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

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

17:32 PM, 6th August 2013, About 8 years ago 113

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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

by Jonathan Clarke

20:25 PM, 13th August 2013, About 8 years ago

@ Mick - All mine are in Milton Keynes - The council is notoriously inefficient. They are meant to have a 10 day turnaround for e mails. I`ve waited 2mths before. They hardly ever inform me of suspension but every time I complain the lady just says - sorry i will raise it in my next team meeting. It still doesn`t sink in and nothing changes.

We were promised a landlords portal about a year ago so we could track claims on a live system. With average wait time on a phone call of about 30 mins I couldnt wait. But no sign of it yet so Ive given up hope. If I`m really throwing my toys out i just copy in the chief execs p.a. That works wonders and it cuts the 2mths down to about 4hrs to get an answer as it filters down the management chain.

@ Mark - Yes I was aware and have served them at the start before but I just got lazy and didnt on this one. My own fault. Ive never had to invoke one. In fact 14 years down the line I`ve never needed to evict anyone. Things may have to change now my end unless the government see sense .

This tenant is a good one but my hand is forced. The kids will suffer unfortunately when they are placed in a B&B 15 miles away far far away from their schools and extended family. Social cohesion is simply not a government priority. Cutting the welfare bill is. The knock on effect is the health, social services, criminal justice and prison budgets will have to increase

by Mark Alexander

21:14 PM, 13th August 2013, About 8 years ago

Yep, I feel your pain. I've only had to seek possession orders twice in 24 years and on both occasions I'd not served s.21 early, Sod's law hey?

Re your tenants, I can't see how this scenario will reduce the welfare bill at all, probably more like add a naught to the bill in this case with emergency B&B, taxis to school for the kids paid for, assuming they are not placed in foster care of course which is even more expensive!
.

by Mick Roberts

7:05 AM, 14th August 2013, About 8 years ago

Yeah, I presume he is not expert expert on possession like that Paul from Landlord action.
I’ve been getting updates on that locksmith thread as made a comment.

Yeah, even that 10 day turnaround is a joke for emails-Emails were originally mean’t to be quicker & not having to wait for the post.
Yeah & me too, that suspension thing’s become a joke since the cutback-I have it off high authority because of the cutbacks, the processors just aren’t having time to get around to sending us Landlords the very important letter that the HB stopped almost FOUR weeks ago-Just after we got the last cheque. And as u know, we only find out when the next payment hasn’t come-That the tenant left or started work 4 weeks ago.
Some councils up here got Landlords portal-It’s pathetic, I don’t even use it.

Ha ha & yes same as me, I have trump cards, a few high people I either contact when normal processor ain’t playing ball, or when I know it’s a situation where normal processor won’t have a clue, I use the trump card people. I had a corker yesterday, found out tenant spent first lot of rent, did email to top manager who has common sense in HB, about 50mins later, got email back saying direct payment to me sorted. No waiting 4 week, no more letters to tenant etc.
And I also have deputy Chief Exec’s email phone number at Ashfield Council I got his details ‘cause few years was always taking em to Ombudsman & winning £500 compensation all the time, Ombudsman told em they have to give me someone sensible, he came out, met me, said we can't keep paying u compensation every 6 months, they have much more common sense than the HB staff, & now if ever problem, I email him. Within about 30mins, my problem solved. But I never abuse that contact, only every 6 months or so do I contact him on really awkward case.
Yes. this is where News programme needs to do story, Welfare bill will have to come down, but overall expenditure as u say will go up-I spoke to Housing Aid sensible woman last week who reiterated & reiterated that they don’t want people homeless as it costs tens of thousands to rehome someone homeless-I didn’t think it would be that much, but that’s what she said.

by Vanessa Warwick

9:34 AM, 14th August 2013, About 8 years ago

Mick,

When a tenant spends the rent on their lifestyle, how do HB get it back? It's tax payer's money!

I had an HB tenant who did not pay the rent and told me he had been spending it on his lifestyle, and putting together a deposit for another flat, as I had served him notice for non-payment of rent! Grrrrr!

I also heard of someone who sent £8K of housing benefit out to Poland to build their family home over there.

