Welfare Reform, Universal Credit & Exempt Accommodation

Welfare Reform, Universal Credit & Exempt Accommodation Michael Patterson & Danny Key: Support Solutions February 2013

Key Questions • Why Welfare Reform? • What is Universal Credit? • Key Dates • Exempt Accommodation • Intensive Housing Management • Pensioners • Bedroom Tax

Key Questions • Benefit Cap • Social Fund • Council Tax Benefit • Employment Support Allowance • DLA/PIP

Why Welfare Reform? Biggest change to welfare in 60 years! Comes from 2010 White Paper “Welfare That Works” Streamline a complex system: replace many benefits with one Ease the transition to work & incentivise work Save money: £18bn by 2015

Pension Credit, Child Benefit, Carer’s Allowance (will remain) Council Tax Benefit (To be locally administered) Contributory ESA (Work Related Activity Group & Support Group) Universal Credit JSA Income related ESA Income related Income Support Working Tax Credits Child Tax Credits Housing Benefit UniversalCredit

Universal Credit Key dates Testing Period APRIL 2013 New claims from unemployed claimants start OCT 2013 New claims from in-work claimants start Managed migrations start APRIL 2014 Managed migration activity completed 2017

Universal Credit Detail • Intended to be an online managed process • 4 elements: • Standard allowance (living costs) • Allowance for children • Housing component (unless claimant is in Exempt Accommodation) • Additional needs component • Conditionality & sanctions: • Universal Credit conditional on a “Claimant Commitment” • http://homeless.org.uk/sites/default/files/HL_WelfareReformActBriefing2_May2012.pdf

Exempt Accommodation & Intensive Housing Management • Nonprofit landlord (County Council, Registered Provider, Voluntary Organisation or Charity) • Legal interest in accommodation (ownership or lease), in which…. • ….”care support & supervision is provided” • Where the service is provided by or on behalf of the Landlord • Accommodation-based & tenancy sustainment/floating support can be Exempt Accommodation

Exempt Accommodation & Intensive Housing Management • What about agency managed schemes: “by or on behalf of the landlord”? • Tenants of Exempt Accommodation will have the housing component of their benefit administered at local level much as it is now. • This can be a significant amount of money • It has helped providers to reduce dependency on SP • And subsidise support costs in tenders

Exempt Accommodation & Intensive Housing Management • Creating Exempt Accommodation scenarios is a good idea: • A good way of funding prevention & taking pressure off statutory services • For tenants: service levels maintained • Providers: income levels maintained • Local Authorities: recover amounts paid through HB from the DWP as long as the landlord is a Registered Provider. • We need to get ALL of our ducks in a row!

Exempt Accommodation & Intensive Housing Management • What exactly is IHM? (Or “additional housing management services”) • Ordinary housing management functions, i.e. lettings, tenancy sign-ups, HB claims more intensively & frequently provided • Additional housing management functions due to the nature of the tenant group and the accommodation • Housing Management functions linked to communal areas and the provision of systems, i.e. testing of door entry, CCTV and alarms, re-provision of furniture and equipment etc.

Exempt Accommodation & Intensive Housing Management • Housing Corporation defined – ‘A guide to Supported Housing’www.supportsolutions.co.uk/docs/guide_to_supported_housing.pdf • Judge Turnbull Legal Precedent • Bristol CC v AW [2009] UKUT 109 (AAC) – satisfactory test for determining support is more than minimal is to ask whether support provided likely to make a real difference to the claimant’s ability to live in the property

Exempt Accommodation & Intensive Housing Management • Why refer to support when defining IHM? • Judge Turnbull Legal Precedent continued; • R(H) 6/08, R(H) 4/09 – ‘Support’ involves the landlord doing more than, or different from, the exercise of its ordinary property management functions • Chorley BC v IT (HB) [2009] UKUT 107 (AAC) – support not confined to counselling, advising, encouraging etc. ‘the carrying out of repairs which clearly go beyond ordinary housing management can amount to support’ • IHM can therefore be sufficient to qualify as exempt accommodation!

Welfare Reform: Potential Impacts for • Temporary Accommodation • Exempt Accommodation • Additional Demand for above services

Temporary Accommodation • New subsidy rates in 2013 – lower subsidy to Local Government for people living in shared accommodation • Benefit Caps – particular issue in London • Increased Demand due to welfare reform • Potentially less accommodation supply, and/or, shortfall of funding due to lower subsidy rates payable

Exempt Accommodation • Sheltered accommodation – exempt or not? • Agency Managed Supported Housing – exempt or not? • Implications if not……….. • Housing Benefit Regulations amendments, i.e. service charge eligibility – Plan B; incorporate IHM/AHMS into rent (HCA acknowledges this)

Potential Solutions to Implications • Re-negotiate lease/management agreements • Revise occupancy agreements • Different commissioning arrangements • Plan B – incorporate IHM/AHMS into rent, over and above target/social rent • Relationships with Registered Providers • HCA registration

Exempt Accommodation & Intensive Housing Management • Please talk to us! • www.supportsolutions.co.uk/briefing/issue_12/exempt_accommodation.html • www.supportsolutions.co.uk/briefing/issue_12/ucihm.html • www.supportsolutions.co.uk/briefing/issue_11/intensive_housing_management_.html • www.supportsolutions.co.uk/blog/blog.html

