www.phhsl.co.uk CIH North East Seminar 5 th July 2012 WELFARE REFORM IS YOUR ORGANISATION RISING TO THE CHALLENGE? Peter Hall Director - PHHS Strategic Solutions to Improve Performance & Vfm
www.phhsl.co.uk What the Dickens is going on? Strategic Solutions to Improve Performance & Vfm
www.phhsl.co.uk Black Hole? Strategic Solutions to Improve Performance & Vfm
www.phhsl.co.uk Or New Dawn? Strategic Solutions to Improve Performance & Vfm
www.phhsl.co.uk Overview of the Changes to Date Private Rental Sector Local Housing Allowance (PRSLHA) • Limited to the lowest 30% of rents • £250 per week for one-bed, £290 for two-bed, £340 for three-bed , £400 for a four bed, nothing extra for 5+ • Increases linked to the consumer prices index (CPI) rather than (RPI) • Frozen in 2012-13 Benefit for single people aged up to 35 • Limited to the rent on a room in shared accommodation in the PRS (at the lowest 30% of rents also) from January 2012 Non Dependent Deductions – HB • Increased by nearly 60% to date – further 30% increase from April 2013. • Impact of between £2 and £13 per week for tenants. Strategic Solutions to Improve Performance & Vfm
www.phhsl.co.uk Overview of the Changes to Date Tax Credits • Earnings Limit reduced from £41.3k to £26k for 1 child & £32k for 2+ • New Working Hours rules for couples – increased from 16 to 24 hrs • 50+ Element removed • Income Reduction changes If annual income goes down by £2,500 or less, no change in award If annual income goes down by more than £2,500, award adjusted but the first £2,500 is ignored • Backdating Reduced – from 3 months to 31 days existing/calendar month new • Average Drop in Income of £1k per family Contributory Employment and Support Allowance • Limited to 1 year – youth provision for disabled people abolished • Income drop of up to £94 per week Strategic Solutions to Improve Performance & Vfm
www.phhsl.co.uk Overview of the Changes to Date Income Support • Lone parents with youngest child aged 5+ move from Income Support to Jobseeker's Allowance – requirement to find work. • Health condition or disability which limits their capability for work may be able to claim Employment and Support Allowance (ESA) instead. Incapacity Benefit • Being phased out by December 2013 - no new claims from January 2011, • New claims being assessed under Employment Support Allowance (with regular tests to assess a person's capability for work), existing claims subject to reassessment. • Where reviews result in awards of ESA, Job Seekers Allowance or Income Support ( 37% to date) claimants stand to lose up to £44 a week in benefits , with a £30 per week differential between the Higher Disability Rate for Incapacity Benefit (£88.55) and Severe Disability under ESA, JSA or IS (£58.20) Strategic Solutions to Improve Performance & Vfm
www.phhsl.co.uk Overview of the Changes to come Working families – conditional benefits • Part time workers will have to demonstrate they are seeking to earn more or face a sliding scale of cuts to their income. • If fall below national minimum wage (currently £212.80) threshold will have to demonstrate they are actively looking for additional hours, an additional, or new, job. • Threshold for single parents with a child under 13 will be about 20 hours with gross pay of £120 • With children over 12 they will be expected to work full time within 90 minutes of their home • Mothers and fathers treated as separate individuals • With a child under 13, one parent will be designated as the carer who will be under the same conditionality as a single parent. The other will be treated as a single worker. • A couple with children over 12 will both be expected to work 35 hours. Strategic Solutions to Improve Performance & Vfm
www.phhsl.co.uk Overview of the Changes to come Underoccupation • DWP eligibility criteria definitions used across social housing sector from April 2013 – i.e. one bedroom being allowed for each person or couple living as part of the household, a child aged 15 or under being expected to share with one other child of the same gender; and a child age 9 or under being expected to share with one other child aged 9 or under, regardless of gender. • Households under occupying accommodation will have their HB or Universal Credit reduced by a given percentage of the rent – which could be as low as £4 per week, or as much as £37, but on average £14. Strategic Solutions to Improve Performance & Vfm
