welfare reform update - chartered institute of housing pdfs/presentations/gear... · 2013-04-19 ·...

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Welfare reform update

Sam Lister, Policy & Practice Officer, CIH


Recent developments

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Miscellaneous

• Shifting timetable (no announcement)

• Temporary accommodation

• Universal credit service charges

• Supported housing exemption

• Local CT reduction schemes (final/TBC)

• Consultation on switchback

• Welfare Benefit Up-rating Bill

• UC Local Support Services Framework

Since October 2012


Autumn Statement

• Temporary support for mortgage interest scheme extended until January 2014

• Universal credit rates and allowances

• Benefits cap roll out

• Benefit cap and exempt accommodation

Since October 2012


The benefit cap

• Start April 2013 in Bromley, Croydon, Enfield and Haringey only

• Full roll out completed by September 2013

• HB for tenants in exempt accommodation will not count towards the cap

• Concession paid for by reduction DHP budget


Temporary accommodation

• Subsidy rules for homeless acceptances

• April 2013 – subsidy levels same as current

90% of LHA rate for property

£60 management fee (£40 London)

• Universal credit

Housing costs paid as part of UC (at LHA rates)

Household size not property

Management element paid to local authority probably via DHP pot


UC eligible costs


HB eligible services – the law

• Not eligible: ‘general counselling or any other support services’ are not eligible for HB (schedule 1 paragraph 1(f))

• Eligible: ‘services connected with provision of adequate accommodation’ provided they are not in respect of services that are ineligible

• If it is support – it does not somehow become eligible if you re-classify it as ‘intensive housing management’

• The law is exactly the same for exempt accommodation


UC service charges

Four categories broadly same as before

• Maintenance, upkeep and supply of fuel and water supply to internal or external communal areas including reasonable facilities (laundry, children’s play areas)

• Cleaning of exterior windows on upper floors of multi-storey

• Maintenance, cleaning and repair of basic services to communal areas (refuse collection, communal lifts, secure building access)

• Payments for the use of essential items (furniture or domestic appliances)


• Supported housing that is ‘exempt accommodation’ will be ‘outside’ universal credit

• Outside UC refers to help with housing costs through the housing costs element not the other elements

• Housing costs outside UC will continue to be covered (for the time being) by housing benefit

All the existing housing benefit payment rules (direct payment of HB to landlord).

UC or not UC


• Individual, not by block or majority

• Does not apply to local authority tenants

• Outside UC for help with rent

• Exempt from referral to rent officer

• Exempt from bedroom tax

• Rent not counted in cap

• Current HB payment rules apply

Exempt accommodation


• Any not-for-profit body (not just RPs)

• The authority decides the rent is unreasonable

Reasonable: full eligible rent and service charges

Unreasonable: Must restrict except where the claimant is protected or nothing else suitable is available

Rent officer valuations are advisory (no LRR)

• HB subsidy penalties apply if

Rent is unreasonable; and

Landlord is not a registered provider

Exempt accommodation


Timetable


Moving clocks run slow

• The timetable is shifting

• You have more time than you thought

• Use the time you have been given…


Original UC/PC plan

• New claims universal credit (October 2013)

• Pension credit housing credit (October 2014)

Revised UC timetable?

• Pilots (April 2013)

• Non-HC only? Selected areas? (October 2013)

• HC start? Selected areas? (April 2014)

The shifting timetable


A chance to innovate


Staying positive

• Start with your vision

• How will the service look in ten years time

• What would your tenants like to have

• What might be a real benefit them


Getting started


A checklist

• Brainstorm

• Consult

• Find out what’s out there

• Share and borrow knowledge and ideas

• Use your bulk power

• Find partners

• Market test (pilot)


• Review policy and procedure

Be visible

Out of hours/ mobile contact

Telescope process (clarity - say it, do it)

• Develop a positive payment culture (e.g. water)

• Increase rent arrears direct

• Identify vulnerable /unlikely to pay

• Identify payment preferences

• Improve customer intelligence

Improving rent collection


Standard approaches


Standard approaches

• Welfare benefits and money advice service (in house or external)

