25th November, 2014
Earlier this year, I highlighted a social security scandal, relating to JSA/ESA sanctions and their unintended knock-on effect on Housing Benefit. The problem has, if anything got worse, despite the fact both DWP and councils are well aware of its existence, not to mention the unnecessary rent arrears and untold misery it inflicts on tens of thousands of tenants. Landlords, already reeling from some of the worst effects of the welfare reforms, are also experiencing serious hikes in rent arrears, caused by this same issue, which needs to be addressed by both councils and DWP urgently.
The problem is caused by the DWP misleading councils on the proper status of JSA/ESA claims, following the imposition of a sanction, which prompts suspensions and cancellations of Housing Benefit/LHA when there’s simply no justification for this. CIH produced the following report covering the same issue: http://www.insidehousing.co.uk/finance/‘unintended’-housing-benefit-cuts-hit-tenants/7001667.article
Nearly a year on, and despite DWP’s acknowledgement, that there should be no adverse impact on Housing Benefit nor indeed rent arrears, the problem not only continues but is escalating out of control. Only this past week I’ve been dealing with half a dozen cases involving around £15000 rent arrears. In all cases, the private landlords have been reluctant to pursue recovery action, believing the problem would resolve itself, but this has not happened, prompting the same landlords to seek my assistance in the hope they can have the lost benefit restored and avoid the need for legal proceedings to recover debt and property.
The sheer number of sanctions being applied against benefit claimants is staggering. The affected claimants are deemed not to be doing enough to find work or refusing work when offered. During the year to October 2013, more than 1 million claimants were penalised in this way. My mailbox and associated conversations with landlords, confirms, there’s a corresponding increase in the number of councils, throughout the UK, suspending and, in many cases, later cancelling housing benefit (LHA), due to the implementation of JSA “claimant commitment” sanctions which themselves impose penalties of between 4, 13 or 26 weeks loss of personal benefits – a double whammy!
As the Inside Housing article suggests, JSA & ESA sanctions should not, in themselves, affect Housing Benefit. So why are so many awards being suspended and later cancelled, creating gaps in HB/LHA entitlement; £M’s in unnecessary rent arrears; and tenancies being put in jeopardy?
The problem is associated with DWP and Council “information sharing” arrangements. Councils receive electronic notification from DWP when JSA & ESA claims are terminated, even if it’s only for a short period of time; sometimes as short as 1 day! The process is designed to minimise overpayments and prevent fraud but is also having the impact of bringing claims to a premature end or prompting letters from councils posing questions about whether the tenant remains resident and/or entitled to Housing Benefit/LHA or not.
The information sharing in JSA/ESA sanctions suggests the claimant’s DWP benefit has been terminated. In fact, in many cases, it’s only the payment of benefit which has been stopped, but the claimant retains an underlying entitlement to JSA as they continue to register and actively pursue employment. The HB regulations actually recognise the potential problem and provide “Someone is considered to be on income-based JSA on any day in respect of which it is payable to her/him, including……..days on which the claimant is entitled to income-based JSA but is disqualified from payment because he……….is sanctioned”.
However, at the minute, when a claimant has a sanction imposed, the DWP notification that JSA has terminated casts doubt on the tenants continuing HB/LHA eligibility; prompting a suspension on the claim and letter to the claimant, seeking an explanation of what’s happening. The letter intimating suspension should provide 30 days to respond, but oftentimes doesn’t or claimants simply fail to reply or delay, and then fail to seek an extension of time. The common outcome: claims are cancelled wholly unnecessarily, creating rent arrears and potentially rental loss. When challenged about the cancellation, councils often invite “new claims” and then promptly refuse any request for backdating to the date of the original cancellation. Tenants, with their landlords help, should challenge the original flawed decision to cancel HB/LHA and should rarely, if ever, complete a new claim form.
The problem could so easily be resolved, if DWP’s information about the sanctions could be improved to reflect the fact it’s only a sanction and not termination of the JSA award. In that case, applying the HB regulation provisions, no suspension would be applied to the HB award, eliminating, in turn, all the associated problems alluded to earlier in this article.
Landlords encountering such problems need to be equipped to tackle them properly, as the rewards for their effort can be very significant for both tenant and landlord alike. I explain how to tackle the suspensions & cancellations issue and much more besides, during my HB/LHA seminars.
In the case of the private sector, see http://www.rla.org.uk/landlord/courses/local_housing_allowance.shtml One of the recent delegates, armed with the information I provided recouped £9,000 in “lost” Local Housing Allowance! Social landlords have even more of an interest in this topic, due to the number of JSA/ESA tenants they have, and can seek my help by emailing email@example.com or phoning 07733 080 389