On the other side – Benefit Capped tenants and affected landlords

On the other side – Benefit Capped tenants and affected landlords

8:20 AM, 23rd March 2017, About 5 years ago 20

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Did anyone watch Dispatches: Benefit Families on Channel 4 on Monday Night?

The programme started off with single mother Karen, with 5 young children living in a two bedroom council flat in Lewisham South East London, the benefit cap has affected her by £90.00 per week. This amount is taken from her Housing Benefit award and has made her incur arrears and at risk of homelessness.

The Benefit Cap is a limit on the total amount of certain benefits people of working age can get. If the overall income i.e Child Benefit, Income Support/JSA, Child Tax Credit income is above the set threshold, the Housing Benefit is reduced by that amount.

The Benefit Cap was introduced in 2013, meaning the maximum in benefits that a claimant could claim was £500 per week for single parents and couples (with or without children) and £350 per week for single people.

The Summer Budget 2015 announced changes to the level of the benefit cap meaning that households were no longer entitled to receive more than £20,000 in benefit nationally or £23,000 for those in London.

For single person with no children £13,400 nationally or £15,410 for those in London this was implemented from 7th November 2016.

At present 88,000 UK families are affected by the benefit cap and as a result of the Benefit Cap the Government has saved £155 million, despite insisting the Welfare Reform is not about saving money, but more about empowering people to get into work. Research has shown only 5% per cent of affected households moved into work under the old benefit cap, so is it really working or as Graeme Brom Chief Executive of Shelter stated “ Pushing families into poverty as the cap has no relationship to average earnings”

The programme then went on to follow the story of Samantha another single mother with 4 young children living in a three bedroom privately rented house in Croydon Surrey, she is capped by £166 per week which is deducted from her Housing benefit entitlement, again putting her into arrears. She was keen to work, but was finding it difficult to find an employer that was sympathetic and understanding of her circumstances.

Croydon Council have identified that 1000 households have less money as a result of the benefit cap and are working with tenants that are affected by the cap by offering them employment workshops and granting them with DHPs short term to pay their rent shortfall whilst they look for employment.

Interestingly, Mark Fowler Head of Welfare, stated that the average cost to Croydon Local Authority of evicting a family is £6000. He said families are also broken down resulting in some children being taken into care, this costs the Council between £16,000 to £40,000 per child, per annum.

A further study conducted by Policy and Practice has confirmed that 123 capped families have been placed into sodtly temporary accommodation within Croydon.

In Kettering Leeds the reporter went on to speak with single mum Abbi living in a two bedroom privately rented flat with her child under the age of two. Abbi was clearly struggling and in debt and regularly seeking assistance from a local voluntary organisation.

When the cap was introduced in 2013 only 225 people were affected in Leeds, this has now risen to 1000. The Chartered Institute of Housing have also identified that 11,600 families are now at risk of homelessness.

Although, the Government have given Local Authorities £185 million to ease the impact on Welfare Reform to date only £67.5 million has been used for the Benefit Cap.

Lord Kerslake Local Government Association stated that  “Central Government are merely moving costs to local Government”

As we are aware Landlords are now are refusing to rent properties to those on benefits due to many issues caused by the Welfare Reform causing an extra strain on Local Authorities who have a duty of care to accommodate those who present themselves as homeless with children often in temporary accommodation.

When I watched the programme, I couldn’t help  notice that all three women were single, therefore the primary careers of their young children, as they were on the breadline they openly said that they simply could not afford to pay their rent. The Government is insisting that they want people to be rewarded for working and the system to be fair, but really to me it does not seem fair to both the family and to the affected person; the Landlord.

There are very limited options available to the families affected by the Benefit Cap:

  • Downsize and be overcrowded
  • If they live in London to perhaps move out, but if they have over two children they would still be affected by the benefit cap
  • Lastly to seek employment, which for someone who has not worked for quite some time may lack confidence and may have child care difficulties.

One thing for sure is the people that are affected by the benefit cap are the most vulnerable and landlords who have tenants that are affected and unable to pay the rent.

I would be interested to hear others views.

Contact Sherrelle for offline Universal Credit advice

Sherrelle is an independent consultant and is recommended by Property118 for landlords who require professional advice and assistance in regards to dealing with Universal credit related matters


Comments

by Old Mrs Landlord

6:39 AM, 25th March 2017, About 5 years ago

Reply to the comment left by "Jonathan Clarke" at "25/03/2017 - 01:20":

And we mustn't forget you are yourself no doubt a taxpayer contributing to these maladministered funds. The nebulous "taxpayer" being referred to here is you and me and we're about to contribute a lot more.

by Jonathan Clarke

8:14 AM, 25th March 2017, About 5 years ago

Reply to the comment left by "Old Mrs Landlord" at "25/03/2017 - 06:39":

Yes indeed it is . My tax bill will rise about 5 fold just on sec 24 but you are right I am paying also as well on top of this behind the scenes for this mal administration of funds . I am right in the middle of it and can see its flaws every day

The system is rotten to the core

I am taking active steps on a rolling programme to reduce my tax bill from 5 fold to about 2 fold. In order to do that I have in the last year issued 5 sec 21`s . 15 more will follow over the next 3 years. If sec 24 was not retrospective I could save some tenants . If LHA rates were not frozen and HB caps not introduced so ferociously I could save some tenants. But councils and governments are deaf to my view

But the more I think about it the tenant and taxpayer is squeezed and does not gain. I simply shift part of my tax burden to another taxpayer which is then spread out to fund equally and silently now increased budgets for Council Tax / NHS / Police / Social services etc

The Human Cost.

