Welfare Reform Timetable

hbnotes April 2011

Welfare Reform Timetable in brief

The governments public spending review in October 2010 announced an annual 7 billion in welfare cuts, this was on top of the annual 11 billion already set out in the governments emergency budget in June 2010 and the 3 billion already planned by the last Government a total of 21 billion. The Welfare Reform Bill has now been published that lays the foundations for many of these proposals - although it will need to pass through parliament before any of the changes can become reality. The list given below is a summary of the recent and forthcoming benefit changes, with dates where known- note that some of these proposals require parliamentary approval, and some of the dates/proposals may change. We will update this timetable regularly look out for the latest edition on the home page of the hbnotes website. The changes will impact hard on Social Housing and on lower income households. Cuts in Housing Benefit and other benefits / Tax Credits will reduce incomes whereas costs are going to increase; social housing will come under increased pressure as Local Housing Allowance cuts cause shortages and homelessness in the private rented sector. At the end of this document we have given our initial thoughts on the impact of the main proposals, and our suggestions on what you can say to your customers, but much of the detail is still unknown. And, we have produced a Survival Guide to help you minimise the impact of these changes on your tenants and your organisation please see the hbnotes website for more details.

October 2010
Help with Mortgage Interest - The standard interest rate used to calculate support for mortgage
interest payments was reduced and set at a level equal to the Bank of Englands published monthly Average Mortgage Rate. In October 2010, the rate dropped from 6.08% to 3.63% leaving many home owners with a shortfall in the help they receive towards their eligible mortgage interest payments. For information on who can get this help see the hbnotes website.

November 2010
Contribution conditions for JSA & ESA First contribution condition changes all new claimants
need to have paid national insurance contributions on relevant earnings at the lower earnings limit for at least 26 weeks to qualify for benefit, and will therefore need to have worked for at least 26 weeks in one of the last 2 complete tax years prior to their claim. This differs from the previous rules where people could qualify for either ESA or JSA having paid contributions on earnings for around 12 weeks work at the national minimum wage, or less than four weeks work at higher rate tax levels.

December 2010
Child Trust Funds No new funds set up, reduced payments to existing funds.

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January 2011
Education Maintenance Allowance - No new claims for EMA from 1st January 2011. *Update*
Some students already getting EMA will continue to receive it for the 2011/12 academic year those who started their course in 2009-10 will continue to receive the same payments until the end of their 2011/12 academic year. And those who started a course in September 2010 and currently qualify for the 30 a week payments, will from September 2011 get 20 a week until the end of the 2011/12 academic year. The government are replacing the 560m paid out in EMA by a 180m bursary scheme which will ensure that every child eligible for free school meals who chooses to stay on in education after GCSEs could be paid 800 a year.

Health in Pregnancy Grant Abolished. Help with Mortgage Interest Limit of help to 2 years for those on Jobseekers Allowance starts to
bite ie anyone who claimed JSA on or after 1st January 2009 and who has been receiving support with mortgage interest for 2 years whilst on JSA, will see the support ending. But temporary changes that were due to come to an end in January 2011 have been extended until January 2012, *Update* March 2011 budget has extended this help to January 2013. These include a reduced waiting period of 13 weeks before support is provided and an increase in the eligible mortgage capital limit to 200,000. For more information see the hbnotes website.

VAT Increased to 20%. Incapacity Benefit and Income Support (incap) Linking rules came to an end.

February 2011
Reassessment of existing Incapacity Benefit and Income Support (Incap) claimants for migration to Employment and Support Allowance starts - *Update* 1,000 assessments a
week to be made from 28th February 2011, with 7,000 from April and 11,000 a week from May. Claims will be dealt with on a clerical basis until the new software needed is put into place expected at the end of May 2011. This transfer process is expected to be completed by 2014. Since October 2010, it has been piloted in the Aberdeen and Burnley Benefit Delivery Centre areas where 28% of claimants are being found fit. Claimants found fit can appeal but many will need to claim IBJSA instead (as long as entitled) seeing a dramatic drop in their income and many may be left with periods of no income and gaps in Housing Benefit and Council Tax Benefit as they struggle to find their way through the claiming processes. Also, watch for under 25 year old non-dependants moving from IS to IR-ESA as a 7.40 (9.40 from April 2011) deduction will need to be applied. For more details please see the Welfare Reform pages of the hbnotes website.

