1 Landlords Forum 15 th September 2011 LHA changes and Universal Credit Mick Bullock

Agenda Changes to LHA from April 2011 Shared Accommodation rate for under 35’s from January 2012 Universal Credit Any questions? 2

3 April 2011 changes Local Housing Allowance removal of £15 top up Removal of 5 bed rate Weekly cap on LHA rates LHA rates set at 30 th percentile Transitional protection/direct payment safeguard

4 More April 2011 changes Size criteria – additional room for non resident carer. Start of the staged increase in non-dependant deductions (affects all claimants with non dependant deductions)

5 Impact on Walsall customers (refer to handout 2) Removal of top up – 1355 customers 5 bed rate removal – 45 cases --biggest individual impact -- £68.08 LHA 30 th percentile –reduction of between £5 - £68.08 per week – 4659 customers affected. Non dependant deductions – 2245 customers

6 Impact on Walsall Decrease in Housing and Council tax Benefit payments Possible impact on rent arrears, council tax collection rates Increase in enquiries from customers and landlords Increase in Discretionary Housing Payments Increased demand on housing support (homelessness service)

7 Communication with Customers All existing customers have been made aware of the changes (letter sent in March) Further notification to be sent before change impacts and when change takes affect Advice from staff for new and existing customers Website updates

8 Shared Accommodation Rate for under 35’s Currently applies to single claimants under 25 From 1 st January 2012 will apply to under 35’s New claims from 1 st January 2012 will go straight onto SAR Existing claims will have some protection

9 Shared Accommodation Rate for under 35’s DWP reasons for change Projected £215m a year savings to be made Part of its policy of encouraging a return to work Those on benefit should not be better off than in work. “Reasonable and fair …as many of their contemporaries in work would be living in shared accommodation ”

10 Shared Accommodation Rate for under 35’s DWP estimates as at March 2011, 54,000 claimants under 25 and 93,000 aged 25 and over being paid LHA at the SAR. This is within a total LHA caseload of just over one million 65,000 in UK will be affected by this measure with an average UK loss in HB entitlement of £41/week/claim. (West Midlands 5,240 average loss £32) Level of losses vary greatly between regions and even within Local Authorities (Black country £30 Birmingham £40)

11 When does it take affect? Claims made before April 2011 Existing claimants who, on or after 1 January 2012 are in a TP period from the April 2011 LHA changes will move to the SAR at the same time as their TP ends; Claims after 1 April 2011 but before 1 January 2012 Existing claimants not receiving TP or who have lost it because of a change of circumstances before January 2012 will move to the SAR on the anniversary date of their claim; Claims made before April 2008 Existing pre pre-LHA cases will move to the SAR (previously known as the single room rent) on the annual review of their case.

12 Exemptions to the SAR Regs add two new exemptions to the SAR rules Homeless people who have slept rough or who are at risk of sleeping rough, and Ex Ex-offenders who could pose a risk of serious harm to the public Exiting exemptions to SAR continue to apply LA and RSL tenants. Tenants in exempt accommodation (old reg 11 claims) Claimants on middle or highest rate care component of DLA Claimants who have a non non-dependant residing with them. Claimants entitled to an extra bedroom to allow for a non non-resident carer to sleep over where overnight care is required. Claimants under the age of 22 who were formerly in care.

13 Preparing for the change Estimating the impact of the SAR change on existing claims (level of loss, dates etc) Alerting other local services and plan for coordinated approach Identifying and notifying those affected and the date they will be affected Publicity including what help and support is available from the LA Impact on provision of debt/hardship advice, housing advice, homeless etc Impact on DHP budgets

Universal Credit Welfare Reform Bill Due to become law later this year Introduces Universal Credit Universal Credit will replace housing benefit 14

Universal Credit Why change? Complex system Too many different types of benefits Welfare Benefit expenditure out of control Culture of worklessness 15

Universal Credit One payment to replace most working age benefits (including housing benefit) Simplification of benefit system Housing Benefit for claimants of Pension age will be made with Pension credit payments 16

17 Key dates Welfare reform bill LHA single room rate to apply to under 35’s (currently under 25’s) 2013 – LHA rates set by Consumer price index Council Tax Benefit replaced by local scheme Universal credit introduced for new claims (replacing housing benefit) 2013 – Size restriction for social landlords By 2018 – universal credit replaces housing benefit,

18 Any questions? Mick Bullock mobile