Stung by the £500pw Benefit Cap, no rent being paid – Help!

by Mick Roberts

17:32 PM, 6th August 2013
About 5 years ago

Stung by the £500pw Benefit Cap, no rent being paid – Help!

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Stung by the £500pw Benefit Cap, no rent being paid – Help!

This week I have been stung by my first experience of the benefits cap. Stung by the Benefit Cap, no rent being paid - Help

One of my tenants Housing Benefit has gone down to £30pw from £159pw.

This is the cap where the Government are limiting families to £500pw of maximum benefits and all councils will have it by Sept 2013.

My tenant now gets £310 Child Tax Credit, approx £90 Child benefit & £10 Income Support with loans taken off. With Council Tax & the £30HB, we are about £500. A lot of money I know, but when they’ve had if for years, they’re used to it.

My tenant cannot understand at all that she has to pay any rent out her own pocket – so isn’t going to – so she says.

I’ve given her notice in case things get worse, as mortgages don’t grow on trees.

I don’t want her to go and she she doesn’t want to go either!

She rang me up every week for a year to get a house off me, so we are both valued to each other.

I have contacted Shelter, MP’s, Govt, CLG, Advice Centre, the Council Housing benefit and more and none of them seem to know anything whatsoever about direct payment to a Landlord when tenant is in arrears as a result of these circumstances.

The Local Authority is now saying no provision for direct payment to Landlord when in arrears.

As we all know Universal Credit are talking about direct payment to Landlord because of the big arrears they’ve been getting in trial areas. And as we all know, direct payment when LHA was introduced in 2008 was a no no,until we all moaned enough that is. Now getting direct payment is like taking candy from a baby.

However, I’m hitting a brick wall with direct payment under this new benefit cap.

I thought I was a benefit expert until this week. I’m 99% sure they will do something eventually, when enough people get evicted and moan enough, but I and many others need something positive to happen now.

My Local Authority are not interested, they seem to think it’s  funny that supercool Landlord Mick Roberts is now only getting £30pw when he was getting £159pw and in their eyes, lapping it up.

My tenant is still allowed £159pw under 4 bed LHA rate rules, but it is the benefits cap which is limiting her housing benefit payment to £30pw. Clearly this is the first thing tenants lose when going over the £500pw threshold.

Govt needs to wake up because they haven’t got the houses for for these tenants and wherever this tenant ends up she will only get £30pw towards her rent, so will be in the same boat with any Landlord.

The big families are no longer attractive!

Jeez, I wanted this to be a quick post, but if any experts reading this know more than me and can help, it would be very much appreciated.

Regards

Mick



Comments

Mary Latham

19:14 PM, 6th August 2013
About 5 years ago

I am not sure why you think direct payment will help? You would only get £30 towards the rent via direct payment because it will not alter the cap and as you have said the first benefit to be reduced when the cap is reach is Housing/LHA.

I realise that Government are way off with their expectations that tenants will suddenly learn financial skills that they have never needed before but the fact is that this is what is expected and if tenants do not quickly learn that the amount that they are allocated for rent is irrelevant and pay the rent that is due the only option a landlord will have is eviction.

Follow me on Twitter@landlordtweets

My book, where I warn about the storm clouds that are gathering for landlords is here >>> http://www.amazon.co.uk/dp/1484855337

Mark Alexander

19:33 PM, 6th August 2013
About 5 years ago

Hi Mick

I simply can't see that you have any choice other than to evict this poor tenant if she can't be persuaded of the need to pay.

I wish I could offer you a glimmer of hope. Nobody needs a crystal ball to foresee nothing but misery for both you and your tenant. She's obviously going to fight the eviction to the grim death (who wouldn't in this situation?) and I have no doubt that it will be you who comes out of this looking "the bad guy" with yet another trashed property, legal costs and rent arrears too.

I can't see how it will be any better for the tenant either. Will she live on the Streets?

