Leaseholder - service charges - 9 month wait??

Hi

I am dealing with a vulnerable client who is a leaseholder. He only has to pay £70 a month for service charges. I understand that some SC are eligible and some may not be. However, I have supplied DWP with the breakdown and they have just come back saying he needs to wait 9 months.

I know this is the case with mortgage payments but I am sure I have had another case where SC were paid straightaway. That case was some while ago now and I cannot recall all the finite details.

I have scoured guidance and the Shelter book but nothing about the 9 month wait for SC. UC are making too many mistakes with housing costs at the moment with a lot of my cases, so I do not want to just take what they are saying as fact.

Can anyone help please?

Thanks

Service charges are the only owner-occupier payments that UC will cover these days and yes there is a 9-month wait: see para 5 of Schedule 5 to the UC Regs.

The only possible way out that is if the lease is a shared ownership lease, in which case the charges would be covered from day 1 as renter’s housing costs.  But a conventional long lease is covered by owner’s housing costs under Schedule 5 - after nine months.

The difference with mortgage payments is that they are covered by a separate scheme outside of UC, while service charges are still funded by UC.  But both are subject to the nine month wait.

UC Regs Schedule 5 (Housing Costs Element For Owner Occupiers) is your starting point

After the coming into force of the Loans for Mortgage Interest Regulations, paragraph 3 of Schedule 5 now provides

“Relevant payments” for purposes of this Schedule

3.—) “Relevant payments” means one or more payments which are service charge payments.]
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) “Service charge payments” is to be understood in accordance with paragraphs 7 and 8 of that Schedule.

” That Schedule” referred to   in paragraph 3(3) is Schedule 1

In other words, mortgage interest payments are no longer relevant to Schedule 5

We now come to the crux of the matter and that is provided by paragraph 5 of Schedule 5 and its not good news because paragraph 5 provides

No housing costs element under this Schedule for qualifying period

5.—(1) An owner-occupier’s award of universal credit is not to include any amount of housing costs element calculated under this Schedule until the beginning of the assessment period that follows the assessment period in which the qualifying period ends.

(2) “Qualifying period” means a period of—

(a)in the case of a new award,  consecutive assessment periods in relation to which——
(i)the owner-occupier has been receiving universal credit, and
(ii)would otherwise qualify for the inclusion of an amount calculated under this Schedule in their award;

(b)in any case where an amount calculated under this Schedule has for any reason ceased to be included in the award,  consecutive assessment periods in relation to which the owner-occupier would otherwise qualify for the inclusion of an amount calculated under this Schedule in their award.

(3) Where, before the end of a qualifying period, an owner-occupier for any reason ceases toqualify for the inclusion of an amount calculated under this Schedule—

(a)that qualifying period stops running; and
(b)a new qualifying period starts only when the owner-occupier again meets the requirements of sub-paragraph (2)(a) or (b).