We have received a public document presented by Hackney Homes officers to a recent public Hackney Homes Board meeting which outlines massive cuts to Housing Benefits and other benefits and the way they are to be paid which will have a devastating impact on Hackney residents. See below, but for a summary Hackney Unison have produced this http://hackneyunison.wordpress.com/2012/11/09/welfare-reform/
Welfare Reform (Hackney Homes briefing Oct 2012)
• Reforms from April 2013:
– Benefit Cap
– Under Occupancy
– DLA/PIP
– Council Tax Support
– Replacement of Social Fund with local scheme
• Universal Credit
– Timeframe
– Digital
– Limitations
– Extra Support
– Migration
Benefit Cap (£500/£350)
• Takes effect from 15/04/2013
• 1067 households in Hackney
• 50:50 in social/private rented sector tenancies
• 60 in TA, already homeless
• 93 are HH properties
• Loss in HB between £1.00 -£221.79
• HH have 32 large families (5 children +) affected
• Solution:
– Employment with Working Tax Credit award affords an exemption
Under Occupancy (Bedroom Tax)
• Takes effect from 1/04/2013
• Social rented sector only
• Working age only (not pensioners)
• 4179 households in Hackney
• 2255 households Hackney Homes, rest are RP’s
– 1663 by 1 room will lose 14% of HB
– 592 by 2 rooms will lose 25% of HB
• Solution:
– Find the shortfall, increase your income, take a lodger or move
DLA/PIP
• DLA abolished and replaced with PIP
• Health conditions will have to last 6 months instead
of 3 months
• Work capability re-assessment programme from
April 2013
• 11,000+ affected in Hackney
• No lifetime awards , renew at intervals of 2 years
• Pilots start in April 2013
• New claims June 2013
• 2 components with 2 rates
Council Tax Support
• Abolishing the current national Council Tax Benefit scheme
• All councils have to replace it with their own new local schemes with 12.5% less funding
• Pensioners protected
• Takes effect from 1/04/2013
• Reduction in support of 15%
• 28,000 households affected
• Public consultation is running from 13/08/12 –
22/10/12 : http://www.hackney.gov.uk/ctsconsultation.htm
Local Replacement Scheme
• Social Fund scheme abolished including Community Care Grants and Crisis Loans function
• Funding passed to councils but at 2005/6 levels, no requirement to run a scheme
• Hackney will run a crisis scheme
• Hackney Discretionary Crisis Support
• Takes effect from 1/04/2013
• £1.4m, £75k less
• Expect 10-11,000 applications
• Online, referrals, limited cash
• Short term advances and budgeting loans will stay with DWP
Universal Credit
• Replaces
– Income Support, JSA IB, ESA IR, Child Tax Credit, Working Tax Credit and Housing Benefit with one benefit
• Paid monthly
• Direct to nominated person in household
• Hackney Homes currently have 15,485 tenants claiming Housing Benefit
• Benefits and Housing Needs Service pay £70+m peryear in Housing Benefit to Hackney Homes rent accounts (2011/12)
Universal Credit
• Timeframe
– Payment Direct pilot in Southwark June 2012
– Lewisham UC face to face pilot Autumn 2012
– Pathfinder with the boroughs of Tameside, Oldham, Wigan and Warrington April 2013
– New claims small scale Oct 2013, full capacity April 2014
• Digital
– Online customer accounts, award notifications, emails
– Limited telephone support and face to face
• Limitations
– Less allowances, no 2 homes, 1 month backdating, less service charge provision
• Extra support
– Exceptions
• Split payments
• More frequently – fortnightly
• Payment direct to landlords
– Budgeting and Support
– Financial Products
• Migration – reclaim not transfer
– Migration 2014-2017
– Natural
• Change of circumstances – 1 month process
– Managed
• 3 month process
• Extra support
– Exceptions
• Split payments
• More frequently – fortnightly
• Payment direct to landlords
– Budgeting and Support
– Financial Products
• Migration – reclaim not transfer
– Migration 2014-2017
– Natural
• Change of circumstances – 1 month process
– Managed
• 3 month process
Key timelines and known impacts:
Bedroom Tax 1/4/2013
• 2255 households affected:
o 1663 will lose 14%
o 592 will lose 25%
Benefit cap 15/04/2013
• 93 households affected
April 2013 – other benefit changes affecting residents disposable
income, non dependent changes, Council tax support
Universal Credit new claims October 2013/April 2014 potential for 30
cases per week
• 2014 change in circumstances
• 2014 – 2017 remaining 15,485 HB claimants move to UC
Potential impacts
Increase in arrears;
Reduction in service charge elements paid;
Increase in legal costs – direct payments with arrears will assist;
Increase in transaction costs (although 16,000 currently make some form of payment);
Increased early intervention resources;
Increased evictions;
Increase in void levels and associated costs;
Increased bad debt provision;
Inadequate debt advice provision and support services;
Increased pressure for vulnerable residents;
Pressure to find smaller properties for under occupiers.