UC deductions for under occupation

Have you looked at the UC Impact Assessments on DWP website?  There is one specific to under occupation in social housing sector.  These are not always the most reliable source of information but this one includes projection that average reduction will be £13 per week.

Hi Pheebs,

It’s the intention from October 2013 for all new claims for Housing Benefit to be paid as Universal Credit, and I don’t think there’ll be (or there is supposed to be) a situation where somebody would receive Housing Benefit AND Universal Credit.

Presumably, where somebody is receiving, say, partial Housing Benefit prior to October 2013, loses their job after the introduction of Universal Credits and has to claim Income Related Job Seekers Allowance as UC, their Housing Benefit will be absorbed into UC. But I don’t know.

However, to hopefully answer your question, I haven’t heard of plans to penalise people twice for ‘under occupation’, but if somebody’s in receipt of Universal Credit and they go over the £500 benefit cap, the difference will be subtracted from their housing costs. So, in theory somebody could have housing costs for rent reduced twice- once for under occupying and once because they’ve exceeded the benefits cap.

If anybody has heard anything different, or I’m wrong, please tell!

Lee Forrest

Thank you both, that’s really useful.

Kind regards,
Pheebs

Although new claims (or ‘substantial’ cic’s) will see help with housing costs move from HB system to UC from October 2013, it is important to address the impact of under occupation on claims from April 2013.  We are already raising awareness with our residents and also with customers who are seeking to be re housed and opting for example a 2 bedroomed property as no 1 bed available.  Not only should you prepare customers for this change, there is a need to advise on how long this restriction will last for them personally.  As it starts to be applied to social tenants it will affect everyone below pension credit age/srp age for women which will be under 61yrs and 5 months at that point.  This moves every 2 months so it is necessary to have the timetable to hand. Agree with previous reply, the restriction will be on the housing credit of UC.  But equally, the sanctions for non compliance that will be applied to the income credit part will leave the housing credit exposed having to be used to put food on the table.  If the benefit cap of £500 is applied, and this can easily happen with a household with a couple and 4 children ,there could be a double whammy if the family are also under occupying because of the children’s age/gender. It does not need to be a high rent, we did the calculation on a rent at £80 per week.  Another point to note is the benefit cap will be calculated by the LAs from April 2013 and applied to housing benefit.

Draft regs for UC Housing element, regulation 17 and 18. Sorry for the layout - it’s a cut and paste! Draft regs UC Housing attached

Restriction of amount of housing costs element
17.
—(1) The amount of the housing costs element resulting from any determination under regulation 14 may be restricted under paragraph (2) or (3).
(2)
Where the Secretary of State considers that the amount determined in respect of a claimant’s liability to make category A, C or D payments is greater than it is reasonable to meet by way of the housing costs element, the Secretary of State may determine that the amount is to be restricted to such amount as the Secretary of State considers is appropriate in the claimant’s case.
(3)
If any of the conditions specified in paragraphs (4) to (6) are met, the amount determined in respect of a claimant’s liability to make category B payments is to be restricted to the amount which the claimant or (in the case of a joint claim) the joint claimants would need to obtain suitable alternative accommodation (but this is subject to regulation 18).
(4)
The first condition is that the accommodation, excluding any part which is let, is larger than is required by—
(a)
the claimant or (in the case of a joint claim) the joint claimants,
(b)
family members, and
15
(c)
any foster children,
having regard, in particular, to suitable alternative accommodation occupied by a household of the same size.
(5)
The second condition is that the immediate area in which the accommodation is located is more expensive than other areas in which suitable alternative accommodation exists.
(6)
The third condition is that the amount of category B payments for which the claimant is liable exceeds the amount that would be payable in respect of suitable alternative accommodation in the area.
(7)
In determining whether the conditions specified in paragraph (4) to (6) are met, no regard is to be had to the capital value of the accommodation.
Cases in which restriction does not apply
18.
—(1) Regulation 17(3) does not apply where it is not reasonable to expect a claimant to seek alternative cheaper accommodation, having regard to—
(a)
the availability of suitable accommodation and the level of housing costs in the area, and
(b)
the circumstances of—
(i)
the claimant or (in the case of a joint claim) the joint claimants,
(ii)
family members, and
(iii)
any foster children.
(2)
The circumstances referred to in paragraph (1)(b) include, in particular—
(a)
the age and state of health of any of the persons mentioned in that provision,
(b)
the employment prospects of the claimant or the joint claimants, and
(c)
where a change in accommodation is likely to result in a change of school, the effect on the education of any family members or foster children.
(3)
Regulation 17(3) does not apply for the initial period—
(a)
if the claimant or (in the case of a joint claim) the joint claimants were able to meet the financial commitments for the accommodation when the commitments were entered into, and
(b)
if, and so long as, they use their best endeavours to obtain cheaper accommodation during that period.
(4)
The initial period is—
(a)
the first 26 weeks of any period for which the claimant’s award of universal credit includes the housing costs element, and
(b)
the next 26 weeks.
(5)
Where in the course of any such 26 week period—
(a)
an award of universal credit ceases to include the housing costs element in respect of a claimant for a period of 12 weeks or less (“the relevant period”), and
(b)
the relevant period falls immediately between other periods in respect of which the housing costs element is included in an award,
the claimant is to be treated as if the housing costs element had been included in an award throughout the relevant period.

