Landlords Forum January 2010 Jo Robinson Revenues & Benefits Manager

Housing Benefit Changes from April 2011 Claim Process Universal Credit

April 2011 The following changes will apply with effect from 01/04/ bedroom Local Housing Allowance room rate will be removed £15 top-up abolished Remaining Local Housing Allowance rates capped Local Housing Allowance rates calculated differently Additional bedroom for non-live in carers Direct Payments to Landlords Increases to non-dependant charges

The 5 Bedroom Local Housing Allowance Rate This rate under Local Housing Allowance will cease to exist on 01/04/2011. It will only affect people receiving the five bedroom LHA rate, no one else. Even though the law changes in April 2011, this will affect customers in the following ways: New customers from April 2011 will only be able to get up to the four bedroom LHA rate Existing customers with the five bedroom LHA rate will be capped at the four bedroom LHA rate when: –They move –Their LHA anniversary comes around, or –Their LHA rate needs changing due to a change in the household

The £15 Local Housing Allowance ‘Top- Up’ At the moment if a customer can find a property where the rent is less than their LHA rate, we can pay a ‘top-up’ of up to £15 per week Example – Mr A’s weekly rent is £90.00 and he is entitled to full Housing Benefit, his household composition entitles him to an LHA rate of £ per week. Mr A would be entitled to a weekly top-up of £12.50 From April 2011 this £15 per week ‘top-up’ is being abolished so the Rent amount used for Housing Benefit purposes will always be the lower of either the customers contractual rent or their LHA rate. New and existing customers would be affected in the same way as the 5 bedroom rate being abolished.

Local Housing Allowance Rates to be Capped From April 2011 the LHA rates will be capped to the rates below:- One bedroom £ per week Two bedroom £ per week Three bedroom £ per week Four bedroom £ per week Based on current LHA rates in our area it is highly unlikely that our customers will be affected by these caps. If however, our LHA rates do ever rise above the cap levels then the same principles would apply as in the 5 bedroom rate and removal of the £15 top-up cases.

The 30 th Percentile Local Housing Allowance Rate The LHA rates will be calculated in such a way as to produce lower amounts. The current calculation is based on the median of market rents, the new calculation will be based on the 30 th percentile of market rents. Nuneaton, Bedworth, Hinckley & Coventry BRMA LHA Rate January th Percentile LHA Rate – January 2011* Difference WeeklyMonthly Shared House Rate£62.00£60.00£2.00£ Bedroom£98.08£91.15£6.93£ Bedroom£111.92£103.85£8.07£ Bedroom£126.92£121.15£5.77£ Bedroom£173.08£150.00£23.08£ Bedroom£ * The above figures are an indication only. Figures for April are yet to be confirmed

From April 2011 this will affect our customers in the following ways:- New customers from 01/04/2011 will get the LHA rate based on the new calculation Existing customers will get the LHA rate based on the new calculation when –They move or change address –Their LHA anniversary comes round (although they may receive 9 months transitional protection from the anniversary date), or –Their LHA rate needs changing due to a change in the household NB If the change in household entitles the customer to a smaller category of bedrooms then the change applies immediately however, if the change results in an entitlement to a larger category of bedrooms then the customer will receive 9 months transitional protection.

9 Months Transitional Protection Will apply where the new eligible rent from 1 st April 2011 is now lower than the previous eligible rent because of the new LHA 30 th percentile rates. In these cases the customer’s eligible rent for the period of transitional protection will be the lower of:- The eligible rent which applied immediately before 1 st April 2011 Or If they previously had a top-up payment in the eligible rent prior to 1 st April 2011, then the new contractual rent on/after 1 st April 2011

Example 1 – Normal Customer claims Housing Benefit on 10/05/2010 with a rent of £155 p w This is a 4-bedroom property The eligible LHA rate is £150 p w In this instance the eligible rent for HB purposes = £ p w On 10/05/2011 the claim is reassessed for the LHA anniversary The rent is still £155 p w The new LHA rate is £125 p w Transitional protection applies with the new eligible rent being either the lower of the previous eligible rent of £150 or the rent of £155 In this instance the eligible rent = £ p w On 10/02/2012 the claim is reassessed again to remove the protection In this instance the eligible rent = £ p w (the new LHA amount)

Example 2 – Top-Up being Paid Customer claims Housing Benefit on 10/05/2010 with a rent of £120 p w This is a 4-bedroom property The eligible LHA rate is £150 p w In this instance the eligible rent for HB purposes = £ p w (£120 rent + £15 top-up) On 10/05/2011 the claim is reassessed for the LHA anniversary The rent is now £125 p w The new LHA rate is £115 p w The maximum rent (LHA) of £115 is lower than the eligible rent determined on 10/05/2010 so transitional protection applies. The new eligible rent is either the lower of the previous eligible rent of £135 or the rent of £125 In this instance the eligible rent = £ p w On 10/02/2012 the claim is reassessed again to remove the protection In this instance the eligible rent = £ p w (the new LHA amount)

