Andy Tate, Policy Officer, National Housing Federation

Welfare reform: Overview and impact

Welfare reform

• Size criteria

• Overall benefit cap

• Universal Credit

• Localisation

Social sector size criteria

(£490m)

Up-rating LHA by inflation –

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

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

Discretionary Housing Payments

Discretionary Housing Payments

£2.2bn

£125m

HB cuts HB help

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

2010-11: £20m

2011-12: £30m

2012-13: £60m

2013-14: £155m

2014-15: £125m

Social sector size criteria

Size criteria impact

14% cut for one ‘spare’ bedroom

25% for two or more ‘spares’

£14 average weekly loss

660,000 claimants affected across GB

63% (420,000) are disabled

200,000 on Disability Living Allowance

100,000 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?

Household benefit cap

Benefit Cap impact

£500 per week cap

56,000 households affected

50% will contain a disabled person

46% of those affected are in social housing

49% 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?

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 tenant

• 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:

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

Contact

Andy Tate

National Housing Federation

020 7067 1081

andy.tate@housing.org.uk

Further information:

www.housing.org.uk/welfare

Home Group Welfare Reform Changes

Presentation by Richard Glaister, Customer Services Manager & Richard Partington, Customer Services Partner,

Home Group

Home Group – What we do?

• Home Group is a social enterprise and a charity with a turnover of over £300m

• We provide general needs and supported housing and services targeted towards helping some of society’s most vulnerable people take control of their own lives

• We house over 120,000 people a year in 55,000 homes in over 200 local authority areas in England, Scotland and Wales.

• We work with almost 30,000 vulnerable people through over 500 supported housing, justice and health services each year.

Home Group – Welfare Reform

• Home Group Video – Under Occupancy Explained

Our response so far Under Occupation

•Visiting every customer affected by the size criteria & highlighting how customers are impacted •Discussing what options & support is available •Offer a range of options to assist existing customers:

– down-sizing via Mutual Exchange, transfer, move to another landlord – lodgers – accessing employment, training & volunteering opportunities – range of payment options to ensure shortfall in rent & HB is paid – budgeting tools, financial inclusion information & support – Aligned our Allocations Policy with DWP size criteria – Tailored communications in the form of video, leaflets, magazines,

letters for customers & colleagues

Our response so far

Welfare Reform Patch Survey

•Hillingdon and Hounslow patch (250 properties)

•Aim: to create a snapshot of our customers’ awareness of – and readiness for – welfare reform

•Phone survey conducted by London team on 20th December 2012

•Survey targeted towards most at-risk customers – those who receive HB and do not receive pension credits

Our response so far

Survey results

•57% were unaware of the changes

•38% ‘concerned’ for their own situation; 38% ‘very concerned’

•14% have no bank account, 21% no internet access

•50% would need help filling in a benefit application online

•72% feel they need support from Home in adapting to the changes

•43% would like help with money management

Our response so far Under Occupation – Rayners Lane (450 properties) •94 customers identified as possibly being affected •Contacted all 94 customers initially by letter, followed up with phone calls and face to face meetings •92 customers have had successful phone calls or face to face meetings •28 customers will be actually affected •5 customers will be supported by Stonham •Of the remaining 23, seventeen customers have said they will pay the difference.

Welfare Reform Presentation

•Any questions

www.amicushorizon.org.uk

AmicusHorizon XXXX XXXXX XXXXXXXX Making homes, helping people

www.amicushorizon.org.uk

Making homes, helping people

AmicusHorizon Universal Credit and Direct Payments

26/03/2013

John Barr - Customer Experience Director David Ellis – Financial Inclusion Manager

www.amicushorizon.org.uk

AmicusHorizon XXXX XXXXX XXXXXXXX Making homes, helping people Making homes, helping people Our homes

40% of our homes are in London

www.amicushorizon.org.uk

AmicusHorizon XXXX XXXXX XXXXXXXX Making homes, helping people Making homes, helping people Our customers

3 Regions:

• London & Surrey

• Sussex

• Kent

• 28,000 homes

• 19,500 working age households

• 10,500 receiving Housing Benefit

• 8,000 likely to receive Direct Payments

www.amicushorizon.org.uk

AmicusHorizon XXXX XXXXX XXXXXXXX Making homes, helping people Making homes, helping people Income/Financial Inclusion Structure

Open 08.00 – 20.00 (weekdays) and 09.00 – 13.00 Saturdays

www.amicushorizon.org.uk

AmicusHorizon XXXX XXXXX XXXXXXXX Making homes, helping people Making homes, helping people Financial Inclusion Strategy

www.amicushorizon.org.uk

AmicusHorizon XXXX XXXXX XXXXXXXX Making homes, helping people Making homes, helping people ‘Benefit Matters’ and DVD

www.amicushorizon.org.uk

AmicusHorizon XXXX XXXXX XXXXXXXX Making homes, helping people Making homes, helping people Information leaflets (14)

www.amicushorizon.org.uk

AmicusHorizon XXXX XXXXX XXXXXXXX Making homes, helping people Using technology… Making homes, helping people

www.amicushorizon.org.uk

AmicusHorizon XXXX XXXXX XXXXXXXX Making homes, helping people Making homes, helping people Campaign & inform…

• Call

• Visit

• Write (targeted letters/leaflets

• Events

• Benefit Advice/Money Management

• Help to open bank/credit union acs.

