government’s over-emphasis on benefit fraud, the Work and Pensions Select Committee recommended that:
“Whilst we understand that making a distinction between claimant error and fraud is not always straightforward, we believe that DWP could be clearer about the official estimated level of benefit fraud.
> They certainly could be clearer – but that wouldn’t suit the Government’s agenda.
“We therefore recommend that DWP publish, on separate days, discrete statistical summaries of its estimated rates of a) fraud and b) official and claimant error in the benefits system, alongside its more detailed report, to reduce the risk of confusion or conflation of these statistics in media reporting and public perceptions about benefit fraud, and to emphasise the importance of actions to reduce error as well as fraud.”
Source – Welfare News Service, 19 June 2014
Two-thirds of households in England affected by the bedroom tax have fallen into rent arrears since the policy was introduced in April, while one in seven families have received eviction risk letters and face losing their homes, a survey claims.
The National Housing Federation (NHF) said its survey demonstrated that the bedroom tax was “heaping misery and hardship” on already struggling families who were unable to pay their rent but unable to find anywhere cheaper to live because of a shortage of smaller homes.
The NHF survey is one of three separate reports published on Wednesday which collectively criticise the design and implementation of the bedroom tax and highlight the negative impact it has had on the lives of many of the 522,000 people in the UK who are subject to it.
The disability charity Papworth Trust says that a third of disabled people affected by the tax have been refused emergency financial help, despite government guidance that disabled people who live in adapted homes get first call on discretionary housing payment funding.
The trust said many disabled people who have been refused emergency payments – which are intended to provide short-term financial relief to those struggling to cope with the bedroom tax – were now cutting back on essentials such as food or household bills. It called on ministers to exempt people living in adapted properties from the tax.
Meanwhile, the Labour party has published the results of a freedom of information request which shows the number of tenants wrongly subjected to the bedroom tax as a result of drafting errors in legislation is nearly 50,000 – at least 10 times as many as official estimates.
Chris Bryant, the shadow minister for welfare reform, said information from a third of councils showed that 16,000 people were affected by the error, which affects working age tenants in social housing who have occupied the same home continuously since 1996.
The reports herald a day of parliamentary activity around the bedroom tax. A bill to abolish the tax will be introduced by Labour backbench MP Ian Lavery, while Lord Freud, the welfare minister, will appear before a committee of MPs to answer question on a raft of welfare reforms.
Lavery said he believed that the bedroom tax had caused the most visible poverty and heartache of all the coalition’s welfare changes. “I have seen with my own eyes the absolutely astounding impact the bedroom tax has on disabled and sick people. I’m not sure the government is aware of the hardship and misery it has caused. We are talking about ordinary people who have been forced to move from the homes where they have spent a lifetime raising their kids. They have been cast out like dogs in the night.”
The Department for Work and Pensions (DWP) said: “We are determined to support those who might need extra help through these necessary reforms. That is why we have tripled the extra funding given to councils this year to £190m – some of which is specifically targeted at disabled people – and have announced that £165m will be available for councils next year to help vulnerable tenants.”
It said the NHF could not prove whether the rise in tenant rent arrears was accounted for by the bedroom tax alone.
The bedroom tax – also known under its official names of “spare room subsidy” or “under-occupation penalty” – affects 660,000 housing benefit claimants living in social housing across the UK. Introduced last April, the policy imposes an average penalty of between £14 and £22 a week on working-age tenants deemed to have more bedrooms than they need.
NHF chief executive David Orr said: “From day one we have said the bedroom tax is unfair, unworkable and just bad policy. It’s putting severe pressure on thousands of the nation’s poorest people and must be repealed.”
This article was written by Patrick Butler, social policy editor, for The Guardian on Wednesday 12th February 2014.
Source – Welfare News Service 12 Feb 2014