• Sign up for basic bank accounts

• Sign up for direct debit

• Partnering with a credit union

• Access to jam jar accounts

• Financial inclusion strategy

• Financial capability training


• LHA rules mandatory Eight weeks

DWP third party payments (hostels and rent arrears)

Death and previously being paid direct

• LHA rules discretionary Previously being paid under mandatory rules

Likely to have difficulty managing their affairs (vulnerable)

Improbable that the claimant will pay their rent

For up to eight weeks whilst deciding the above

• ‘Safeguarding’ Guidance http://www.dwp.gov.uk/docs/lha-guidance-manual.pdf

LHA payment rules

http://www.dwp.gov.uk/docs/lha-guidance-manual.pdf







Promoting bank accounts

• You can promote basic banking products

• Transactional bank account is not a regulated product (c.f. insurance, investments, credit)

• Important to offer choice but can signpost or refer to one specific bank or branch

• FSA guidance for social housing providers

http://www.fsa.gov.uk/pubs/guidance/guidance9.pdf




Some new ideas


What’s out there?

• Pre-payment cards

• Mobile payment

• Consumer reward schemes

• Bulk purchase

• Tenant products

• Consumer bundles


Pre-payment cards

Debit Card “Open Loop”

Prepaid Card “Restricted Loop”

Reloadable

Prepaid Card “Open Loop” Reloadable


Pre-paid potential advantages

• Not a credit card – no credit checks (identity checks)

• Difficult to get into debt as money loaded up-front.

• Cheaper transaction charges (cash, cheque or credit cards)

• Familiar – debit cards overtook cash 2010

• Inclusive – no need for a bank account

• Exposure limited to what is on the card (lost/stolen quickly disabled)

• Potential “wallet” facility helps customers manage household budgets

• Customer intelligence

• Combine with reward schemes


Mobile payment

• The M-Pesa revolution

Started as micro lending initiative in Kenya (Safaricom)

Deposit into an account stored in cell phone

Send balances using SMS

Redeem deposits for cash

Branchless banking

£446 million payments a month

140,000 accounts in one month


Bulk purchase - utilities

How it works

• Potential consumers register – no obligation - with intermediary (local authority, consumer body)

• Attain critical mass of customers

• Reverse auction with fuel companies

• Offer made to registered customers


Examples

• Which? / 38 Degrees - The Big Switch

287,000 registered

37,000 switched

Co-operative Energy bid winner

Average saving £223 per year

• Manchester scheme

Ten local councils

15,000 signed up in two weeks

Auction 29 January

www.gmfairenegy.com

http://www.gmfairenegy.com/


Customer segmentation

• Mosaic (Experian) used by local authorities

11 key groups

61 major types


Example: Mosaic analysis


Mosaic groups

0

5

10

15

20

25

30

A B C D E F G H I J K

% r

es

ide

nti

al d

eli

very

po

ints

Barnstaple

Devon

National

Court data

Example: Mosaic analysis


Reward schemes

• Closed loop – has value to retailers

• Incentives (positive payment culture)

Tenants

Employee rewards packages

• A way of collecting customer intelligence

• Individual or community benefits

• Can contribute towards charges


Consumer bundles

How it might look

• Co-op Bank: payment card and bank account

• Co-op store reward scheme

• Negotiated discount with local co-op stores

• CIS home contents insurance

• Co-op bulk buy fuel

• Community reward scheme


Learn and share


www.cih.org/directpaymentslearningnetwork

[email protected] [email protected]

CIH learning network


Common findings

• Poor customer knowledge

• Tenant vulnerability is a weak/moderate predictor of payment behaviour

Some least vulnerable are least reliable

Some most vulnerable are most reliable

• 80/20 contact rule of thumb

• Performance rises after first payment

Demo project lessons


Are you really the first?

• Many councils already use pre-payment cards

School meals service

Social care payments

• Familiar with card features and problems with use

40


Conclusions


Summary

• Use the time you have been given • Set a vision of where you want to be in ten years • There are some tried and tested approaches • Innovate… • Use and share the knowledge that is already out

there • Adopt technology rather than self build • Co-operate and use your bulk power • Look to what you can control

welfare reform update - chartered institute of housing pdfs/presentations/gear... · 2013-04-19 ·...

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