Safeguard Policy

The purpose of this document is to outline the council’s policy in relation to the payment of Housing Benefit to landlords under the LHA provisions. The underlying intention of this policy is to ensure that payment of LHA is made in accordance with the relevant regulations and guidance, but also to deal with requests for payment direct to landlords in a manner that is administratively straightforward and does not cause any undue delay in the award and payment of Housing Benefit claims.

Regard has been had to DWP guidance and the relevant regulations pertaining to the payment of claims under these arrangements.

Existing Provisions

There are already certain circumstances where the council has to pay Housing Benefit to a person’s landlord. Regulation 95(1) of the Housing Benefit Regulations 2006 sets out that payment of rent allowance has to be made direct to the claimant’s landlord where:

  • The tenant has 8 weeks or more arrears of rent; or
  • An amount of the claimant’s IS/JSA (IB) is being paid to the landlord to meet rent arrears.

There are two exceptions to this rule:

  • Where it is in the overriding interest of the claimant not to make payment direct to the landlord
  • Where the landlord is not a “fit and proper” person (this only applies where the council has a basis for doubting the landlord’s probity in relation to Housing Benefit).

Eight-week arrears cases

Housing Benefit Regulation 95(1) states that payment has to be made to the landlord where a person is in rent arrears of 8 weeks or more (except where it is in the overriding interests of the claimant not to make payment to the landlord). This is a mandatory provision and there is no discretion in this matter unless it is in the overriding interest of the tenant not to pay the landlord.

First payment to landlord

Councils have the discretion to make the first payment of Housing Benefit payable to the landlord and send it to the claimant. This option is considered if:

  • the claimant has not paid their rent for the period covered by the payment; and
  • it would serve the interests of the efficient administration of Housing Benefit.

The intention behind this provision is to safeguard public funds in cases where there may be a large sum of Housing Benefit involved (even if it was for less than 8 weeks’ entitlement) and there is a risk that the claimant would fail to pay their rent.

Safeguards Policy

Introduction

Under the new LHA arrangements, Housing Benefit may be made to a person’s landlord where the council considers that the tenant “is likely to have difficulty in relation to managing his financial affairs”. The intention is to prevent people who are likely to experience difficulties from falling into rent arrears.

Claimants who are likely to have difficulty managing their financial affairs are referred to as ones that require safeguarding. Some claimants may want to be classed as such simply because they would rather have payments made direct to their landlord. However the safeguarding arrangements cannot be used to circumvent the fact that there are no provisions for tenants to request direct payments because it is convenient or they would prefer it.

In most cases, the council will ask for evidence from professional bodies such as doctors, social workers, probation officers et al. to establish that it is appropriate to make payments to the landlord under the safeguarding provisions.

One of the aims of the HB Reforms is to encourage tenants to take responsibility for their rent payments and the council must balance the provisions to pay the landlord directly with the need to promote the aims of the Housing Benefit Reforms. The phrase 'is likely' means that there must be a degree of certainty that the tenant will be unable to manage their affairs. In order to pay a landlord direct under the new arrangements, it is not sufficient to conclude:
- That there is a possibility that the tenant may have difficulty managing their affairs; or
- That there is a risk that tenants in certain circumstances may be unable to manage their affairs.

Each case therefore needs to be investigated when considering representations that a tenant is likely to have difficulty managing their affairs. Similarly, the council has to distinguish between claimants who choose to manage their finances in a less than organised way and those that genuinely have difficulty managing their affairs.

Indicators that a claimant may require safeguarding

Any instance where a claimant may need safeguarding will have to be considered on its merits and it will not be sufficient to identify a claimant as safeguarded simply because they meet prescribed criteria. However, detailed below are the sorts of factors that should be considered and may indicate that safeguarding would be appropriate.

This is not intended as an exhaustive nor prescriptive list.

Where representations are made but with no actual evidence of a requirement for safeguarding (for example, where the claimant's landlord has been hitherto been in receipt of direct payments) the council will need to consider an individual's current circumstances in order to determine whether they satisfy the safeguarding test.

