welfare reform FAQ
The housing costs of “supported exempt accommodation” will sit outside Universal Credit. Following your enquiries, Sitra developed a flowchart and a briefing that aimed at guiding members through what being exempt/not exempt means for your organisation and a FAQ to provide further guidance and prepare you for the upcoming changes.
Am I exempt accommodation?
Our flowchart and briefing will enable you to find out whether you are exempt accommodation or not. If you are still unclear after having read the documents online and are a member of Sitra, one of our policy experts will answer your queries.
What are the benefits of being exempt?
The housing costs for your supported housing which is exempt will sit outside of Universal Credit. Residents of supported exempt accommodation will continue to claim their housing costs from local authority Housing Benefit departments for the time being even if their other benefits have been transferred to Universal Credit. From April 2013, local authority Housing Benefit departments will be expected by the Government to record every Housing Benefit case they have treated as supported exempt accommodation in the Housing Benefit Extract they submit to Central Government from their Housing Benefit database.
In the short term for supported exempt accommodation at least there should be:
• No change to the amount of Housing Benefit paid to cover rent and service charges or to the arrangement to pay benefit direct to the landlord
• This accommodation will also be exempt from the social housing size criteria (the “bedroom tax”) when this is introduced in April 2013, from the household benefit cap which is also introduced in April 2013, and from the new rules on temporary accommodation.
What will happen to exempt accommodations in 2017 when the Housing Benefit departments are abolished?
All Housing Benefit departments are meant to have closed down by the end of October 2017. By then at the very latest a new system is meant to be in place to deal with the rents of supported exempt accommodation.
• The principles of a new system for how the housing costs of exempt accommodation will be provided have not yet been drafted;
• It is likely to be a ‘localised’ system, which might mean English local authorities can make their own rules (as with Council Tax and the Social Fund) – or it might mean that there will be a national allocation system devised, which is then provided directly to authorities. There is no sense as to whether this might be a ring fenced, capped or open ended funding; whether it would be a permanent or temporary arrangement; whether the money would be uprated or reduced in future years;
• For individuals within services, it could for the first time take away individual entitlement to housing costs through the benefit system. There might not be transitional protection so these individuals might suddenly lose the roof over their heads if the responsible local authority decided not to cover their rent.
It is not possible today to ascertain what would be the impact of the abolishment of the Housing Benefit departments on exempt accommodations. Sitra will make any information available in the public domain as we have access to it, however in the meantime do talk to your local authorities about this issue, what are their views on the levels of risk, what are their concerns? Creating dialogue on these issues as early as possible will help you prepare for 2017.
How are the 2013 Universal Credit Regulations affecting current rules on service charges?
The Department for Work and Pensions launched a brief consultation on 21 December on the Universal Credit service charges guidance. The rules apply only to Universal Credit cases and Housing Benefit rules won’t change.
When any tenant is claiming Universal Credit their landlord is supposed to give them a figure for the amount of their service charges which are Universal Credit eligible so they can give this figure to the DWP. Hence landlords will need to have these figures ready for their 2013/14 service charges without losing the ability to work out a different figure for tenants still on Housing Benefit.
The DWP has taken a softer line than threatened over the expression “intensive housing management” which it had been feared would be listed as an ineligible item. Instead landlords are expected to find more “reasonable and transparent” ways of describing charges currently labelled in this way (para. 22).
The DWP refers several times to a process of “independent consideration” to settle disputes but it does not specify who is going to carry out this task, nor whether there will be a right of appeal.
What is the sector doing on the issue?
In relation to how are these concerns being confronted by the sector and bodies like ourselves – these are the activities we are either involved in or know that are ongoing:
• Sizing the pot exercise – this is happening at two levels – one where Housing Benefit departments are being required by government to measure how much accommodation they are determining as exempt in their annual return form April 2013 onwards. Bodies like ourselves, the National Housing Federation (NHF) or the Homeless Link are working with their members to determine how much of their supported housing is determined by themselves as exempt. What can you do about it? Make sure you respond to surveys and questionnaires that are sent out.
• Department of Communities and Local Governments (DCLG) – Sitra and others are in ongoing discussion with DCLG about the implications of this decision on the sector.
• Department of Work and Pension – Sitra and a range of UK wide bodies met with Lord Freud earlier last year, following on from the consultation on exempt accommodation. The output of that meeting can be seen here.
• Umbrella body activity – Sitra, Homeless Link, NHF, Women’s Aid and others are working together around this area. There is a focus on what the core principles of a localised system might look like. Women’s Aid remains concerned that not all refuge services would be covered by the current definition of ‘exempt accommodation’ – often because they provide support under contract to their local authority rather than on behalf of the landlord – you can sign their petition here
What is the ongoing viability of agencies in non-exempt accommodation?
There have been a number of areas that we have been waiting for to determine the full impact of this decision, and as yet, not all the pieces are in place.
The first is in relation to the service charges – and the DWP issued a consultation on service charges just before the end of last year. In contrast to Housing Benefit, Universal Credit is likely to have an exhaustive list of eligible service charges and the onus will be on providers to show as much as possible of their service charges match that list of eligible items. In addition, we are still waiting for a definition of vulnerability from the DWP, which will determine how possible it is for landlords to request the rent to be paid directly to them rather than to go to the tenant through Universal Credit. It is possible that this definition will be broad enough to incorporate all tenants –in supported housing not deemed to be exempt.
It is also unclear how local authorities will treat the rent levels of non-exempt accommodation before tenants transfer to Universal Credit – and whether they will be more likely to restrict benefit than in the past when they may not have been so aware which supported housing was and was not exempt. In many authorities, prior to this decision being made, there have been significant challenges to some rent and service level charges.