For those, on low rents, with children and who are working (full or part-time) there is a strange buffer effect within UC because of the way earnings disregards link to housing costs.  This means that as their rents rise, or fall, within a limited range there is very little effect on their disposable income.  I go into this in a bit of detail in my new modelling at http://blog.cix.co.uk/gmorgan.

Attached :-)

When I was reading the regs, I also thought that there was the possibilty of a double penalty - if a tenant has an adult child living with them will they both have the Housing element of UC reduced AND have a non-dependant deduction applied??

Yes, if the property is still under occupied there would be a reduction and then a deduction for the non dep.

Phil, also meant to thank you posting draft regs and the opportunity to seek exemption from restriction….although the reduction will be applied automatically if under occupying, there will be the need (if these remain unchanged) to assist customers to secure exemption. Great to see the info on overlaps, absence etc., again, lets hope no changes. The only worry I have by including the exceptions it causes UC to become complicated and this was not the Governments intention so will these ‘complications’ pass to LA., to administer? They have already indicated higher charges linked to services may be scrutinized and paid by LA’s benefit section.

Further UC regulations attached for conditionality, requirements and sanctions to be added to those posted above
Please note that along with the other regs posted they are ‘illustrative’ and not complete or final. I understand that they have been placed in the House of Lords Library - don’t ask me how you’d get direct access - I don’t suppose turning up with a library card would do it! There has been some circulation as part of wider consultation, but I don’t think that they’re anywhere else on-line yet.

I can see a prospect of many vulnerable clients being hit by escalating sanctions that can potentially run for 1095 days… Cameron/Osbourne have it right when they say benefits won’t be an easy lifestyle option, crime will be much easier!

Having accessible effective welfare rights advice and representation is going to be more vital than ever, so we need to make sure that local policy makers and budget holders are aware of the impact and the demand that will be placed on other services (housing, social work, criminal justice etc)

I hope I’m reading this wrong but it seems to me that the exemptions from the under occupying reduction do not apply to Social Housing but only to mortgages.  Reg 18 states that Reg 17(3) does not apply in the particular circumstances.  Reg 17(3) is Category B payments while Reg 17(2) covers Cat A, C and D payments which is rent in it’s many forms.

To me this reads that those with mortgages are going to be treated differently for Housing Costs and get time to make alternative provision

Thanks Derek!

You’re right about the applicability of 17(3)-(6). The one to watch is 17(2). I would like to think they just haven’t worked the detail of this one out yet.

At the moment there are 3 types of housing ‘capping’ in force or being looked at.
Mortgage interest support limitation - by amount, time in receipt, size, expensive etc.
Rent Allowance - appropriate size, LHA, CPI, high rent capping
Rent Rebate - proposed 13%, 23% extra bedroom limit.

The Bill is putting in place provisions for limits for the current system and for the post UC situation and, frankly, hasn’t done so very well.  The Government keep saying that everything will be sorted out by regulations.  My guess is that there will a pile of government amendments to tidy things up at the report stage.

What I’m being told is that the exemptions for under-occupation are still being thrashed out. The gist so far is that over PC age and vulnerable people whose property has been substantially adapted will be exempt -ie not a rail but something akin to a stairlift, widened doors for wheelchair etc. Vulnerable has yet to be defined. The most mooted suggestion is link to DLA/PIP. My problem with that is that an adaptaion can lead to a person not needing attention from another person, so even where a person relies on an adaptation they may not get DLA/PIP. Also may not take in people with mental health problems who need to be near relatives/friends…

http://www.24dash.com/news/housing/2011-12-09-Spare-bedroom-tax-could-cost-social-tenants-1-400-a-year-NHF

“the spare bedroom tax” looks like it will be quite expensive for social tenants.