Learning disabilities, ranging from mild to severe

People with severe learning disabilities are likely to have an appointee to deal with their financial affairs or be resident in Supported Accommodation. It is therefore likely that the council will only need to consider people with slight learning disabilities.

Medical conditions that are likely to seriously impair a person's ability to manage on a day to day basis

Such claimants could include those such as mental illness (schizophrenia, depression, age-related mental deterioration such as early stages of Alzheimer's disease or senile dementia).

There are also physical conditions which may make it difficult for a person to manage their affairs. In these situations the council must consider how a claimant’s other financial affairs are conducted, i.e. a person’s care worker may collect their benefits from a post office by signing the proxy arrangements, paying their bills at the same time. This arrangement would not be possible for receipt of LHA.

However, a person with severe mobility problems may have overcome these and be able to deal with their own financial matters and could therefore deal with paying their rent.

Where the safeguarding test is satisfied and payments are made to a landlord on the grounds of a medical condition, the person’s situation will be monitored on a periodic basis to see if they have improved depending on the actual condition.

Illiteracy

This could be difficulty in reading and writing or financial illiteracy. In order to determine whether a person may be illiterate in either respect, the council may first look at how a person’s current claim (or any other recent claim) was made. The application may have been completed by another person on the claimant’s behalf or may have been completed by the claimant with incomplete information. Enquiries may have taken a longer period than is normal to resolve and this should be taken into account if this is due to the claimant’s illiteracy.

However, a person who is unable to complete their claim form may be capable of dealing with their finances or have adequate support in place to help them when needed. Representations may be made by either the claimant or a third party. In any event further enquiries should be conducted in a sensitive manner.

Inability to speak English

Representation of language difficulties may be made by a landlord, a support group or community group. The council should consider other family members in determining whether this would make a tenant unable to manage their affairs.

Language difficulties alone are unlikely to lead to a decision that a claimant is unable to manage their financial affairs. A support worker or relative could help the tenant open a bank account and put in place a system for paying their rent on a regular basis.

Addiction to drugs, alcohol or gambling

There should be evidence from GP, hospital, care workers, social services, probation services or support organisations for these addictions and the effect this would have on the tenant’s ability to manage their financial affairs.

Severe debt problems, recent County Court Judgements or undischarged bankruptcy

In all instances the council should consider whether debt problems have affected a person’s previous ability to pay rent (based on evidence from help groups, debt advisors, creditors, courts, solicitors et al.). If so, then it may be that the claim should be considered under ‘unlikely payers’.

Inability to or difficulty in opening a bank account

This in itself should not mean that a person cannot manage their own financial affairs. While it may be that somebody has difficulty opening a bank account most people will be able to open up and manage basic bank accounts.

In cases where the tenant is adamant that they cannot open a bank account the council should ask for letters from banks and evidence from money advisers.

Where a tenant has an existing bank or building society account, but indicates an unwillingness to receive LHA direct, they should be encouraged to open a separate bank account for the purposes of receiving LHA.

Claimants with appointees

Claimants who have an appointee appointed to act on their behalf because they are "unable for the time being to act" should not be considered as requiring safeguarding under LHA as the appointee looks after their financial affairs.

When the claimant ceases to have an appointee the decision on whom to make payment to will need to be reconsidered taking into account why there is no longer an appointee.

Probability that the tenant will not pay rent

Introduction

The Housing Benefit (Local Housing Allowance and information sharing) Amendment Regulations 2007 amends Regulation 96 of the Housing Benefit Regulations 2006. These regulation set out the circumstances where payment of Rent Allowance may be made direct to a person’s landlord.

New Regulation 96(3A)(b)(ii) states that payment of a rent allowance to a person’s landlord may be made where the authority considers that it is improbable that the claimant will pay his rent.

The intention is to protect claimants who are likely to act irresponsibly from falling in to rent arrears. One of the aims of the HB Reforms is to encourage claimants to take responsibility for their rent payments and this needs to be balanced with the need to promote the aims of the HB Reforms.

The phrase 'is improbable' means that there must be a degree probability that the tenant will not pay his rent. It is not sufficient to conclude that there is a possibility that the tenant may not pay his rent. Many tenants, regardless of their benefit status, carry a risk that they may not pay their rent. Each case needs to be investigated when considering representations that it is improbable that the claimant will pay his rent.