March 2011
ESA Work Capability Assessment *Update* new Regulations come into force on 28th March
2011. The plan is to change the work capability assessment ie the medical test, to take account of fluctuating conditions and amending some of the descriptors/scores which, in the main, will make it harder to score points and therefore harder be found to have limited capability for work. The new ESA50 medical questionnaire is available to download from the directgov website. As soon as we know the new scoring system we will let you know keep an eye on the News pages of the hbnotes website.

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April 2011
Housing Benefit - Start of above inflation increases in non-dependant deductions - The
non-dep deduction levels applicable from April 2011 have been announced see table below. The aim is to reverse the fact that there has been no increase since 2001 so that by 2014 the nondependant deductions will have reached the levels they would be at had they been increased for all the years theyve remained frozen. It is anticipated that by 2014 they will be between 50%-90% higher than their current levels. This change affects all claimants with a non-dependant deduction and will affect the amount of HB entitlement when reassessed in April. For our guide and standard letters on minimising the impact of non-dependant deductions, and a flyer you can use to send to your tenants see the hbnotes website. 2010 rates 7.40 17.00 23.35 38.20 43.50 47.75 2011 rates 9.40 21.55 29.60 48.45 55.20 60.60

Housing Benefit- no new award of higher family premium where child under one - This is in
line with the removal of the baby element in Child Tax Credit for new children (see below), and means that many families with a child under one will see a drop in their HB entitlement from April.

Discretionary Housing Payments *Update* - the 2011/12 figures have now been released see
the hbnotes website. The DHP budget has been increased by 10 million with this extra targeted to those areas that will need it the most ie those most affected by the changes to LHA outlined below. It is expected that this increase in budget will not meet the increased demand for DHPs and fewer DHP awards will be made to social housing tenants. For information on who can claim a DHP see the hbnotes website.

Local Housing Allowance end to 15 excess - The 15 weekly excess provision currently
payable within the Local Housing Allowance rules- where a claimants rent is below the appropriate LHA level- will be removed. This will affect all new claims for LHA from 1st April 2011, ie where the LHA is above their contractual rent, the maximum HB payable will be their contractual rent. It will affect existing LHA claimants on their LHA anniversary after 1st April 2011, or may be sooner if they move or if their LHA needs to be reassessed due to a change in the size of their household that affects the size of the dwelling they are entitled to. The transitional protection available for some of the other LHA changes is not applicable to the 15 excess. Over 43% of LHA claimants currently receive an excess, and will therefore see a drop in their income.

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April 2011 continued

Local Housing Allowance caps imposed & 5 bed rate removed. - LHA levels will be capped
and restricted to the 4 bedroom rate even where families need larger accommodation due to their size. A new upper limit will be introduced for each property size, with upper limits set at: o 250 a week for a 1 bedroom property o 290 a week for a 2 bedroom property o 340 a week for a 3 bedroom property o 400 a week for a 4 bedroom property or larger. These caps and restriction to 4 bed rate affects all new claims from all private sector claimants of LHA on or after 1st April 2011. For most existing claimants the government have added in some protection - it is expected that these new restrictions will take effect 9 months after the claimants LHA anniversary date following 1st April 2011. This nine month transitional protection will apply to existing claimants unless: they move; become entitled to a smaller size of dwelling; or they become entitled to a larger size of dwelling and the new LHA rate is higher than their protected rate. This does not impact on social housing tenants entitlement to HB.

Local Housing Allowance set at 30th percentile - Brought forward from October 2011 for all
new claims, with protection for existing claimants. The Local Housing Allowance will be set at the 30th percentile of rents in each Broad Rental Market Area, rather than the median as currently. This means that only the cheapest 30% of privately rented properties in a Broad Market Rental Area will be fully eligible for HB. This therefore reduces the amount of private rented stock that can be afforded by people on HB and likely to trap claimants in properties they cannot afford to live in. This will affect all new claims from 1st April 2011. For most existing claimants it is expected that this will take effect 9 months after their next LHA anniversary date following 1st April 2011. This nine month transitional protection will apply to existing claimants unless: they move; become entitled to a smaller size of dwelling; or become entitled to a larger size of dwelling and the new LHA rate is higher than their protected rate. This does not impact on social housing tenants entitlement to HB.