www.phhsl.co.uk Overview of the Changes to come Disability Living Allowance (DLA) • Intention to replace DLA from April 2013 with a new form of benefit – Personal Independence Payment (PIP) • Firm details not available as the government’s consultation and responses to it have only recently closed/been published. • Intention is that PIP will focus support to those individuals who experience the greatest challenges to remaining independent and leading full, active and independent lives • Expected 20% overall reduction in current expenditure on DLA • Equates to £15 per week reduction per working age claimant • Or could lose average of £73 per week if reassessed and not eligible Strategic Solutions to Improve Performance & Vfm
www.phhsl.co.uk Overview of the Changes to come Social Fund • Abolished from April 2013. • Budgeting Loans and alignment replaced by payment of universal credits ‘on account’. • Community Care Grants and Crisis Loans devolved from April 2013 to local authorities. Council Tax • Abolished from April 2013 • Responsibility for eligibility, assessment and payment of council tax support to Local authorities • Must publish policies by December 2012. • No plans to prescribe how schemes should operate – except that central funding for it will be reduced by 10%, and support for pensioners will be set centrally. Strategic Solutions to Improve Performance & Vfm
www.phhsl.co.uk Overview of the Changes to come Housing benefit to become part of Universal Credit • For working age households (61+) and Pension Credit for pensioners • Online claims and electronic payments direct to claimants • October 2013 to April 2014 1/2m new claimants will receive Universal Credit instead of Jobseeker's Allowance, Employment Support Allowance, Housing Benefit, Working Tax Credit and Child Tax Credit. 1/2m existing claimants and their families will be transferred when their family circumstances change significantly, for instance if they get a job or have another child. • April 2014: 3.5m move to Universal Credit. • 2015 to 2017: 3m moved over, focusing on Housing Benefit claimants • No Housing Benefit for Under 25’s from 2015> ?? Strategic Solutions to Improve Performance & Vfm
www.phhsl.co.uk Overview of Impact on Incomes National • Institute of Fiscal Studies £12.8bn (£480 per household) through VAT etc in 2011-12 £3.9bn (£150) through other tax and benefit reforms in 11-12 £4.1bn (£160) less in 2012-13 £9.8bn (£370) less in 2013-14 £30.6bn less (£1,160 per household) over two years Largest losses as % of income in bottom half of income distribution • Human City Institute Research Strategic Solutions to Improve Performance & Vfm
www.phhsl.co.uk Overview of Impact on Incomes Local • Worklessness rate of 26% across the North East: ↑ Unemployment and ↓ Job Creation • High levels of disability claims • County Durham Estimated Impact 2012/13 Tax Credits £47m , DLA £31m ,Incapacity £25m, ESA £21m, Council Tax £5m Overall loss to local economy in 13-14 of £150m, rising thereafter • Underoccupation £30m plus across North East average of £676 ‘extra’ per household Strategic Solutions to Improve Performance & Vfm
www.phhsl.co.uk Impact on Housing Nationally • 670,000 working age underoccupiers • 530,000 (78%) under-occupying by just one bedroom • 400,000 (60%) are single people or couples with no children only eligible for 1 beds • 1 bed stock = only 21% of all RP stock, with only 60,000 1 bed relets per year • £488m per year shortfall in rent payments • Potential Extra 52m rent transactions per year • Increases in arrears , bad debts , tenancy turnover and void periods Locally • 50,000 working age underoccupiers: £30+m shortfall in rent payments • £0.5m DHP funding from DWP available : £1.25m potential total (may increase) • Few 1 bed properties – Coast and Country: 16 for the 2,500 affected? Strategic Solutions to Improve Performance & Vfm
www.phhsl.co.uk What should you be Doing? Make use of ‘Making it Fit’… & Search for ‘How to Survive Welfare Reform’ Top Tips 1. Get to Know your customers… and Keep them Informed 2. Develop a Strategic & Risk Based Approach 3. Develop a Strategic Approach to Underoccupation 4. Review & Change your Allocations Policies 5. Develop your Income/Financial Advice Services 6. Review your Asset Management Strategy 7. Review your Development Strategy 8. Develop your Approach to Tenancy Fraud 9. Focus on Digital & Economic Exclusion and, last but by far from least 10.Focus on Value for Money Strategic Solutions to Improve Performance & Vfm
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