The council needs to distinguish between tenants who are genuinely unlikely to pay their rent and those who may claim that they are not likely to pay their rent because they would prefer not to take responsibility.

It should be assumed that, unless evidence to suggest otherwise is received, that all claimants receiving LHA will pay their rent and consequently payment will usually be made to the tenant unless any of the other criteria for making payment to the landlord are met.

Possible indicators that a tenant is unlikely to pay their rent

Where a representation is received, but without evidence that a person is unlikely to pay their rent, payment will be made to the claimant.

The actions taken by the claimant once this payment has been received may be treated as further evidence to determine whether a claimant is likely to pay his rent.

The credit history could be a useful indicator, arrears of utility charges, letters from the claimant’s bank, evidence of unpaid standing orders or direct debits could all indicate that the claimant does not manage his money sufficiently well and is unlikely to do so in the future.

Records of previous claims and these, together with information held by other Departments, such as Council Tax or the Overpayments Team, may show persistent arrears or a failure to keep to arrangements. These may indicate that the tenant may be considered to be unlikely to pay his rent.

The existence of County Court Judgements would not automatically render a person unlikely to pay, however these would be taken into account along with other evidence. Consideration should be given to the reason the judgement was gained. Greater credence should be given to those that were awarded as a result of non-priority debts.

A history of rent arrears is more relevant as this indicates that the tenant may not place great importance on paying their rent, the consideration that we are required to make is whether a person is unlikely to pay their rent, not whether a person has a history of failing to make other payments or has experienced debt problems.

Where a person has always paid their rent but has other financial problems, payment will be made to the tenant as there is no evidence to suggest that he will not pay their rent. However where a person has not previously had a rental liability and so cannot have failed to pay their rent then other arrears or debts should be taken into account.

In situations where Housing Benefit has always been paid direct to the landlord other financial dealings should be taken into account. A tenant who would pay their rent but may prefer to have LHA paid to their landlord may present himself or herself as having no intention to pay their rent to their landlord. In these situations it would be difficult to justify not acting on the claimant’s information and the consequences could damage the landlord financially.

Persons who have been appointed to act on behalf of a claimant who is "unable for the time being to act", should not be considered as unlikely to pay. Nor can the claimants they act for, until such time as they cease to have an appointee acting for them.

Dealing with representations

Claimants

Depending on the details of the request, it may be appropriate to ask a visiting officer to collect supporting evidence where the safeguards policy is being applied. Alternatively, the claimant should be asked to provide information themselves or give authority to contact other agencies such as GPs.

In the event that the claimant is not able to answer questions appointee action will be considered.

It would be unusual for the claimant himself to suggest that it is improbable that he will pay his rent. It is more likely that such evidence will be provided by a landlord (past or present) or a third party who can demonstrate experience or knowledge of the claimant’s behaviour. In a number of instances this will be supported by information already held by the council.

Friends and family of the claimant

All representations must be in writing supporting by detailed reasons and, where available, evidence of why the claimant is considered likely to have difficulty managing their affairs or is unlikely to pay their rent.

Information provided by relatives and friends may provide useful information which may support other evidence but will not usually be accepted without other evidence.

It should be noted that it may not be possible to discuss the circumstances of the claim with family and friends unless the claimant has given consent.

The landlord

All representations must be in writing supporting by detailed reasons and, where available, evidence of why the claimant is considered likely to have difficulty managing their affairs or is unlikely to pay their rent. It will not be possible to conclude from the landlord’s representations alone that the tenant should be treated as vulnerable or unable to manage paying their rent.

A past or present landlord will have first hand experience of whether a tenant has paid their rent in the past. A tenant who has persistently failed to pay their rent without a good reason should be considered to be unlikely to pay their rent to their landlord.

However, there may be good reasons why the claimant has not made rent payments such as a dispute with the landlord over repairs. The Council should not get involved in such disputes but make a decision on payment.

Welfare groups, money advisors, Social Services, GPs, Probation Officers

All representations must be in writing although they are likely to arise because the tenant has contacted the welfare group or money advisor for assistance.

