Key Changes in Universal Credit and Housing Benefits Management

Benefits Update Universal Credit Pauline Wass Benefits Manager

Agenda The Benefits Service Current administration arrangements Benefit caseload Current performance Welfare Reform Changes in 2011 January 2012 & the future

The Benefits Service Housing & Council Tax Benefit HB & CTB Caseload 25,957 (March 2012) 18,854 Total Housing Benefit Claims 4,592 Privately Rented Claims New Claims 8,202 26 days (Average to Feb 11) Changes 56,746 7 days (Average to Feb 11) Free School Meals & Clothing Grants Visiting/Welfare Benefits Assessments for Domiciliary & Residential Care Contributions

Key Changes Implemented from April 11 Non dependant deductions increased Increase ranged from 55p in CTB to 12.85 in HB (per non dependant per week) Increasing again in 2012, from 45p in CTB to 13.25 in HB (per non dependant per week) Changes to the Local Housing Allowance 5 Bed Rate Removed/Upper limit introduced for all property sizes. Extra room allowance for a carer 15 excess removed Claims based on bottom 1/3rdof the Housing Market New Claims from April 2011 Existing Claims given 9 months protection Will have started to impact on customers from January 2012.

Key Changes Local Housing Allowance Mar 2011 55.00 98.08 115.38 126.92 161.54 187.50 Nov 2011 Mar 2012 Shared Room One Bed Two Bed Three Bed Four Bed Five Bed 57.50 92.31 109.62 121.15 150.00 N/A 57.50 92.31 109.62 121.15 155.77 N/A (Based on Greater Liverpool) From April 2012 LHA Rates will be Frozen up rated annually by CPI

Key Changes 2012 January 2012 Pre April 2011 claims start to lose protection from LHA Changes Shared Accommodation Rate applied to those under 35 Existing claims protected up to the next anniversary date or until the 9 month protection from April LHA changes ends Claimants with exemption from these provisions include: claimants with dependant children, young people leaving care, people with severe disabilities, some ex offenders who pose a serious risk and former residents of specialist homeless hostels. April 2012 Further increase in non dependent deductions LHA Rates Frozen will be up rated annually according to CPI Impact of LHA and Shared Accommodation Rate changes will continue

The Future April 2013 & beyond Size Criteria applied to tenants in social housing 14% reduction in rent for 1 extra bedroom 25% reduction in rent for 2 or more Overall cap on benefits will be implemented, exemptions include those entitled to: Working Tax Credit Disability Living Allowance/Attendance Allowance Employment Support Allowance War Pensions LHA Rates increased annually by CPI (or 30thpercentile which ever is lower) Localisation of Crisis Loans and Community Care Grants

The Future Council Tax Support Scheme April 2013 Council Tax Benefit will be abolished and replaced by a Local Scheme. Overall funding reducing by at least 10% Funding is cash limited Vulnerable Pensioners will be protected (No definition of Vulnerable or Pensioner as yet) May be a requirement to protect other vulnerable groups Must support the work incentive Claims are unlikely to be taken by DWP if you need to claim will need to contact the Local Authority. Some people will pay more under the local scheme than they would have paid under Council Tax Benefit. Data Sharing arrangements with the DWP are uncertain. A new appeals process needs to be developed this could be difficult as each Local Authority will be developing its own scheme. Regulations will not be laid until the summer much of the detail is unknown.

The Future Universal Credit Universal Credit expected to start from October 2013 Key Aim Work should pay and be seen to pay, everyone should be better off in work. Simplify the system by merging in and out of work benefits Replace a range of working age benefits with one benefit. Income Support Job Seekers Allowance (IR) Employment Support Allowance (IR) Tax Credits (Working Tax Credits and Child Tax Credits) Housing Benefit Digital by default Real time interface with HMRC Housing Credit paid with Pension Credit but not before October 2014

The Future Universal Credit Basic entitlement is total of allowances and additions very similar to the current system with elements for: Claimant and Partner Children Disability Housing Costs Rules expected to correspond to the benefits they replace Maximum entitlement is paid to all those out of work with no other income subject to personalised conditionality agreements. Those in work will have the maximum amount tapered down using a single taper this is expected to ensure that customers are always better off in work. Earnings disregards are more generous but more complex Maximum Earnings Disregard Reduced by 1.5 x Housing Element Minimum Earnings Disregard

