Claire Astbury, Lead ManagerNational Housing Federation

Welfare reform: Universal credit and other changes

Welfare reform

• Size criteria• Universal Credit• Overall benefit cap• Localisation • Looking Forward

Social sec-tor size cri-

teria (£490m)

Up-rating LHA by in-

flation – not actual rents

(£390m)Cut LHA rate to cheapest

third (£425m)

Rise in non-dependant

charges (£340m)

Household benefit cap

(£270m)

Limit LHA for under-

35s (£215m)

LHA caps (£65m)

Housing Benefit cuts by 2014-15

Total Housing Benefit cuts:£2.2bn

Discretionary Housing Payments

Discretionary Housing Payments

HB cuts HB help

£2.2bn

£125m

HB cuts vs. HB help 2014-15Total DHP available:

2010-11: £20m2011-12: £30m2012-13: £60m2013-14: £155m2014-15: £125m

Measuring the impact on tenants and landlords…

Federation impact assessment

What housing associations are doing to prepare…

• Informing tenants• Investment in financial and digital inclusion• Helping tenants to downsize• Encouraging tenants to take lodgers?• Re-designation of properties?• Long-term: considering fixed-term tenancies and

reviewing development plans

Social sector size criteria

Size criteria impact

14% cut for one ‘spare’ bedroom25% for two or more ‘spares’£14 average weekly loss660,000 claimants affected across GB63% (420,000) are disabled200,000 on Disability Living Allowance100,000 disabled and in adapted properties

Size criteria – exemptions?

Pensioners?

Foster carers?

People who need round-the-clock care?

People with severely disabled children?

Armed forces families?

Options for avoiding the size criteria

Downsize? (transfer, mutual exchange, move to private rented sector)

Pay the shortfall?

Lodger?

Included in UC:• Income-based Jobseeker’s

Allowance• Income-related Employment and

Support Allowance• Income Support (including Support

for Mortgage Interest)• Child Tax Credits• Working Tax Credits• Housing Benefit

Excluded from UC:• Council Tax support• Disability Living Allowance• Contributory Benefits

(although earnings rules aligned)

• State Pension• Child Benefit• Pension Credit• Carer’s Allowance

Universal Credit

• Single payment• Monthly payment• Direct to claimant• Online • Supporting work• Conditions and sanctions

Universal Credit – culture change

Direct payments to tenants

Rent currently not a major problem – but in future?

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Rent

Replacing things have been stolen

Medical or dental treatment

Repaying credit or loan agreements

Petrol/Transport

Food

Electricity/Gas

Replacing/repairing equipment

Shoes/Clothing

Essential major purchases

Entertainment, days out or holidays

Christmas or birthday presents

% of social tenants find it difficult to afford:

Direct Payment Pilots

• Six Pilot Schemes – 6220 tenants volunteered• First six months, arrears doubled overall but

wide range of success in collecting rent due• One scheme in Wales, half of those falling into

arrears had never been behind on rent before• 316 had payments revert back to landlord

Household benefit cap

Benefit Cap impact

£500 per week cap 56,000 households affected50% will contain a disabled person46% of those affected are in social housing49% of those affected are in London£93 per week average loss

What’s left for rent?

Children Children

Lone Parent plus… Couple plus…

Typical benefits entitlement excluding housing costs

Maximum available for housing costs within the cap

Examples only – actual benefits receipt will depend on household circumstances

Options for escaping the cap

Work? Move?

Exempt Accomodation

• Lord Freud, April 2013

Uncertainty for supported housing projects

Localisation

A reminder of timings

• Already happened:– LHA changes, size criteria, Benefit cap starts,

Disability benefits start changing, Council Tax support replaces Council Tax Benefit, Social Fund localised

• From July– Benefit Cap rollout

• From October– Universal Credit starts

Impact of welfare reform on tenants

• Tenants know little about changes• Many tenants will be unable to afford rent• Arrears expected to rise by 51%• Evictions expected to increase• Families affected more than single people• Need to be on-line and have access to the

right financial products

Implications for housing providers

Implications for housing providers

Implications for housing providers

• Collecting rent/portions of rent for the first time• Supporting tenants with employment, advice,

training, moves and financial inclusion• Implications for allocations and exposure to

benefits• Need for co-operation for tenant moves and

support• New types of homes required• Concern about supported accommodation and

temporary accommodation/homelessness work

Implications for local authorities

• Administering and assessing Discretionary Housing Payments

• Collecting small amounts of Council Tax• Homelessness likely to increase• Demand for smaller homes – implications for

planning and SHMA• Advice and support• Commissioning issues re supported housing• Councillors mailbag

Contact

Claire AstburyNational Housing Federation

07788 148590claire.astbury@housing.org.uk

Further information: www.housing.org.uk/welfare Join our LinkedIn Group