The representations should be supported by evidence to show that the tenant is likely to have difficulty managing their affairs or is unlikely to pay their rent. This could include a history of the organisation helping the claimant with earlier financial difficulties.

Persons who have sought money advice, while acknowledging that they need support, may be unable to deal with their new responsibilities. Advisors dealing with claimant’s debt problems will have knowledge of their financial management skills and their evidence will be useful.

Jobcentre Plus, Pension Service staff

Representations must be in writing and must detail the reasons why the tenant is deemed to be likely to have difficulty managing their affairs or is unlikely to pay their rent. Where appropriate, evidence should be provided. In most cases it will still be necessary to interview the tenant.

Social Services, GPs, Probation Officers

Representations must be in writing and must detail the reasons why the tenant is deemed to be likely to have difficulty managing their affairs.

Appropriate evidence should be provided. In most cases the person/organisation making the representation will supply this, but if they do not it will need to be requested.

Possible sources of evidence

An interview might resolve any further questions in the absence of evidence or where the validity of evidence provided does not satisfy the decision maker that the tenant is unable to manage their financial affairs. The record of the interview would be treated as evidence and may be carried out in person either at the tenant’s home, in the office or over the phone.

The following list is not exclusive, exhaustive or prescriptive and any such evidence should demonstrate that the tenant would be unable to manage their financial affairs.

Evidence that would support a decision to apply the safeguards policy includes:

- Learning disabilities letter from support provider
- Letter from doctor
- Letter from social worker
- Interview record from visiting officer or reception staff
- Medical conditions letter from GP
- Letter from hospital
- Letter from GP
- Letter from support worker
- Letter from hospital
- Letter from care worker
- Letter from social services
- Court order demonstrating severe debt problems
- Letter from solicitors
- Letter from help groups
- Letter from creditors
- Undischarged bankruptcy Court Order
- Letter from a bank showing that the claimant has been refused a bank account
- Letter from money advisor.

It should be noted that a formal representation is not always required, if there is enough information available for a decision to be made. However the council will need to consider the age of the information.

Decisions

Making a decision

The council must decide when there is sufficient information and evidence to make a decision on safeguarding. Payment of Housing Benefit should not be delayed pending such a decision and the regulations allow payment to be made for up to eight weeks while a decision about safeguarding is made.

Where it has not been possible to satisfactorily establish the facts of the case because the claimant has failed to co-operate in the enquiries that have been made, the council must decide whether or not that failure to co-operate in itself demonstrates a need for safeguarding.

In some cases, it will be evident whether the person is vulnerable and in others it will be necessary to reach a decision by balancing the facts.

Claimants deemed to be in need of safeguarding should be encouraged to seek support and advice, either elsewhere in the council or from voluntary groups, to enable them to be in a better position to manage their financial affairs. This could be anything from money advice to tackling more fundamental underlying issues.

Where a representation is made that a tenant is unlikely to pay their rent on the basis of existing rent arrears, the following factors should be considered:

- If the tenant is eight weeks or more in arrears Regulation 95(1) applies and payment should be made to the landlord under the statutory provisions
- Wwhere the arrears arose wholly during a period for which Housing Benefit has not yet been paid, then the first payment only should be made to the landlord and future payments to tenant unless there is evidence that the claimant requires safeguarding or is unlikely to pay their rent. It may also be appropriate to continue payments to the landlord where there is a further unavoidable delay in the claimant opening a bank account
- Where arrears have arisen over a period when Housing Benefit did not meet the full rental liability, and the tenant was not able to make up the shortfall, the tenant can not automatically be assumed to be unlikely to pay his rent
- A tenant who has failed to use Housing Benefit Payments to pay their rent in the past may be assumed to be unlikely to pay his rent unless good reasons for non payment of rent are provided
any arrangements that the tenant has made to pay his rent.

Where there is insufficient evidence that it likely that a tenant will fail to pay their rent, payment should be made to the tenant. What the tenant chooses to do with this payment will be considered as evidence in determining the likelihood that future payments will be used to pay the rent.

Notification of decision

All persons affected by the decision should be notified in writing of the decision and where applicable reasons for the decision must be given. Appeal rights should be clearly stated.