Local Housing Allowance HB direct to landlord The government have agreed this
concession. For LHA, the default position is that the award of HB is paid direct to the claimant, with limited circumstances in which it can be paid direct to the landlord. From 1st April 2011 the HB Office will have the discretion to make payments of HB directly to the private landlord where they consider it will assist the claimant in securing or retaining a tenancy.

Local Housing Allowance extra room for a non-resident carer allowed in size criteria *Update* - From April 2011, the property size criteria for LHA will be adjusted to provide for an additional bedroom for a non-resident carer where: a disabled claimant or their partner on LHA has an established need for overnight care ie they are on Attendance Allowance; or middle or high rate Disability Living Allowance; or their need has been confirmed by social services (it does not apply to other members of the household); AND this care is being provided by a non-resident carer; AND their property has an additional bedroom that is used specifically for this purpose. Unfortunately if they already need a four bedroom house due to their family size then they will not benefit from this new provision due to the four bedroom cap. Affects all relevant claims from 1st April 2011 those who believe their size criteria should be amended to reflect this rule should contact their HB Office as soon as possible. Where the HB Office become aware after 1st April 2011 that a claimant is entitled to a higher award of HB under this provision they will be entitled to any arrears that are due, even if their award is not revised until a later date. www.hbnotes.co.uk Page 5

April 2011 continued

Tax Credits - Changes to the way Tax Credits are assessed, reducing the overall award/ or lower
than expected increase in Tax Credits to most claimants. Both Child and Working Tax Credit: 1st and 2nd taper rate at which awards are reduced when the claimant has excess income will be increased from 39% to 41% reducing the overall award for claimants not on their maximum Tax Credits. The income disregard when reconciling claims at the end of the year is reduced from 25,000 to 10,000 ie in year increases in income of over 10,000 will impact on the award of Tax Credit. As awards due to increases in income are not normally reassessed until the end of the year, this change is likely to increase the likelihood of overpayments, especially for those starting work at the beginning of the tax year after a long period on benefits. Child Tax Credit: Higher earners will stop getting Child Tax Credit where earnings/joint earnings reach 40,000+gross pa (reduced from 50,000) Removal of baby element reducing Tax Credit award. The child element of Child Tax Credit will increase by 180 per year above indexation. Working Tax Credit: The basic and 30 hour elements will be frozen for 3 years. Child care costs - the percentage of child care costs covered by the childcare element will reduce from 80% to 70% resulting in a drop in Tax Credit income for many families. A new route to claiming WTC for those aged 60 plus is introduced someone can claim if working 16 hours a week (as opposed to 30 hours currently). Award based on income. *Update* - If working between 16 and 30 hours a week, then they may get some WTC if their gross annual taxable income is less than 11,100 (for single people), or less than 15,850 (for couples).

Sure Start Maternity Grant For first child only. Pension Credit - The maximum amount of Savings Credit will be frozen for 4 years. State Retirement Pension - Increase by highest of earnings, prices or 2.5%. Child Benefit To be frozen for 3 years. Disability Living Allowance High rate mobility component extended to people who have severe
sight problems or who are blind. Please see the hbnotes website for a factsheet produced by the RNIB regarding who can qualify under these new rules.

Benefit uprating - Benefit uprating each April has previously been linked to the inflation rate in
the preceding September as measured by the Retail Prices Index. However from April 2011, most benefit levels will instead be set by reference to the Consumer Prices Index which in September 2010 stood at 3.1 per cent, whereas the Retail Prices Index is running at 4.6 per cent. The government have confirmed that this is to be a permanent change. The new rates are available on the hbnotes website.

