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Bedroom tax and use and occupation charges

ASH
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Should you be charged bedroom tax on use and occupation charges?

HB Anorak
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Yes, what matters is to whom the charges are payable. If it’s a social sector landlord the bedroom tax applies as it would to conventional rent payments.

In the case of UC, as opposed to HB, that’s assuming you can get use and occ charges paid at all, the policy on that is still rather vague

ASH
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Thanks.  It is UC and there has been no problem getting the charges paid just a 25% bedroom tax.  It looks as if we are going to have to go for a DHP.  If it had been HB we could have argued the bereavement exemption.  My client is waiting to be rehoused following the death of the tenant who was over pension age

tbidmead
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HB Anorak - 31 December 2019 08:58 AM

[...]In the case of UC, as opposed to HB, that’s assuming you can get use and occ charges paid at all, the policy on that is still rather vague

Hijacking this thread to ask if you know where the vagueness is coming from?

The last official word I had seen was the House of Commons briefing which suggested the construction of the UC regs was intended this way and they were intentionally excluded.

I am however aware of many cases where they are being paid.

I am obviously glad that this is keeping people housed however am concerned that in such cases, these are actually overpayments which will work their way to the surface at some point in the future. Perhaps due to the UC computers/system not recognising (or failing to ask for sufficient information to recognise) mesne profits when verifying housing costs?

I haven’t seen this side of things so if anyone can shed any light, that’d be great!

tbidmead
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ASH - 31 December 2019 09:47 AM

Thanks.  It is UC and there has been no problem getting the charges paid just a 25% bedroom tax.  It looks as if we are going to have to go for a DHP.  If it had been HB we could have argued the bereavement exemption.  My client is waiting to be rehoused following the death of the tenant who was over pension age

Just to check, is it possible your client has inherited the tenancy?

ASH
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- however am concerned that in such cases, these are actually overpayments which will work their way to the surface at some point in the future.


Argh - that is a terrifying thought.  My client is already struggling. 


Not sure if client can the inherit tenancy but the end point is the same as they will either move them anyway or will be rehoused due to needs.

[ Edited: 31 Dec 2019 at 10:06 am by ASH ]
Elliot Kent
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tbidmead - 31 December 2019 09:49 AM
HB Anorak - 31 December 2019 08:58 AM

[...]In the case of UC, as opposed to HB, that’s assuming you can get use and occ charges paid at all, the policy on that is still rather vague

Hijacking this thread to ask if you know where the vagueness is coming from?

It was initially said that “no specific provision is being made for mesne profits in the housing element of Universal Credit as we consider that they would be more likely to appear as rent or payments for a licence or permission to occupy.”

https://researchbriefings.files.parliament.uk/documents/SN06547/SN06547.pdf

See also: https://nearlylegal.co.uk/2018/11/universal-credit-more-woes/

Back in June, I referred in a post to ADM F2043 which sets out the DWP view that mesne profits are not covered by the regs. ADM F2043 has since quietly been deleted.

In October, there was a dump of DWP guidance onto the Parliamentary website which included guidance that U&O could be paid, however I can’t find this.

In November (and I think they have done this previously) TV Edwards threatened to JR the DWP over the discriminatory effect of the exclusion of U&O but the DWP responded by saying that the Regulations do cover U&O and the claimant was given their housing costs back.

http://www.tvedwards.com/site/news/challenge-to-dwp-decision-on-use-and-occupation-charges

The position as far as can be ascertained is apparently that the DWP think that mesne profits are not covered by the Regs but that U&O are covered because they are “payments for a licence or other permission to occupy accommodation” and therefore fall under para 2(b) Sch 1 UC Regs.

Nobody in real life tends to differentiate between the terms mesne profits and U&O so they are often used interchangeably. The difference is apparently that mesne profits are damages recovered from a former tenant for occupation beyond the end of the tenancy and that U&O represents damages recovered from someone who was never a tenant for their occupation of a property.

I am still unconvinced that it is correct to describe U&O as payments for “permission” to occupy as against damages paid for unauthorised occupation but there we are.

 

tbidmead
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ASH - 31 December 2019 10:01 AM

- however am concerned that in such cases, these are actually overpayments which will work their way to the surface at some point in the future.

