Welfare Reform

1. Welfare Reform Sam Lister, Policy & Practice Officer, CIH

2. Timetable • The bedroom tax (April 2013) • Household benefits cap (April 2013) • Universal Credit – working age tenants payment to tenant along with other out of work elements (October 2013) • Pension Credit (October 2014) • Review of support charges and exempt accommodation (post UC?)

3. Housing support welfare cuts Budget Red Book & Spending Review Policy Costings 2014/15* (£ million) • Social sector size limits 490 • Non dependent deductions 340 • Household benefits cap 270 • Local housing allowance (PRS)1645 • Other housing cost support (SMI) 130 • Discretionary housing payments -40 • Additional room for carers -15 • Total annual saving (steady state)2820 • Other welfare benefits7500

4. Welfare benefits: old & new

5. Summary • Rent shortfalls from housing costs cuts • Shrinking pocket from which to make up loss • Changes in the way benefits are paid without support to manage money • Vulnerability support is temporary • Landlords: rising costs and lower collection rates • Available options for housing homeless and vulnerable shrinking (PRS & temporary housing) • Increased housing stress and rising demand • Cuts to advice services (CLS)

6. Private rented sector

7. Private rented sector • Changes already made • 51,920 claimants (88%) losing average £8.00 per week as result of move to 30th percentile • 3,490 affected by shared accommodation rate lose an average of £24 per week (about 15% of 1 bed caseload) • 310 lose as a result of the 4 bedroom limit around £40 per week • Overall benefits cap on top from April 2013

8. LHA limits Leicestershire 2012

9. Temporary housing

10. Temporary housing • Existing HB rules continue • Subsidy limit based on 90% of January 2011 LHA rate for the property (not household size) • HB award subject to household cap • Under universal credit • Housing costs element based on appropriate LHA rate for family size paid part of claimants UC award • Management element (£60) will be separated out and paid direct to the authority

11. Supported housing

12. Supported housing • Supported housing that is ‘exempt accommodation’ will be ‘outside’ universal credit • Any accommodation where ‘care, support or supervision is provided • Funding stream irrelevant • Individual rather than property based test • Temporary measure?

13. What does this mean? • Unclear what ‘outside UC’ means • Retain other out of work benefits? • Housing costs only? • All of the rent or just the additional cost? • Costs will become increasingly transparent • Don’t hasten further reform • Localised system? – may be better to be inside UC • Social security is demand led • Partial – similar to temporary housing?

14. Eligible housing costs: the law • Rent is eligible - ordinary landlord overheads (insurance, maintenance, voids) • Not eligible: ‘general counselling or any other support services’ (any kind of advice and support that helps the tenant maintain their tenancy) • Eligible: services which tend to preserve the ‘fabric of the dwelling’ provided they are not in respect of services that are ineligible • If it is support – it does not somehow become eligible if it is re-classified as ‘intensive housing management’

15. Eligible and ineligible Eligible Ineligible Assistance with budgeting /debt counselling Assistance claiming benefits Resettlement activities teaching life-skills Liaison with relatives Dealing with neighbour disputes (ASB services generally) Reminding tenant to take medication • Assistance for tenants in arranging for plumbers • Assistance for tenants in ensuring security of dwelling (e.g. reminding them lock up) • Controlling access and other concierge type services • Minor repairs (e.g. changing light bulbs, unblocking sinks)

16. April 2013 changes

17. April 2013 • Social sector size criteria • Household benefits cap (all tenures)

18. Social sector size criteria • Deductions for under-occupation • 1 bedroom (14% of eligible rent) • 2 or more bedrooms (25% of eligible rent) • Exempt • State pension credit age (61 by 5 October 2012) • Shared ownership • Those in sheltered or supported housing who receive support services provided by the landlord (exempt accommodation) • Grace periods • 13 weeks previously afford the rent (no claim in last year) • 52 weeks if recently bereaved

19. Calculating size • One room for tenant and partner • One room for each other person aged 16+ • A child aged 15 or under will be expected to share with one other child aged 15 or under of the same gender • A child aged 9 or share with one other child aged 9 or under regardless of gender • One room for any one else (i.e. unpaired) • One room if the tenant and/or partner needs an overnight carer (maybe minor modification to include disabled children) • No definition of what constitutes a bedroom (large or small)

20. So it affects… • Parents with shared access (child benefit wins) • Foster parents (foster children do not count) • Couples using additional bedroom whilst recovering from illness • Disabled and adapted properties • Unable to move – or move delayed whilst waiting for property to become available

21. Household cap

22. Exemptions • Pension age • Working tax credit • Disability living allowance (or PIP) • Support component of ESA • Industrial injuries disablement benefit • 39 weeks grace if lose job and had been work for 50 of the previous 52 weeks

23. Who does it affect? • Couples • Three child families where rent is £160 or more • Four child families where rent is £100 or more • Five+ child families rent is £46 or more • Lone parents • Four child families where rent is £152 or more • Five child families where rent is £87 or more

24. DWP targets

25. Universal credit

26. Key features • Combined assessment award and payment (housing costs) • Surrogate wage • Better off in work • Individual responsibility • To make a claim and report changes • Presumption of payment to claimant • Automated system • On-line claims or national call centre • Loss of local one to one advice

27. Total income with council tax Couple, two children, rent £80, council tax £25

28. Scale of change • DWP taking on • 4.8 million housing costs cases • 2.0 million in-work claims • Total UC caseload around 8.0 million • Total PC caseload round 2.1 million

29. Claims and payment • Claim on-line or to call centre • Payment calendar monthly in arrears to claimant • Bank account • Budgeting advice and/or subsidised banking product • Payment exceptions will be broadly based on the LHA payment rules with some modifications (probably broader) • Assumption will be that payment exceptions are a temporary position

30. Advice: supply and demand • Increase in demand • Shrinking supply – Community Legal Service funding for welfare benefits advice withdrawn from April 2013

31. Summary and conclusions

32. Conclusions Tenants • rent shortfalls to be paid for…. • from shrinking benefits… • paid in arrears…. • without assistance and advice to help budget Landlords • work harder to collect… • a reduced income….. • with increased costs

33. Conclusions Local authorities • Rising demand for services (advice, support, housing) • Reduced housing options (private rented sector) • Reduced direct and indirect funding to authorities and partner agencies (e.g. CLS)

34. Get the latest news & advice on welfare reform CIH Welfare Reform Service For the very latest policy news Practical expertise on policy and best practice to help housing organisations cope with upcoming welfare reforms. Services include: • income health checks and service reviews; • in-house training on welfare reform and the impacts; • facilitation of strategic partnerships with commercial and charitable organisations; • and providing executive and team briefings on the subject of welfare reform. welfarereform@cih.org www.cih.org/welfarereform @CIH_Policy