Tribunal Service - The Ministry of Justice has confirmed that Her Majesty's Court Service and the
Tribunals Service will be integrated into a new, single organisation. www.hbnotes.co.uk Page 6

April 2011 continued

Personal tax allowance - increase by 1,000 to 7,475. Changes to National Insurance contributions from 2011 - *Update* The government has
announced that the employee, employer and self-employed rates of National Insurance contributions (NICs) will increase by 0.5 per cent from April 2011 in addition to the 0.5 per cent increase announced in 2008. The level at which people start to pay NICs will increase in April 2011 by 570 above the level previously announced. Those paying the standard employee rate and earning under 20,000 will pay less NICs overall as a result of these changes.

Equalisation of State Pension Age / Increase in Pension Credit Age Started in 2010 and
continues in 2011.

October 2011
Lone parents and Income Support Lone parents will be required to be available for work when
their youngest child turns 5, ie they need to claim Jobseekers Allowance, unless they are claiming Income Support through a different route ie as a carer or already assessed as being unfit for work pre Oct 2008.

During 2012
*Update* - Personal tax allowance - increase by 630 to 8,105 as announced in March 2011
Budget.

Housing Benefit - Above inflation increases in non-dependant deductions continues. Local Housing Allowance single room rent extended to under 35s - *Update* To take
effect from January 2012.The rule whereby single claimants under 25 years old who live alone & in private rented housing have their eligible rent restricted for HB purposes to the LHA rate for a room in a shared house, is extended to single claimants under 35. The exception ie those entitled to the severe disability premium (ie on DLA care component middle or high rate and no-one gets paid Carers Allowance for looking after them), will also be extended to this age group. Does not impact on social housing tenants entitlement to HB.

Discretionary Housing Payments Budget to be increased by a further 40 million and targeted

to those areas that will need it the most. It is expected that this increase will not meet the demand.

Tax Credits - Changes to the way Tax Credits are assessed reducing the overall award of Tax Credits
to all claimants except those getting their maximum entitlement. Both Child and Working Tax Credit: Introduce an income disregard of 2,500 for income falls meaning many families will not see an increase in their Tax Credit award if their income drops less than 2,500 gross pa within the claiming period ie the current tax year. And if their income drops by more than 2,500 during the year, the first 2,500 is disregarded, meaning that for example a person whose income dropped from 20,000 to 15,000 will have their Tax Credit reassessed on income of 17,500 for that year.

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And reduce backdating of new claims and certain change in circumstances from three months to one month.

Child Tax Credit: The child element will increase by 110 above indexation. Removal of upper threshold of 40,000 meaning that entitlement starts to taper off at lower levels of income for many families. Therefore, rather than there being an entitlement to 545 for the year available to all families whose earnings are up to 40,000 gross pa, as soon as the familys income is high enough to have reduced the child element to nil, any further increase in income starts reducing the 545 family element. This will mean many moderate to high earners getting just the 545 payment at the moment will lose Child Tax Credit altogether. Working Tax Credit: No longer payable to couples with children working 16 hours or more a week- they will have to work at least 24 hours a week between them, with one working at least 16 hours; or have one working 24 hours or more a week. Removal of the 50 plus route to claiming.

Contributory Employment and Support Allowance Payments will be limited to a maximum of

one year for those on the work-related component. Claimants can move onto / will continue on Income-Related ESA if their household income is low enough. The limit will be imposed retrospectively ie anyone who has already been on work related Contributory ESA for 12 months by April 2012 will have their payments stopped immediately. For people transferring from Incapacity Benefit to work related Contributory ESA, the twelve months will start from the date of transfer. *Update* Contributory ESA no longer available to people incapacitated in youth.

Disability Living Allowance - *Update* This proposal has now been scrapped confirmed in
March 2011 budget. People in residential care homes will lose the mobility component of their DLA as well as, as now, the care component. It does not affect people in sheltered housing.

Equalisation of State Pension Age / Increase in Pension Credit Age Continues.

During 2013
Housing Benefit - Above inflation increases in non-dependant deductions continues. Rent restrictions in the social housing sector Proposed that Housing Benefit for working age
social rented sector customers may be restricted for those who are occupying a larger property than their household size and structure would warrant.