“Bedroom Tax” • The size criteria in the social rented sector will restrict housing benefit from April 2013 to allow for one bedroom for each person or couple living as part of the household, with the following exceptions: • Children under 16 of the same gender will be expected to share • Children under 10 expected to share regardless of gender

“Bedroom Tax” • Disabled tenant or partner requiring a non-resident overnight carer will be allowed an extra room. • Any household deemed to have more bedrooms than they require, as defined by the criteria, will lose a proportion of their housing benefit. The level of cut will be a fixed percentage of the Housing Benefit eligible rent, initially set at a 14% cut for one extra bedroom and a 25% cut for two or more extra bedrooms • Doesn’t apply to Exempt Accommodation

Benefit Cap • From April 2013 caps will be introduced on total weekly benefit entitlement: • £350 per week for single people without children • £500 per week for families • This will affect larger families, those living in high rent areas and potentially supported/sheltered housing • People on DLA (soon to be PIP) and people on ESA (Support) are exempt from the Benefit Cap • Claimants who have been in employment for 52 weeks or more when they claim benefit will be exempt from the cap for up to 39 weeks

Benefit Cap The following claimants will be exempt from the cap: • Those entitled to Working Tax Credit • Disability Living Allowance • Personal Independence Payment (from April 2013) • Attendance Allowance • The support component of ESA • Constant Attendance Allowance • Industrial Injuries Disablement Benefit • War Widows and War Widowers pension

Direct Payments • Most working age tenants will no longer have the option to have the housing component of their benefit paid direct to their landlord. This is meant to ease the transition to work. • The DWP has said it will build in exceptions where people are “vulnerable” • 6 Pilots operated to test direct payment, including vulnerable claimants: www.dwp.gov.uk/policy/welfare-reform/housing-support/social-sector

Payment Exceptions Financial and Vulnerability Factors • Tier One factors – Highly likely/probable need for a PE • Drug/alcohol and/or other addiction problems e.g. gambling • Learning difficulties including problems with literacy and/or numeracy • Severe/multiple debt problems • In Temporary and/or Supported accommodation

Payment Exceptions Financial and Vulnerability Factors • Homeless • Domestic violence/abuse • Mental Health Condition • Currently in rent arrears/threat of eviction/repossession • Claimant is young either a 16/17 year old and/or a Care leaver

Payment Exceptions Financial and Vulnerability Factors • Tier Two factors - Less likely/possible need for a PE • No bank account • Third party deductions in place (e.g. for fines, utility arrears etc.) • Claimant is a Refugees/asylum seeker • History of rent arrears • Previously homeless and/or in supported accommodation

Payment Exceptions Financial and Vulnerability Factors • Other disability (e.g. physical disability, sensory impairment etc) • Claimant has just left prison • Claimant has just left hospital • Recently bereaved • Language skills (e.g. English not spoken as the ‘first language’). • Ex Service personnel • NEETs - Not in Education, Employment or Training

The Social Fund • The Welfare Reform Act will abolish Community Care Grants, Crisis Loans & Budgeting Loans from 1st April 2013 • These will be replaced by non-ring fenced discretionary local authority support which may not take the form of cash payments. • The Social Fund is not closing as the regulated fund will continue payments for maternity, cold weather/winter fuel heating and funeral expenses. • Universal Credit will provide payments on accountinstead of Budgeting Loans.

Budgeting Loans

Council Tax Benefit • Historically local authorities have been topped-up by central government for paying Council Tax Benefit. • The Welfare Reform Act localises the responsibility for Council Tax Benefit with a 10% funding reduction, a fixed funding pot & protection for pensioners & possibly “vulnerable” people: this may mean even less for other people.

Employment Support Allowance • From May this year the Welfare Reform Act limited the duration of contribution-based ESA to 12 months for those claimants in the Work-Related Activity Group (WRAG), although not for those in the Support Group. • Weekly amounts are to be: • WRAG: £25.95 • Support: £74.50

Disability Living Allowance & Personal independence Payment • DLA will be replaced by PIP for new claimants from April 2013 for working age people • PIP is comprised of: • Daily living component • Mobility component • There are standard and enhanced rates for both components • The amounts payable are unknown & existing DLA claimants are to be reassessed in order to transfer to PIP

Disability Living Allowance & Personal independence Payment Personal Independence Payment is being introduced in stages: • April 2013: Initial pilot testing • June 2013: Start to take new claims from all claimants in all parts of the country • Jan 2014: Full national reassessment likely to begin • March 2016: All current DLA claimants of working age will have been contacted about claiming Personal Independence Payment

Disability Living Allowance & Personal independence Payment • Assessment for Personal Independence Payment will involve health professionals considering the evidence provided by the claimant and any professional that may support them on a regular basis. • Most people will also be asked to a face to face consultation with this health professional as part of the claim process • The health professional will provide advice to a benefit decision maker at the Department for Work and Pensions • The benefit decision maker will then use all of this information to decide the claimants entitlement to Personal Independence Payment

Responding • Respond to restrictions on traditional revenue such as Supporting People & Housing Benefit • Look at NHS budgets to fund prevention on a payment by results basis. Engage with Clinical Commissioning Groups! • Calculate your social return on investment (SROI) • Think about how we engage with the new social investment agenda

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Welfare Reform, Universal Credit & Exempt Accommodation