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LHA - SAFEGUARD POLICY
1 BACKGROUND
In January 2006 the Government
published the welfare reform green paper A new deal for
welfare: empowering people to work which detailed proposals
for Local Housing Allowance (LHA). This is a flat rate amount of
Housing Benefit based on a person’s household and the location of
their home and affects tenants renting from private sector
landlords who make new claims for Housing Benefit from April
2008.
One of the Government’s
policy objectives in introducing LHA is to increase the personal
responsibility of tenants claiming Housing Benefit. Under existing
arrangements most Housing Benefit for private sector tenants is
paid direct to landlords and the Government wants tenants to take
direct responsibility for managing their housing costs by making
payments direct to them.
The Council is committed
to work with local banks, building societies, and credit unions to
help financially disadvantaged residents open basic bank accounts,
and thereby encourage financial inclusion. Helping residents to
open basic bank accounts will assist with the following
objectives:
- to streamline the application process
- to eliminate duplication for customers
- to provide assistance to vulnerable groups
who have traditionally been financially excluded
- To provide a safer and faster way to receive
Housing Benefit
- To reduce the cost of paying Housing
Benefit.
The Council has produced
an information pack to assist customers with the opening of basic
bank accounts and all staff made aware of the Council's objectives
in promoting financial inclusion.
2 PURPOSE
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.
3 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; or
- 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).
3.1 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.
3.2 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.
4 SAFEGUARDS
POLICY
4.1 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.
4.2 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.
4.2.1 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.
4.2.2 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 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.
4.2.3 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.
4.2.4 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.
4.2.5 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
affect this would have on the tenant’s ability to manage their
financial affairs.
4.2.6 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’.
4.2.7 Inability to or difficulty in opening a bank
account.
This in itself should not
mean that a person cannot manage their own financial affairs.
Whilst 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.
4.2.8 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.
5 PROBABILITY THAT
THE TENANT WILL NOT PAY RENT
5.1 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 the 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.
5.2 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 or 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.
6
Dealing with representations
6.1 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.
6.2 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.
6.3 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.
6.4 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, whilst 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.
6.5 Jobcentre Plus, Pension Service
staff et al.
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.
6.6 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.
7 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 not 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
- illiteracy letter from support worker
- 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 that means a decision can be made, however
the Council will need to consider the age of the information
8
DECISIONS
8.1 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 whilst 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 demonstrate 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
- where 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 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.
8.2 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.