Latest Developments on Benefit Cap & Direct Payments

  • Latest Welfare Reform Developments for Sheltered & Supported Housing (Exempt Accommodation)

    Benefit Cap Relaxation

    /images/blog/michael_at_annual_conference_2012.jpg
    Michael speaking on Welfare Reforms at our Annual Conference

    One of the details of the Chancellor of the Exchequer's Autumn Statement that didn't get a mention in the news coverage is paragraph 2.66. It would mean little to most people; however; the words "Housing payments for those in supported exempt accommodation will be disregarded for the purpose of the benefit cap" has great significance for the housing support & social care sector.

    This will be funded through reductions in Discretionary Housing Payment of £25m over the next 3 years.

    One of the primary concerns of people within the sector has been the potential impact of benefit caps (£350 per week for single (childless) people and £500 for families), especially for services that have traditionally high service charge costs. Women fleeing domestic violence and abuse, ex-offenders and single homeless people with support needs are the groups most often mentioned. It could have affected other services as well because the housing costs of supported and sheltered housing (most of which is Exempt Accommodation as per 2.66 of the Statement) are higher than general needs and this would potentially mean that people who live in such accommodation therefore have a lower entitlement to other benefits, given the Benefit Cap. This would not have been fair.

    Separate Administration of Housing Costs for Exempt Accommodation

    Since the 17th September, it's also been less and less likely that the Benefit Cap would be retained for people in Exempt Accommodation. What happened on that date was that Iain Duncan-Smith & Lord Freud told the Work and Pensions Select Committee that Exempt Accommodation residents would have the housing component of Universal Credit administered outside of Universal Credit much as it is now.  This means that significant levels of cost, for example, intensive housing management can be charged to the Housing Benefit service charge where not otherwise funded. This immediately means that the Benefit Cap becomes unviable in those circumstances for the reasons I mention in the paragraph above.

    Support Solutions predicted both the separate administration of costs and the relaxation of the Benefit Cap in these circumstances as you will know if you've attended our recent Briefing events or Conference or have seen our Briefings.

    You may find it helpful to be part of our LinkedIn Group on Exempt Accommodation & Intensive Housing Management where we discuss these things. It's free of course.

    Direct Payments

    We believe that the next significant issue will be around direct payments. We have predicted that the rules on direct payment will be relaxed.

    The thinking of the DWP appears to be that there should be a set of criteria that would decide whether someone should be subject to a "Payment Exception" where their rent is paid to their landlord.

    Category 1 criteria, where a Payment Exception is likely might include

    • 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 
    • 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

    Category 2 criteria, where there is a less likely 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
    • 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

    Whilst the decision on a Payment Exception would be taken by a Universal Credit officer; the claimant, their representative or their landlord can request one and the process should not be "done to" the claimant. It is intended to be a temporary; however, Category 1 criteria include being in supported housing so presumably a Payment Exception may well apply to residents in most sheltered and supported housing. In other words, provided it fits with the situation of the claimant, the rent will go to the landlord not the claimant.

    We need to await further developments on this; however, it would be helpful to providers and their tenants if the rules on direct payments (Payment Exceptions) were to be relaxed.

    Michael Patterson, Director, Support Solutions Ltd

    6th December 2012.

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