Jan11/HS002

Benefit legislative changes effective from April 2011

LHA and JSA decreases and non dependant deductions increases

The potential impact upon customers, landlords and homelessness

Local Housing Allowance

Local Housing Allowance (LHA) was introduced April 2008 as a new Housing Benefit (HB) scheme for the assessment of all new claims and change of address for tenants renting private sector accommodation.

LHA is based on location and the number of bedrooms required with monthly rates set by the Valuation Office Agency.

WDC Housing Benefit caseload is currently 9,300 cases, of which 2,600 receive LHA – 540 existing customers will be affected during 2011/2012.

Remainder are mixture of pre April 2008 private sector tenants, Council and Social Sector tenants who are not affected by this change.

Changes that will reduce HB and could have an impact upon homelessness From April 2011 the Local Housing Allowance

calculation will change, decreasing the amount of HB payable per household.

From April 2011 the deduction made to HB where a non dependant is present will be significantly increased, further reducing HB/CTB paid to affected households.

From April 2013 HB reduces where a JSA customer has been out of work for more than a year.

LHA changes April 2011

Area1 Room 1 Bed 2 Bed 3 Bed 4 Bed 5 Bed

now less now less now less now less now less now less

Lowestoft £64.13 £4.13 87.23 6.46 109.62 8.08 121.15 6.92 159.81 15.58 199.04 54.81

Rest of Waveney

£57.69 £2.31 98.08 5.77 121.15 6.92 138.46 11.54 190.38 17.30 230.77 57.69

Ipswich £57.73 £4.61 94.62 4.62 115.38 5.76 136.15 9.23 174.23 12.69 265.38 103.84

Based on Dec 10 figures

Area1 Room 1 Bed 2 Bed 3 Bed 4 Bed 5 Bed

now less now less now less now less now less now less

Lowestoft £65.00 5.00 87.69 6.92 109.62 8.08 121.15 9.23 159.23 15.00 199.04 54.81

Rest of Waveney

£57.69 2.54 98.08 6.93 121.15 6.92 138.46 8.08 190.38 17.30 230.77 57.69

Ipswich £61.00 7.88 94.62 4.62 115.38 5.76 137.31 10.39 178.85 17.31 265.38 103.84

Based on Jan 11 figures

Key: Lowestoft = most of Waveney

Rest of Waveney = some IP19 addressess

Ipswich = Suffolk Coastal

Number of LHA customers affected

Transitional protections will delay the impact for most existing customers for 9 months

540 customers will be affected during 2011/2012

Total case figures are therefore for January, February and March 2012

£33,007 loss in HB for 540 customers over these 3 months

Prediction of £132,028 for the 2012/2013 year

905 cases will lose up to £15 top up from April but HB will still cover rent

1 Room 1 Bed 2 Bed 3 Bed 4 Bed 5 Bed

Total

cases

Decrease of £4.13

Decrease of £6.46

Decrease of £8.08

Decrease of £6.92

Decrease of £15.58

Decrease of £54.81

Jan 15 Cases 132 98 24 2 2 273

Feb 12 72 40 9 2 135

Mar 18 59 43 11 1 132

LHA £15 to up removed April 2011

HB is calculated on the eligible, contractual rent.

Existing LHA rules allow that figure to be increased upto £15 of the difference of the applicable LHA rate above the contractual rent.

WDC has 905 customers who will lose upto £15 from 1/4/11 but will still receive HB to pay their rent.

LHA liason

The Benefits Service has identified affected customers who will be written to from February 2011 with the changes – this will be a rolling monthly programme.

The Benefits Service met landlords on 19th January 2011 to cascade and discuss the changes and HoBTs group on 24th January.

The Benefits web site is being updated with the changes.

Discretionary Housing Payments DHP’s are payments made at the discretion of the LA in cases where

the LA considers that additional help with housing costs is needed. For example,

Extra rooms needed, location necessary due to work/school/care needs. All cases are equally considered, but the fund is cash limited.

£33,007 potential reduction in HB during 2011/12 due to LHA changes

Waveney has been allocated £37,403 for DHP in 2010/11

DWP DHP fund for 2011/12 will be £48,939

Due to the increased pressure on the DHP fund the Council will need to review DHP policy to set priorities.

Non Dependant deduction increases

A non dependant is an adult living with another adult as a member of the family, such as a grown up son or daughter.

Benefit rules assume they make a financial contribution to the household based on their income.

That contribution is deducted from the claimant’s Benefit.

The level of increase has been designed to catch up on 1999 frozen rates over the next 4 years.

Level 1 Level 2 Level 3 Level 4 Level 5

amount cases amount cases amount cases amount cases amount cases

HB £2 212 £4.55 35 £6.25 28 £10.25 30 £11.70 7

CTB £0.55 269 £1.10 114 £1.40 21 £1.65 30

Further Changes – April 2013

Council Tax Benefit will become a local scheme – no firm details.

DWP Subsidy will be reduced by 10% - compared to 2012/13 CTB expenditure?

A maximum cap will be imposed on the amount of Benefits a household can claim. This is expected to be: £500 pw for couples, £350 pw for single people. This is likely to be administered by capping HB payments.

Further Changes

LHA rates to rise by the Consumer Price Index rate of inflation rather than in line with local rent rises.

HB reduced by 10% of the full award after 12 months for claimants getting Jobseeker’s Allowance (JSA).

April 2014: Universal Credit planned for new claims. Migration timetable from 2014 to 2018? DWP working on detail.

Effect of JSA reductions

From April 2013 HB will be reduced by 10% where a customer receiving Job Seekers Allowance (JSA) has been out of work for more than 12 months.

Within our current caseload 1480 claimants have been receiving JSA - 419 will be effected.

The range of the reduction will be £6 to £14 per week.

Summary

Benefits Service are:

providing information with Benefit uprating letters / new Council Tax bills.

working closely with Housing Options to help advise customers

directly contacting affected customers and updating Benefits web site

liaising with landlord and customer groups