Universal Credit Earnings Housing Costs Disregard Taper Disabled Children Personal Allowances Income

Budgeting (DWP Benefits Conference Feb 12) One of the biggest behavioural changes required will be around the way that claimants receiving universal credit will need to budget and manage their money. Universal credit will be paid: As a single household payment On a calendar monthly basis Direct payment of housing costs to the claimant Need to understand how low income households currently manage their money, and what types of support they will need to successfully budget under universal credit. Currently working with: the British Bankers Association to engage with high street banks to try and ensure that basic bank accounts are available to claimants and have inbuilt budgeting capability Credit Unions to explore options to support claimants manage their UC payment. The Housing Demonstration projects beginning in June 2012 will test payment of housing benefits direct to tenants on a monthly basis. This opportunity will be used to influence the financial inclusion support for universal credit.

Migration to Universal Credit (DWP Benefits Conference Feb 12) Phase 1 October 2013 and April 2014: 500,000 new claimants will receive Universal Credit in place of one of the old working age benefits or credits. At the same time a further 500,000 existing claimants (and their partners and dependants) will also move on to Universal Credit when their circumstances change significantly, such as when they find work or when a child is born. Phase 2 April 2014 to around end of 2015: will give priority to households who will benefit most from the transition, such as those Working Tax Credit claimants who currently work a small number of hours a week but could work more hours with the support that Universal Credit brings. Overall 3.5 million existing claimants (and their partners and dependents) will be transferred onto Universal Credit during this second phase. Phase 3 end 2015 to end 2017: will see around 3 million households being transferred to Universal Credit by local authority boundary. This phase will have the flexibility to respond to the circumstances of particular local authorities as they change and will focus on safeguarding financial support, such as Housing Benefit payments, to claimants as the old benefit system winds down.

Current Position Direct payment of HB to landlords LA s can make payment direct to the landlord where it will assist the customer to secure or retain a tenancy (DWP Circular A4/2011) For a tenancy to be retained or secured it is implicit that the rent should be affordable to the tenant whilst they are on HB (generally LHA levels). For existing tenants there must be proof that a contractual rent has been reduced. For new tenants there must be proof that rent has been reduced and the property was previously let at a higher rent. If the rent increases and the customer is unlikely to be able to meet the increased liability payments direct may cease. Default position Benefit to be paid to the customer. Regulations still allow for payment direct to the landlord in some cases Where arrears are equivalent to 8 weeks; or Customer is unable to manage their own affairs etc Ministers have made it clear that this additional discretion is a temporary provision. Under Universal Credit we believe that payments will be made monthly and will normally be paid direct to the claimant.

Discretionary Housing Payments Available to support customers entitled to Housing and/or Council Tax Benefit who need further financial support with housing costs. 167,471 awarded in Knowsley for 2012/13 Funding of an additional 45,475 was announced in February 2012. Circular S1/2012 It is the Government s intention that these funds are used to provide targeted support to help to meet the housing needs of claimants affected by HB reforms . Currently 4,592 privately rented HB claims 46 each for the year Its not going to go far! (Our actual caseload is 25,957)

Working together We can support customers to get Welfare Benefits Advice and help them to claim benefits or access support and debt advice. - Please contact us before you take action to evict a tenant. http://www.knowsley.gov.uk/residents/financial-advice.aspx Remember to tell us about any changes as soon as possible and to encourage your tenants to notify us of changes. Even if we pay you direct we are limited in what we can tell you unless your tenant agrees in writing, that we can share information with you.

More information http://www.knowsley.gov.uk/residents/housing/housing-benefit.aspx http://www.knowsley.gov.uk/residents/financial-advice.aspx Contact Details: Housing Benefit Section, Municipal Buildings, Kirkby. L32 1TX Benefits@knowsley.gov.uk Contact Centre 0151 443 4042 One Stop Shops: Huyton, Kirkby, Halewood & Prescot Pauline Wass, Benefits Manager Email: pauline.wass@knowsley.gov.uk