Reduction in HB for long term jobseekers *Update* This proposal has now been scrapped. It
had been proposed that Housing Benefit customers who are claiming Jobseekers Allowance would only receive their full Housing Benefit award for a period of 12 months. After that period, their benefit would have be reduced by 10%, and they would have continued to have been ineligible for their full Housing Benefit rate until they had left the benefit system and been in work for a period. This would have affected tenants in both the private and social housing sectors, including those forced off Incapacity Benefit / ESA onto Jobseekers, and lone parents whose youngest child was age 5 or over.

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Local Housing Allowance - Rates will be fixed and then uprated annually on the basis of the
Consumer Prices Index, rather than as present monthly and on the basis of local rents.

During 2013 continued

Council Tax Benefit *Update* - To be abolished and replaced by a rebate scheme with a 10%
reduction in expenditure. The Welfare Reform Bill will introduce enabling powers to abolish Council Tax Benefit. It is the governments intention to replace CTB by a local rebate scheme administered by Local Authorities, and it is assumed that this will allow Local Authorities to tailor the scheme to suit their own priorities.

Child Benefit - will not be paid to families with a higher rate taxpayer (currently earning 43,875
gross pa). Note that a couple both earning under 43,875 will keep Child Benefit even if their joint earnings are well over 43,875.

Tax Credits Further reduction in the income disregard used to reconcile claims at year end from
10,000 to 5,000, causing Tax Credit overpayments for many and especially those who have started work after a long period on benefits.

Disability Living Allowance To be replaced by a new benefit called Personal Independence

Payment (PIP). This is similar in many ways to DLA, but with the aim of reducing the bill by 20% by 2017 (ie 2.1 billion a year). PIP will be for all new claimants, and all existing DLA working-age claimants will be reassessed. Many claimants (Disability Alliance estimate 650,000 claimants) will see a drop in their entitlement or be taken off Disability Living Allowance altogether and will see a dramatic drop in income as they also lose associated increases in other benefits ie in Income Related ESA, Housing Benefit and Tax Credits. For more information see the hbnotes website.

Benefits cap - Proposed that no out of work family will receive more than around 500 per week in
total benefits; for single adult non-workers, no more than 350 per week. Families receiving Working Tax Credit, and people getting War Widows' Pensions or Disability Living Allowance, will be exempt. Because this figure includes Housing Benefit this is most likely to affect those in higher rented properties / more expensive areas, as well as those with large families. Those tenants in supported housing where the rents tend to be higher could be affected if they are not on DLA. The cap will be administered by HB Offices by reducing Housing Benefit payments where necessary. For more info see page 15, or the hbnotes website.

Universal Credit Proposed new benefit to replace all means tested benefits. It is expected that, if
parliamentary approval is given it will be introduced for all new claims in Autumn 2013. The government has outlined its proposals in brief in a paper Universal Credit: welfare that works. It suggests that Universal Credit will replace Housing Benefit, Income Support, Income-Related Jobseekers Allowance, Income-Based Employment and Support Allowance, and Tax Credits. It is expected that existing claimants of these benefits when Universal Credit is introduced will slowly be migrated over to Universal Credit by 2017. For more info see page 16, or the hbnotes website.

Social Fund - *Update* - It is proposed that from 2013 the Discretionary Social Fund (ie Community
Care Grants, Budgeting Loans and Crisis Loans) will be abolished. Funding for CCGs and CLs will be transferred to Local Authorities who will be given the power to re-design the emergency provision that is provided to vulnerable people, but the money they are given will not be ringfenced for this

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purpose. The government have invited ideas and comments on how this might work feedback by 15th April 2011. Please see the hbnotes website for more info and link to the DWPs paper.

Equalisation of State Pension Age / Increase in Pension Credit Age Continues.

During 2016
Equalisation of pension age - The equalisation of male and female pension ages will speed up so
that they will be the same ie 65 by November 2018, and increase to 66 by 2020.

During 2017
Housing Benefit may end as Universal Credit takes over for working age claimants, and it is
anticipated that the Pension Service will take over assessing HB for people of pension credit age.