I have had one tenant attempt suicide 3 times as a result of being served a sec 21
This was her home for life. I thought it would be to until the government turned on me

Another tenat is being told to go to work. She suffers from agoraphobia, anxiety, depression, diabetes . She has an unbiblical hernia and a nerve entrapment. She has doctors notes and records to prove all this. In the last year she has lost both grandparents and has no close family support except for her partner . If she goes out she has panic attacks. She has a young child. Shes on the edge every day.

The council still say she should apply for jobs. She cant leave the house without someone and cannot even wash her own dishes or change her child's clothes due to the nerve entrapment - but they suggested work in a warehouse! Crazy . Her LHA has just been stopped along with all her benefits. She has no money . She goes to food banks . She used to work but had to give up due to these health issues. Her life is in crisis. The sec 21 expires in 6 weeks . The clock is ticking

Thankfully on this one the excellent diligent welfare officer at the council appears to have made the right proportional decision. This ladies home will be secured now for 12 mths following a negotiated settlement with me. The taxpayer will still pay and pay an additional amount to keep me on board. Basically I am being bribed. She has a stay of execution for 12 mths.

But for the suicidal lady - not so good - because of the rigid rules the welfare dept say they cannot help her. She cannot read or write and the whole system just confuses and baffles her. So I am pushed to evict to save my own skin because of Sec 24 but there is no one there to save her skin. I am writing a letter of support on her behalf. I will copy the MP in

My council will not re house on the strength of a sec 21 despite specific instruction from the housing minister to do so unless there is good reason not to. The Sec 21 is a legal valid notice. Its MY house and i am selling it to pay my tax bill . That`s my good reason. Two months notice is perfectly adequate for the council to put measures in place to rehouse The council acknowledge that but still turn a blind eye to the guidance.

There is no duty of care shown . Its verging on a criminal act of neglect.

by Mick Roberts

8:28 AM, 25th March 2017, About 5 years ago

Very good words Jonathan.
If we are gonna' benefit cap, do it on new people. Not the existing ones.

Apparently Travelodges are getting full up & down the country with Benefit Cap tenants & UC tenants, that's costing much more than paying their £130pw in 3 bed house of mine.

by Old Mrs Landlord

8:45 AM, 25th March 2017, About 5 years ago

Reply to the comment left by "Jonathan Clarke" at "25/03/2017 - 08:14":

The cases you cite are heart-rending Jonathan and I'm sure they are being replicated up and down the country. However, I did have to chuckle at the "unbiblical" hernia! I'm pretty sure all hernias are unbiblical as there's no mention of them in the Bible (haemorhhoids are about the closest reference I can think of), so I'm reading it as umbilical. The fact is councils have little choice about this. They are obliged to implement central government leglislation, not just in housing but higher minimum wage and pension contributions for their staff, the needs of an ever-increasing elderly population etc., etc., while the government contribution to their funds is slashed year on year. Every budget day the Chancellor stands up and tells us he is achieving "efficiency savings". We all suffer the fallout, except of course politicians, but so much of the burden is falling on those who are already at the bottom of the heap.

by CARIDON LANDLORD SOLUTIONS

19:05 PM, 25th March 2017, About 5 years ago

Reply to the comment left by "Mick Roberts" at "25/03/2017 - 08:28":

I totally agree Mick.
Temporary accommodation is much more expensive than paying the rent shortfall.

by CARIDON LANDLORD SOLUTIONS

19:10 PM, 25th March 2017, About 5 years ago

Reply to the comment left by "Jonathan Clarke" at "25/03/2017 - 01:20":

Very good point Jonathan. Some tenants are very work shy I agree but it seems everyone is being punished for those type of people.
There needed to be some changes as some people abuse the system.
But the way the benefit Cap and Universal Credit have been administered is merely thoughtless.

by Luk Udav

14:42 PM, 26th March 2017, About 5 years ago

Reply to the comment left by "Sherrelle Collman" at "25/03/2017 - 19:10":

Sorry Sherrelle, it's not "thughtless", it's a deliberate government policy of the last 7 years of blaming others for the effects of their own incompetence, malice.and extreme right wing neoliberalism. Austerity wasn't inevitable - look at what Iceland did - but was a doctrinaire response. It's been accompanied by blatant lies and deliberate divisiveness. But they are running out of people to blame when the Tories even attack their natural allies, for instance landlords with insane legislation.
As Jonathan sees, there are always going to be a small percentage of people who can't manage throuh no fault of their own. There are also going to be another percentage who will play every game to cheat the system.. I think most sensible people can rapidly distinguish the former from the latter, but the legal system can't in a timely manner.

by Mandy Thomson

17:15 PM, 26th March 2017, About 5 years ago

Reply to the comment left by "Jonathan Clarke" at "24/03/2017 - 15:37":

I agree with the logic behind the benefit caps to single parent families (having children in this country is a choice, and why should the state support large families at the expense of the disabled and elderly), but I do not agree about the way it's being implemented. For a start, it should not be retrospective, and there should have been an aggressive campaign to educate the public well ahead of the policy's implementation.

by Darlington Landlord

17:55 PM, 26th March 2017, About 5 years ago

Reply to the comment left by "Mandy Thomson" at "26/03/2017 - 17:15":

I agree

by Ian Simpson

7:04 AM, 27th March 2017, About 5 years ago

Thank you Jonathan for your words of logic and sense in this country, where the laws relating to the PRS are nothing short of madness. Sadly, they will do little to change anything. As you say, perhaps the harsh measures will encourage single Mums to have less children going forwards, but it all seems rather hopeless and rather late. I can see you have a deep empathy for your tenants, whilst trying to survive this madness and make your business work, to feed your family. If only your logic and sentiments were more generally known, and acted upon by government, the whole situation would not be in such a mess.


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