Presumably the same rules will also apply to a Housing Association or the local Council too? Will they really offer her a property under these circumstances? Maybe they will if now if they can get the benefits paid direct but just imagine the impact that's going to have on your tenant! When UC comes in the Council is going to be in the same position as you, however, how many Pay Day loans and other debts will this woman have racked up by then? It's going to be a massive wake up call for your tenant whom I feel is even more vulnerable than you are right now. I wish I could help you to help her but I wouldn't really know where to start.

The best I can offer at this stage is the results of a Google search I have just done for "homelessness housing advice Nottingham" - see >>> http://goo.gl/1IFEVS
.

Vanessa Warwick

19:39 PM, 6th August 2013
About 5 years ago

You might want to contact Bill Irvine.

He is the expert on these topics and offers an advice service to landlords.

http://www.hbadvice.co.uk/landlords

Mark Alexander

19:43 PM, 6th August 2013
About 5 years ago

Reply to the comment left by "Vanessa Warwick" at "06/08/2013 - 19:39":

Hi Vanessa

Do you know if Bill is on Twitter please?

If so, what's his Twitter handle?
.

Vanessa Warwick

19:45 PM, 6th August 2013
About 5 years ago

Yes, Mark, Bill is on twitter.

His twitter name is @BillIrvine17

I have already sent him an email directing him to this thread.

I'm nice like that ... 🙂

Mark Alexander

19:53 PM, 6th August 2013
About 5 years ago

Reply to the comment left by "Vanessa Warwick" at "06/08/2013 - 19:45":

Thanks V 🙂

I owe you one (again!)

Please do all you can to help with the survey Mary is promoting too, perhaps an article on PT with the Survey Monkey link?

See below
.

Mark Alexander

19:56 PM, 6th August 2013
About 5 years ago

Adam Zeeblebum

20:43 PM, 6th August 2013
About 5 years ago

Hi Mick

Since Housing Benefit is still currently being administered by local authority Housing Benefit services (or whichever organisation the local authority may have chosen to contract the service out to), guidance on safeguarding Local Housing Allowance is yet to change. Policies on safeguarding LHA were all developed locally, but there is some general guidance from the DWP here:
http://www.dwp.gov.uk/docs/lha-good-practice-guide.pdf

However, as Mary noted, the weekly LHA would still only be £30.

A couple of suggestions of what to do about that:

If anyone in the household (including the children) has any long-term sickness or health concerns, whether that's physical or mental health, encourage them (preferably with the help of CAB or similar advice agency) to apply for DLA (for children) or PIP (for adults). A successful claim would exempt the household from the benefit cap. [At the bottom of this page https://www.gov.uk/benefit-cap there is the full list of benefits that exempt households from the benefit cap.]

The household might be eligible for a Discretionary Housing Payment, depending on how your local authority has decided to allocate those funds. It would likely only be a short-term solution - basically to plug the gap while they look for alternative accommodation, to ensure that you're not left out of pocket and the household doesn't accrue rent arrears.

Other things that might be worth looking into:

A homelessness application - the family would be considered homeless as it is not reasonable for them to remain in the property; they are in priority need; and they are unintentionally homeless. Based on what you've said, I can't see how the local authority would have any other option but to accept a main housing duty. This - given the size of the household and their financial circumstances - is going to be a very difficult duty to discharge. This may focus the local authority's mind on finding a solution to the family's current situation. The alternative - as they will be aware - may be a big bill for interim accommodation, so there may be a 'spend-to-save' consideration.

Social Services - it looks like there are six dependent children in the household. The prospect of the family becoming homeless would, I hope, be a source of major concern for Social Services. They may be able to be proactive about finding a solution, or at least support the family to take action and encourage other organisations to cooperate with that action.

Adam

Vanessa Warwick

20:52 PM, 6th August 2013
About 5 years ago

@Adam

Fantastic post! It would be great if you could come and join our discussions at Property Tribes. 🙂

@Mary/Mark

If Mary wants to create a post on PT, I would be happy to tweet it out to our combined twitter following of 25,000 and also include it in our newsletter that goes out to 9,000 members of Property Tribes....

Mark Alexander

21:11 PM, 6th August 2013
About 5 years ago

Reply to the comment left by "Mark Alexander" at "06/08/2013 - 19:56":

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