My newsletter last week focused on the issue of “changes in circumstances” and how they would be treated differently under Universal Credit. Kevin Turnpenney, Head of Operations at Barnet Homes responded:
“Bill, I write with reference to your recent newsletter, regarding the above issue. Aside from individual change in circumstances I am very worried as to how Universal Credit will deal with any annual rent increase process. For example last year’s rent increase directly affected over 5000 of Barnet Homes tenants in receipt of HB; extrapolate that across the country with RSLs, ALMOs and LAs; it’s a HUGE issue”.
I totally agree with Kevin’s sentiments; he raises yet another important issues for social landlords to ponder and plan for in the forthcoming months.
Kevin already knows the annual rent increase exercise, affecting all social landlords, will be dealt with completely differently under Universal Credit, as it will place the onus on the tenant to provide evidence of his/her annual increase, rather than the automatic updating process, which applies just now under Housing Benefit and associated local authority arrangements.
As I’m sure you’re aware, every year, around November/December, social landlords’ debate at Board level the proposed rent increase for the following year. As well as notifying the tenants, landlords intimate the change directly to their local council’s Housing Benefit section, usually by electronic media. The notification confirms the revised amount of contractual rent. The Council, in turn, applies the new figure to the HB calculation from the following April, thus ensuring the increase is automatically applied to all its tenants who rely, at least partially, on Housing Benefit to meet their rental obligations.
Under Universal Credit, the DWP’s approach will be to place the onus on the tenant to inform them; both at the point of claiming or migrating (transfer) to Universal Credit and every year in advance of the rent increase. Tenants will be required to notify the DWP of their rent liability and provide either a copy of their tenancy agreement or some form of letter from the landlord concerning the increase in charge. Some RSL managers have asked me during our training sessions – “Surely there will be some form of interface between DWP and landlord like there is at present?” – Put simply, there won’t be. The onus will clearly rest with the tenant, for the first time, and many will struggle with this new responsibility.
Landlords will of course be able to assist their tenants, meet their new obligations, by providing paper and PDF copies of tenancy agreements and rent increase letters, but responsibility for ensuring the information is provided to the DWP will still rest with tenants. Furthermore, any delays in providing the information could also result in the “housing costs” element and/or the rent increase figure not being absorbed in the UC calculation. As I mentioned in my recent newslater, provisions for backdating new claims and changes in circumstances are limited to one month under UC, whereas there still remains 6 months backdating under Housing Benefit.
Of course, none of the above applies until UC is rolled out nationally, beyond the Pathfinders, and even after it is, those tenants who continue to claim Housing Benefit, pending migration to UC, and those not affected i.e. Pension Credit claimants; will continue to have their annual rent increases dealt with by the same electronic media that exists between landlords and council HB sections. So it is quite likely, that between 2013-2017 there could exist, two quite distinct systems; the current automatic system applying to non-migrated and Pension Credit claimants; the new procedures applying to new and migrated Universal Credit claimants. Hardly, the ideal situation and something to add to your mitigation plans!
Anyone needing further clarification on this critically important topic can write to me I’ll update this information on the website. For those of you who are not currently members and would like to join or access a trial of the site, please contact me by e-mail or on 07733 080 389