Benefits

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Benefits (Welfare Reform)

Major changes to the benefits system have come into force in the last few years, including the Benefit Cap, the Bedroom Tax and the roll out of Universal Credit.

There may be changes to your eligibility to your benefits (known as Welfare Reform) please read on for details. If you are affected by the Welfare Reforms and experiencing financial difficulties in managing your rent accounts, please contact the Income Team.

We will sign post you to the relevant agencies who can help you with budgeting skills and provide you with money advice. The Income team can also support you with applying for the Discretionary Housing Payment (DHP). This is an extra payment to help people pay their rent. DHP is paid to people receiving Housing Benefit or the housing costs element of Universal Credit who need more help with their housing costs. DHP is paid in addition to your Housing Benefit or Universal Credit entitlement.

We do advise that there is no guarantee that your DHP application will be successful, but if you are allowed any DHP, this will only be a temporary fix to your financial problem and will not continue for the long term. Once the DHP payments do stop, you are responsible for making the payments.

We are also working in partnership with the Department of Work and Pension (DWP) to support customers with finding employment.
If you require financial advice, please click here. For more information on Benefits please click here.

Universal Credit

Universal Credit is a single monthly payment for people in or out of work, which merges together some of the benefits and tax credits that you might be getting now and also includes the housing benefit. It is paid every month into your bank account.

In November 2015 Universal Credit was introduced to new single claimants between 18 and 60 years 6 months, and eligible for Jobseeker’s allowance.
Universal Credit is the biggest change in the welfare system in a generation and will have a huge impact on MHA and customers.

We anticipate the full Universal Credit role out in Bradford in the spring of 2018. The migration of all the existing housing benefit claims to Universal Credit will start in 2019 and is expected to be completed by March 2022.

In preparation for the forthcoming full service of UC in Bradford in the spring of 2018, we will be in contact to update our customers’ details on our system.

Our experience so far with the single Universal Credit claimants is, that the Universal Credit customers are significantly falling behind with their rent payments. This is mainly due to the time it takes for the Universal credit claim to be processed, which takes up to 6-7 weeks, by this time customers have built up 7 weeks’ rent debt.

From April 2017 the Government is going to remove the automatic entitlement to housing costs in Universal Credit full service areas.

The government is going to axe the Universal Credit housing costs Element for claimants aged 18 to 21 years old to force young unemployed people to live with their parents or pay their own rent. This means that unemployed under-22s will no longer qualify for help with their rental costs.

This will not apply to claimants in receipt of Housing Benefit or those receiving Universal Credit in Live Service areas. We anticipate Bradford becoming a full UC service area in the spring of 2018, this is when the under 22s living in Bradford will no longer receive the Universal Credit housing costs element.

There will be exceptions, including vulnerable young people, those who may not be able to return home to live with their parents, and those who have been in work for 6 months prior to making a claim, who will continue to be able to receive housing support for up to 6 months while they look for work.

For example:

Claimant responsible for a child or a qualifying young person will not be affected.
Claimants who are unable to live with their parents, because they don’t have parents or neither parent occupies accommodation as their home will not be affected.

Local Housing Allowance

The Government has announced that for new social housing tenancies from April 2016, housing benefit will be capped to a new rate called the Local Housing Allowance (LHA). This rate is already in place for claimants of housing benefit who live in private rented accommodation.

From 1 April 2019, all customers on Universal Credit and customers in receipt of housing benefit whose tenancies began or have been renewed since 2016 will receive capped Local Housing Allowance. Full Universal Credit role out in Bradford will be in April 2018. The migration of all the existing Housing Benefit claims on to Universal Credit will start in 2019 and to be completed by March 2022.

The Local Housing Allowance is based on “bedroom need” and not how many bedrooms are in your home. If you are affected by the cap and your rent is higher than the Local Housing Allowance, you will need to pay the difference in your rent.

If the customer is single and under 35 years old the benefit eligible rent and service charge will be capped to a Shared Accommodation Rate (SAR) unless an exemption applies.
Current shared room rates in Bradford is £58.26 per week.

There are a number of exemptions from the shared rate for under 35s. These include couples or those with dependent children, foster carers, those in need of a second bedroom for medical reasons, those in receipt of Disability Living Allowance, Personal Independence Payments or carers allowance, those over 25 who have lived in homeless accommodation for over 13 weeks and have agreed to receive support, and former looked-after children aged 18-21.

Once the LHA cap is introduced to the social housing in 2019, it raises the possibility of some pensioners who are under-occupying their homes, experiencing a shortfall in their Housing Benefit entitlement. This has led to the suggestion that the LHA cap amounts to a new bedroom tax.

Currently, Housing Benefit claimants in social rented housing do not experience a reduction in their entitlement if they occupy a home that is deemed to be larger than they need and have reached the qualifying age for state Pension Credit. LHA rates base entitlement to Housing Benefit on household size, so single person or couple living in a 2-bed property may receive the maximum of the one- bedroom LHA rate within the local area.

The LHA cap will only affect new tenancies entered into after 2016, so it appears that some measure of protection will apply to under-occupying pensioner households with existing tenancies at April 2016. In addition it will only affect claimants who’s’ rent is higher than the appropriate LHA rate.

Under Occupation (Bedroom Tax) & Benefit Cap

Bedroom Tax
In April 2013 the Government introduced a tax on spare bedrooms for people living in housing association properties –
Having one spare bedroom will mean you will lose 14% of your entitled housing benefit.
Having two or more spare bedrooms will mean you will lose 25% of your entitlement.
The government says children of the same gender under 16 can share a bedroom.

Benefits Cap
The Benefit Cap is a limit on the total amount of work related benefits you can get if you are of working age. The Benefit Cap will only affect you if you’re getting Housing Benefit or Universal Credit. If the cap affects you, your Housing Benefit or Universal Credit housing element is reduced.

In August 2013 the government introduced £26,000 benefit cap, which put limitations on the amount of benefits that could be claimed:

  • Couples with or without children and lone parents could claim £500 per week (£26,000 per annum.)
  • Single adults could claim £350 per week (£18200.00 per annum)

The £26,000 cap mostly affected large families claiming work related benefits and living in 4 + bedroom properties.

From 7 November 2016 the cap levels were lowered from £26,000 to £20,000 for our region.

The new £20,000 cap is going to affect all our customers claiming work-related benefits and living in 3 bedroom properties and have 3 or more dependent children.

  • Couples with or without children and lone parents can now claim £384.62 per week (£20,000.24 per annum)
  • Single adults can now claim £257.69 per week (£13399.88 per annum).