Argh - that is a terrifying thought.  My client is already struggling. 

Not sure if client can the inherit tenancy but the end point is the same as they will either move them anyway or will be rehoused due to needs.

Hopefully none of this comes to pass!

The reason I asked about inheriting the tenancy is just in case your client may not be in a ‘use & occupation’ agreement with mesne profits but a tenant who has succeeded & has a rent liability & full rights to housing costs.

In such cases where tenant has succeeded I understand the council still has the right to evict if they provide alternative suitable accommodation and internally they might talk about it in the same ‘use and occupation’ terms as it will be going through similar internal processes to establish housing need, care needs, suitability of accommodation etc. despite the rights of the occupier/tenant being entirely different.

If this was the case you can ignore my general query above and scrub the terrifying thought from your memory!

tbidmead
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Elliot Kent - 31 December 2019 11:27 AM
tbidmead - 31 December 2019 09:49 AM
HB Anorak - 31 December 2019 08:58 AM

[...]In the case of UC, as opposed to HB, that’s assuming you can get use and occ charges paid at all, the policy on that is still rather vague

Hijacking this thread to ask if you know where the vagueness is coming from?

It was initially said that “no specific provision is being made for mesne profits in the housing element of Universal Credit as we consider that they would be more likely to appear as rent or payments for a licence or permission to occupy.”

https://researchbriefings.files.parliament.uk/documents/SN06547/SN06547.pdf

See also: https://nearlylegal.co.uk/2018/11/universal-credit-more-woes/

Back in June, I referred in a post to ADM F2043 which sets out the DWP view that mesne profits are not covered by the regs. ADM F2043 has since quietly been deleted.

In October, there was a dump of DWP guidance onto the Parliamentary website which included guidance that U&O could be paid, however I can’t find this.

In November (and I think they have done this previously) TV Edwards threatened to JR the DWP over the discriminatory effect of the exclusion of U&O but the DWP responded by saying that the Regulations do cover U&O and the claimant was given their housing costs back.

http://www.tvedwards.com/site/news/challenge-to-dwp-decision-on-use-and-occupation-charges

The position as far as can be ascertained is apparently that the DWP think that mesne profits are not covered by the Regs but that U&O are covered because they are “payments for a licence or other permission to occupy accommodation” and therefore fall under para 2(b) Sch 1 UC Regs.

Nobody in real life tends to differentiate between the terms mesne profits and U&O so they are often used interchangeably. The difference is apparently that mesne profits are damages recovered from a former tenant for occupation beyond the end of the tenancy and that U&O represents damages recovered from someone who was never a tenant for their occupation of a property.

I am still unconvinced that it is correct to describe U&O as payments for “permission” to occupy as against damages paid for unauthorised occupation but there we are.

Thanks Elliot. I had missed the threatened JR. This sheds a bit of light on things and quells my immediate concerns to some degree!

Charles
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Elliot Kent - 31 December 2019 11:27 AM

Back in June, I referred in a post to ADM F2043 which sets out the DWP view that mesne profits are not covered by the regs. ADM F2043 has since quietly been deleted.

According to the National Archives, this was deleted in June 2018. However, interestingly, the list of changes made in that month does not mention this change.

In October, there was a dump of DWP guidance onto the Parliamentary website which included guidance that U&O could be paid, however I can’t find this.

See here and here.

[ Edited: 31 Dec 2019 at 12:54 pm by Charles ]
Elliot Kent
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Thanks Charles - yes I think I have the dates wrong on ADM F2043 but I do remember reading it and then going to refer back to it some time later and it was gone. It is still referred to on our Shelter Legal site. and ADM F2041 still says “Subject to F2042 and F2043” despite the latter not existing so I have not imagined it.

Comparing the two deposited papers does appear to indicate that the DWP is drawing the distinction I referred to.

Daphne
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Charles - 31 December 2019 12:51 PM
Elliot Kent - 31 December 2019 11:27 AM

In October, there was a dump of DWP guidance onto the Parliamentary website which included guidance that U&O could be paid, however I can’t find this.

See here and here.

The UC guidance in the HoC library can be accessed via our resources page