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What it means to social housing key areas:

2010
Reduction in help with mortgage interest payments.

2011
Migration of IB and IS(Incap) claimants onto ESA Non-dependant charges steep increases. Tax Credits families will see a drop in their income. LHA reductions families move away from areas of high rents and many private rented tenants become trapped in housing they cannot afford increased demand for social housing. DHP increased demand from private sector will mean less DHP money available for social housing sector. Changes that effectively see a drop in income for many tenants increase in VAT, frozen benefits, uprating below RPI, sharp increases to non-dependant deductions, changes to Tax Credits etc

2012
Non-dependant charges steep increases. LHA changes affect under 35s who become trapped in housing they cannot afford increased demand for social housing. Tax Credits some people taken off Tax Credits, increase in number of overpayments.

2013
Non-dependant charges steep increases. HB restrictions for social housing where working age tenant under occupying property. Benefits cap impact on large families and tenants living in properties with a high rent including those living supported housing schemes not on DLA. Tax Credits families will see a drop in their income, increase in number of overpayments. Universal Credit starts for new claims currently unknown how help with rent will work / whether payments direct to landlord will be affected. Pension Credit to include housing costs including rent. Replacement of Disability Living Allowance many tenants will see a dramatic drop in their income due to tighter claiming rules. Council Tax funding for Council Tax Benefit reduced by 10% and provision localised so may reduce the financial help available to many tenants. Discretionary Social Fund likely reduction in the amount of money available.

2014
Tenants begin to be moved on Universal Credit. Housing Benefit will be with us until 2017- possibly even longer ie for people living in temporary or supported housing. But due to the likely introduction of complicated changes and transitional arrangements, and the forced reduction in council expenditure, issues such as backlogs and mistakes are likely to start to increase over the next 12 months! According to the DWP an estimated 99 per cent of Local Housing Allowance cases ie private sector tenants will be affected by the forthcoming changes to the Local Housing Allowance, with an average decrease in benefit of 12 per week. This will put additional pressure on demand for social housing and the Discretionary Housing Payment budget.

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Social Housing Providers - What can we do?

With reductions in benefit amounts and increases in everyday expenses, it has never been so important to ensure that your tenants are claiming all the benefits that they are entitled to, and are aware of what the future holds for them. It is estimated that over 12 billion goes under claimed in benefits every year through ignorance and the complexities of the system. hbnotes offers informative, practical and reasonably priced training to ensure that your staff offer appropriate advice and reassurance to your tenants, and to make sure tenants are making the most of their money - please contact us for more information. Courses that would be particularly relevant are Maximising Income to reduce rent arrears, Sustaining tenancies financial inclusion and basic debt advice, Welfare Reform for Housing Workers. And of course, it has never been so important to have access to accurate and up to date information to ensure your tenants are receiving all the Housing Benefit they are entitled to, and regular updates on the Welfare Reform proposals. We will keep our hbnotes members up to date on the News section of our website and with our monthly newsletters. Below we have listed the key areas of welfare reform that will impact on social housing providers and their tenants and made some suggestions for action. We will, of course, keep our users up to date with these changes and any new ideas or tools as they become available.

Housing Benefit - Start of above inflation increases in non-dependant deductions

What we can do highlight those tenants who currently have a non-dependant deduction, and now that the new rates are known, write to them informing them of change. Remind them that non-dep is responsible for paying the deduction to the tenant, but also offer/signpost for budgeting advice as often tenants are left paying the shortfall themselves. Ensure that existing rates are correct and help the tenant challenge decisions such as still making a charge where the non-dep has left because there is no forwarding address, making a higher deduction where the non-dep has no income see our useful guide and standard letters on the hbnotes website. For those who will suffer hardship because of the increase you can advise them to claim DHP, but note demand for DHPs will increase from April 2011 due to changes to Local Housing Allowance. Minimising impact no deduction where tenant/partner on DLA care / AA; where a non-dependant has an increase in their income they may swap deduction bands the increase in charge must be deferred for 26 weeks where the tenant or their partner is aged 65 or over; no deduction should be made for temporary stays; if working less than 16 hours a week then regardless of pay should be lower non-dep charge. For information on how to minimise non-dependant deductions please see the hbnotes website. Caution For those non-deps working 16 hours or more we may see HB Offices adding together all of a non-deps income ie to include Tax Credit and some other sources of income that are normally disregarded for a claimant but not a non-dependant such as Child Benefit. What we can tell people If you have a non-dependant living with you and your Housing Benefit entitlement is currently being reduced then from April 2011 the amount the government expects them to give you towards your rent is increasing ie you will need to be paying you more towards your rent and give the new rates. www.hbnotes.co.uk Page 12