Example 3 – Increase in Category of Dwelling Customer claims Housing Benefit on 07/02/2010 with a rent of £320 p w Customer is entitled to the 3-bedroom LHA rate which is £325 p w In this instance the eligible rent for HB purposes = £ p w On 10/05/2011 customers circumstances change and now entitled to 4- bedroom LHA rate The rent is still £320 p w The 4-bedroom LHA rate is £300 p w The maximum rent (LHA) of £300 is lower than the eligible rent determined on 07/02/2010 so transitional protection applies. The new eligible rent is either the lower of the previous eligible rent of £325 or the rent of £320 In this instance the eligible rent = £ p w On 10/02/2012 the claim is reassessed again to remove the protection In this instance the eligible rent = £ p w (the new LHA amount)

Additional Bedroom for Carers If the customer or their partner are disabled and require an overnight carer then the carer would be taken into account in assessing the number of bedrooms (LHA) and rooms (Rent Officer Referrals) The change will apply to all Housing Benefit customers who satisfy the qualifying criteria from 1 st April Customers will be entitled to any arrears from that date when their claim is revised For existing claims the application of this change will trigger a new rent officer referral or a new LHA determination In order to decide whether the additional bedroom can be included the LA will have to establish:- –Overnight care is actually required –The care is actually being provided –There is an available bedroom for the carer’s use

Direct Payments For cases assessed under LHA arrangements the default position remains that Housing Benefit should be paid direct to the customer. Local Authorities (LA’s) must make payment direct to the landlord in the following circumstances:- –Payments are being made to the landlord from another income-related benefit to clear arrears –The customer is in arrears with rent the equivalent to 8 weeks Local Authorities (LA’s) also have the discretion to make payment direct to the landlord where:- –LA considers that the customer is likely to have difficulty in relation to management of his financial affairs. E.g. due to drug dependency or serious medical condition –LA considers that the customer is unlikely to pay their rent (due to past experience) –Customer has previously had payments made direct to the landlord due to arrears

The amended LHA regulations also extend from 1 st April 2011 the Circumstances in which Housing Benefit may be paid directly to the landlord for cases assessed under the LHA arrangements. Payment can be made directly to the landlord if the LA considers it will assist the customer to secure a new tenancy or retain an existing tenancy It is also intended to provide landlords with an incentive to reduce rents to a level that is affordable to the customer (i.e. the LHA rate) We are awaiting further guidance from the DWP regarding this new amendment

Discretionary Housing Payments In addition to the transitional protection for existing customers the Government is providing an increase to the Discretionary Housing Payments funding for Local Authorities of £10 million in the financial year 2011/12. No figures have been released yet as to the funding that Nuneaton & Bedworth Borough Council will receive. For customers wishing to claim a Discretionary Housing Payment they can contact the Benefits Team on or visit the Town Hall, Nuneaton.

Non-Dependant Deductions With effect from 01/04/2011 there will be significant increases to the levels of non-dependant deductions Housing Benefit Non-Dependant Deductions Aged 18 or over and in remunerative work with: April 2010 (per week) April 2011 (per week) Increase (per week) - A gross income less than £ per week £7.40£9.40£ A gross income £ to £ £17.00£21.55£ A gross income £ to £ £23.35£29.60£ A gross income £ to £ £38.20£48.45£ A gross income £ to £ £43.50£55.20£ A gross income £387 or more£47.75£60.60£14.85

Claim Process Telephone Claims – –Details taken over the telephone –Customer is either advised what evidence is required and is asked to provide it the next day if possible, or –If all evidence is provided claim is assessed straight away Claims made at Town Hall –Details taken when customer present –Customer is either advised what evidence is required and is asked to provide it the next day if possible, or –if all evidence is provided claim is assessed whilst customer waits Customers can still send an application form to us via the post

Evidence Requirements - Benefits Rent –Tenancy Agreement –Letter from Landlord to include Name and address of tenant Name and address of landlord (including an address if available) Tenancy start date/date rent increased Amount of rent charged Ineligible services included in rent Capital –Proof of all bank/building society accounts – latest statement –Stocks, shares, bonds etc Earnings –Wage slip – most current –Self Employed - customers accounts Benefits –NBBC can check majority –Bank statement Other Income –i.e. Maintenance, private pension etc

Vulnerability –Evidence of rent arrears –Action taken to recover rent arrears –Details of a support worker (if known) –Letter from GP/medical professional –Receiving debt counselling/advice Contact Details –

Landlords who receive their tenants’ Housing Benefit direct, have a legal duty to inform us of any changes in their tenant’s circumstances that may affect their Housing Benefit entitlement. If you know of a change in your tenant’s circumstances you must tell us about it immediately. If you fail to do so we may recover any overpayment of benefit directly from you. Your responsibilities as a Landlord

Some of the things you should tell us about include: If the tenant moves out – either temporarily or permanently, even if they move to another property that you own Changes to the amount of rent you charge or changes to the tenancy agreement Other people moving in or out of the property, such as a partner, children, relatives or other adults If you become aware that the tenant has started work This is not a full list. If you become aware of anything which you think may affect your tenant’s entitlement you must tell us straight away

FRAUD You can call in confidence about any suspected fraud on or

Universal Credit Initial introduction of Universal Credit is planned for April 2013 Transition completed by April 2017 Administered centrally by DWP Will include Housing Benefit, it is likely that Council Tax Benefit will not be included within Universal Credit May be some residual parts of housing support administration that will stay with Local Authorities i.e. Supported Accommodation

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