• Benefit Matters/DVD

• Facebook/Website/Calculator

• Mobile Working

www.amicushorizon.org.uk

AmicusHorizon XXXX XXXXX XXXXXXXX Making homes, helping people Making homes, helping people More help…

www.amicushorizon.org.uk

AmicusHorizon XXXX XXXXX XXXXXXXX Making homes, helping people Making homes, helping people Implications for AmicusHorizon…

Still early to know how many will cope

with the challenges…

• Managing budgets in a different way

• Managing money monthly

• Shift to electronic payments

• Access to computers/skills

• Very few have savings (5 -10 %)

• Need money management support

www.amicushorizon.org.uk

AmicusHorizon XXXX XXXXX XXXXXXXX Making homes, helping people Making homes, helping people What happens next?

• Higher arrears & legal costs

• More evictions?

• More debt?

• Increased borrowing costs

• Lower build capacity

www.amicushorizon.org.uk

AmicusHorizon XXXX XXXXX XXXXXXXX Making homes, helping people

www.amicushorizon.org.uk

Making homes, helping people

Thank you - questions?

John.Barr@amicushorizon.org.uk

David.Ellis@amicushorizon.org.uk

Welfare Reform and

Financial Inclusion

Presented by Andrew Sodje - Head of Revenues

26 March 2013

About Us

• Founded in 1862 by George

Peabody

• 20,000 + homes in the capital

and affordable housing for 55,000

+ Londoners

• Wide range of community

programmes:

- employment and training

- health and wellbeing

- family support

- welfare benefits advice

- digital inclusion

• A good home, a real sense of

purpose and a strong feeling of

belonging

The effects of Financial Exclusion

• Generational worklessness

• Child Poverty

• Poor housing conditions

• Anti-social behaviour

• Poor literacy and numeracy skills

• Low self esteem

• Young people not in education or training

• Poor credit history

• Poor health/depression and anxiety

Financial Inclusion –

Our Objectives

Improve access to:

• Banking and affordable credit

• Money and debt advice

• Employment and training

• Reduce fuel poverty

Our Welfare Benefits Team

Financial Inclusion – How we can help

Utility costs

• Negotiating reduced utility payment plans

Rent arrears

• Helping tenants claim backdated housing benefit – increased tenant income

by £305k in 2011/12

Tax Credits and Overpayments

• ‘Better off’ calculations and early assistance to maximise take up of tax credits

Debt

• Frontline departments signpost residents to specialist advisory services such

as MyBnk – over 800 referrals each year

• Improving access to low cost finance and affordable credit

• Supporting with budgeting and prioritising debt – over 1,000 sessions

delivered by Money Advice Service in past 12 months

• Working with local credit unions

Employment & Training

• Over 1,000 people into jobs and training opportunities in 2012

Case Study - Mr A

• Mr A suffers from mental health issues following a violent attack

• He was not opening post or engaging with any services

• He lost all benefit entitlements and was not receiving medical care

• Mr A was referred to the Peabody Welfare Benefits team who liaised with his

GP, Social Services & DWP

• He now receives Disability Living Allowance and its passported benefits

• Welfare benefits team will gather supporting evidence to help Mr A apply for

Personal Independence Payments (PIPs)

• The team will also help Mr A prepare for entitlement interviews, and advocate

for him in the event of an appeal

Our Financial Inclusion Action Plan

• Deliver customised face to face money advice and telephone debt advice.

• Discuss financial capability with tenants before/during sign up, and signpost to

employment and training service.

• Advice on grants available for utility costs, discounts and sources of free

energy help.

• Information on bank accounts and incentives for direct debits.

• Hardship fund to support vulnerable tenants.

• Advice on affordable credit and credit union services.

• Offer community space at regional hubs and facilities for debt advice and

management sessions.

• Promote advice services via video, surgeries, home visits, resident

publications, rent statements.

Welfare Reform – key

challenges

• Universal credit and direct

payments – increased arrears,

management costs and higher levels

of debt for residents already on low

incomes.

• Underoccupation – 750 affected by

the spare room subsidy.

• Benefit cap

• Reputational damage

• Relationship with lenders

• Impact on growth strategy

Questions