Reassessment of existing Incapacity Benefit and Income Support (Incap) claimants for migration to Employment and Support Allowance.
What we can do highlight those tenants currently on IB / IS(incap) and explain what is going to happen. Explain its very important that they attend interviews / complete forms / attend medical otherwise their claim for IB / IS(incap) will end. Advise them to get help completing the Limited Capacity for Work form, and where possible take someone with them to the medical who can help them explain their limitations. If found fit either claim JSA or appeal- if appeal as long as they provide sick notes they should stay on ESA until appeal heard. Those migrated onto ESA should be no worse off - they should seek advice if they think they are. Those having to claim JSA will see a dramatic drop in their income by 25 a week or more and therefore may need budgeting help. Also, watch for under 25 year old non-dependants moving from IS to IR-ESA as a 7.40 deduction will need to be applied.

Drops in Tax Credit Income

Various changes are being made to the Tax Credit system that will mean that some families will see a drop in their Tax Credit income, and many others a lower than expected increase. For those already on Housing Benefit, this drop should be taken into account so they should see an increase in their HB entitlement. For those families not on HB, the drop / little increase may mean that they are now entitled to some HB and therefore able to claim. Although any increase in, or new award of, Housing Benefit will not match the loss of Tax Credits. What we can do Highlight tenants already on Tax Credits / likely to be entitled to Tax Credits and send a letter. What we can tell people- Due to changes in the way Tax Credits are calculated you may find your Tax Credits will go down, or that you wont get as much as you were expecting. Do make sure you notify the Housing Benefit office of any change in your Tax Credits (and of any other change in your circumstances) so that you dont miss out on extra Housing Benefit / Council Tax Benefit. And if you are not currently getting Housing Benefit or Council Tax Benefit and your circumstances / income have changed, then apply you might now be entitled to some- you have nothing to lose by trying!

Reductions in Local Housing Allowance

Although this will not affect social housing tenants directly, social housing providers are likely to see an increase in demand for their properties from tenants living in the private rented sector who can no longer afford to live there. Many of these applicants will have rent arrears arising not through deliberate non-payment or mismanagement of finances, but purely because the change in LHA rules means that the help they receive with paying their rent no longer gives them enough to do so, meaning they cannot afford to meet the shortfall themselves on their low incomes. What we can do- In allocating properties, try to find out the reasons applicants may be in arrears and make allowances accordingly; give benefits advice/ do a benefits check/ calculate HB entitlement for all new tenants. Advise applicants whose LHA does not meet their rent to apply for a Discretionary Housing Payment.

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Discretionary Housing Payments Although the government is increasing their contribution to DHPs over the next few years, this
increase will fall short of the increase in need from the private rented sector due to the changes to the Local Housing Allowance rules. This will result in less money being available to the social housing sector. What we can do- Continue to assist tenants in need to apply for these; liaise with HB Office if there appears to be a change in policy, ie cases are turned down that would previously have been accepted.

Rent Restrictions in Social Housing

This proposal still needs to pass through parliament, and is not planned to take effect until 2013. What we can do- It would be prudent not to let properties in a way that means they are under occupied by tenants of working age, and perhaps to start making a list of tenants that could be affected by this proposal should it go ahead. These tenants could then be contacted should the need arise in the future to offer them assistance with claiming a DHP, or even re-housing into a smaller property. Lobby your local MP about your concerns that the problems this proposal will cause. What we can tell people- reassure people that this change is not due to take place until 2013 and still needs parliamentary approval.

Disability Living Allowance

It is proposed that DLA is to be replaced by a new benefit called Personal Independence Payment (PIP) from 2013, with existing claimants being moved over on to this new system, which will of course mean lower payments. What we can do - It is too early to take any action to minimise the impact of this proposal at this stage, however once approval is given and the details known of how the new medical assessment will work, staff will need training on it so that the appropriate advice is given to tenants regarding the new medical assessment, and understand what the loss of DLA means to someones income and the impact it will have on any Housing Benefit entitlement. What we can tell people- reassure people that this change is not due to take place until 2013 and still needs parliamentary approval.

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Benefits cap
The government are proposing that no out of work family will receive more in benefits than the average earnings of a working family ie around 500 per week in total benefits; and for single adult non-workers, no more than 350 per week. Families receiving Working Tax Credit, and people getting War Widows' Pensions or Disability Living Allowance will be exempt. It will be the HB Offices who will be imposing the cap by reducing the amount of HB payable for those claimants whose benefit income would exceed the cap. They will be looking at the total level of benefits in payment ie not just the means tested ones, so will include Child Benefit, Contribution Based JSA, Contributory ESA, Carers Allowance, Industrial Injuries Disablement Allowance etc. The DWPs own impact assessment has estimated that it will affect 50,000 households, and the average loss of HB will be 93.00 a week. It is most likely to affect those in higher rented properties / more expensive areas, as well as those with large families. Those tenants in supported housing where the rents tend to be higher could be affected if they are not on DLA. Where someones Housing Benefit entitlement is reduced due to this cap, they will need to absorb this loss in their overall budget to ensure that their rent is paid. Tenants affected by this drop in income may require budgeting advice. Landlords may struggle to collect the rent that is due. If these households struggle to pay their rent they will face eviction meaning increased costs (and loss of revenue) for the landlord, and increased costs to the LA as families present themselves as homeless. Private landlords may become reluctant to re-house larger families, and there will no doubt be an increase in demand for larger social housing properties where the rents are cheaper. But even large families living in the social housing sector will be affected. Based on current benefit levels, a couple on Jobseekers Allowance who have 4 dependant children will have their HB reduced if their eligible rent is 150 a week or more; a couple on Jobseekers Allowance with 5 dependant children will have their HB reduced if their eligible rent is 95 a week or more. If the couple are on Employment and Support Allowance, the levels of rent would be 125 (4 children) and 70 (5 children) a week respectively (although they should look to see if they can claim DLA and therefore be exempt from the cap!) What we can do - It is too early to take any action to minimise the impact of this proposal at this stage. However once approval is given and the details known of how the cap will work it would be prudent to start making a list of tenants that this proposal may affect, and look at a tenants circumstances to offer advice about how the benefits cap will affect them if applicable, and look to see if a claim for DLA can be made that would exempt them from the cap. With regards to offering larger families accommodation, issues of affordability are a difficult area if someone cant afford a social housing rent, then what can they afford? Again it would be sensible to ensure that all new tenants (or their children) who can claim DLA are claiming it, and therefore be exempt from the cap. Lobby your local MP about your concerns that the problems this proposal will cause. What we can tell people- reassure people that this change is not due to take place until 2013 and still needs parliamentary approval.

www.hbnotes.co.uk

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Universal Credit
This is a proposed new benefit to replace all means tested benefits. It is expected that, if parliamentary approval is given, autumn 2013 will see the introduction of the Universal Credit for all new claims. As the proposals still need to pass through parliament little of the detail is known. But it is expected that Universal Credit will replace Housing Benefit, Income Support, Income-Related Jobseekers Allowance, Income-Based Employment and Support Allowance, and Tax Credits. It is expected that existing claimants of these benefits when Universal Credit is introduced will slowly be migrated over to Universal Credit by 2017. A dual system of benefits will result with new claims being for the Universal Credit and existing claimants staying on existing benefits including Housing Benefit, albeit for some claimants with a benefits cap. A confusing time for all! What we can do - It is too early to take any action to minimise the impact of this proposal at this stage, however once approval is given and the details known of how the Universal Credit will work staff will need training on it so that the appropriate advice is given to tenants regarding what they claim and what contribution towards their rent they are likely to have to make. What we can tell people- reassure people that this change is not due to take place until 2013 and still needs parliamentary approval.

www.hbnotes.co.uk

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