"It's utterly bonkers!" as Nigel Farage of UKIP said in my video interview with him.

http://www.propertytribes.com/pt-tv-interview-with-nigel-farage-mep-leader-t-4909.html

It certainly makes MY blood boil!

by Michael Bond

10:53 AM, 14th August 2013, About 8 years ago

I had thought that the "bedroom tax" only applied to working age tenants on Housing Benefit (or equivalent), and living in Council or Housing Association accommodation. This belief was based on a very clear briefing document written by the Housing Manager of our local Purbeck District Council and given to me by the Chairman of housing. The point being that accommodation built with a hefty subsidy of tax payers' money should not be under occupied. That was until one of my tenants had her Housing Benefit payments reduced when her student daughter went off to college. I therefore referred back to the Chairman of Housing/Housing Manager. They confirmed that the original brief is correct, and these provisions to reduce under occupancy apply only to Council & Housing Association accommodation. I don't yet know what can be done to get Benefit offices to apply the law as it is rather than as they might like it to be. Any suggestions?

( In spite of my website and email address I am a landlord who also lets holiday cottages , rather than the other way about.)

** MODERATOR COMMENT - New thread regarding Bedroom Tax started here >>> http://www.property118.com/bedroom-tax-affecting-private-landlords/42313/ **

by Mick Roberts

6:10 AM, 15th August 2013, About 8 years ago

HB don’t get it back, Landlords have been arguing for years that it should be Fraud or made to pay it back.
HB just wash their hands of it-What does that teach the tenant?
When LHA first came in, if tenant spent rent with one council & moved to neighbouring council, they should inform each other, so she can’t get paid direct again. I have numerous properties with 5 neighbouring councils all in my little factory, & not one of ‘em inform each other or ask the old council what their payment record was like last time. So they can get £1000, go holiday, move to next council, do it again & again.
With forthcoming Universal Credit, there may be provision that if tenant spends, DWP take out benefits something like £20pw and pay Landlord till arrears cleared-Then when paid arrears, pay tenant again, & the cycle continues-So I say stuff your money, keep it, I don’t want the hassle every 6 months or 2 years-Costing me time & money-I’d rather lose it the once & keep going happy.

Now if the Council pay them again after u have told council that 8 weeks arrears has built up, Landlord can then sue council for compensation-I have the exact text to get this done quickly-Last year Nottingham Council paid me £2700 compensation on excactly this.
It is nuts, we know it is, tenant knows it is-Why don’t Govt?

Don't let it go above 2 weeks, get sensible high up person at Council & u could end up only losing 2 weeks. Put the ball in their court that tenant will be more in arrears if keep paying & that is irresponsible.

by Mick Roberts

7:01 AM, 15th August 2013, About 8 years ago

Reply to the comment left by "Mick Roberts" at "15/08/2013 - 06:10":

I should have said HB aren't allowed to pay HB for the same period twice. The Regs. BUT u can get the same amount paid in compensation, & that's how they have to pay u-Not in HB, but in compensation, even though it will be exactly the same amount of HB they shouldn't have paid the tenant.

by Sarah Allterton

17:54 PM, 22nd August 2013, About 8 years ago

We have heard of similar situations, landlords getting the actual amount of rents they receive falling well short as per tenancy agreement. We know of a landlord in London getting £350 a week now only paid £71 a week for a 4 bedroom townhouse. The benefit cap seems to be affecting large families. Their child tax credit of roughly £75 a week per child is what is causing the rent shortfalls. You don't need to be Einstein to know that if you have 4 kids that brings your child tax credit to £300, add JSA £65 per week and child benefit of £15 per child a week then you left with £65 a week to go to rent (add all the benefits less £500, the benefits cap).

Basically landlords will not be housing families with more than 2 kids unless the parent has an established working history. as those working 15 hours a week have no benefits cap. Here is a letter we got from worried mum of 4 kids

**************************************************************************************
Letter sent Sarah Hutchinson of rentdirectuk.co.uk from an unidentified reader

05/08/13

Dear rentdirectuk.co.uk,

Putting some of my 4 kids up for adoption might be my only way to keep a roof over my family in London following the introduction of the £500/week benefit cap.

The recent benefit cap of £500 a week has left me seriously considering putting up two of my kids up for adoption, I am single parent of 4 beautiful kids (2boys/2 girls) ranging in age from 5 years to 13 years old. I currently get full housing benefit for the 3 bedroom house I rent in London for £305 a week. I also get Job seeks allowance of £65 a week, plus Child Tax credit of £298 a week, Child benefit of £80. My total benefits I receive from the state is £747 a week, with the benefits cap the council will only pay £58 a week towards my rent. Basically I am only entitled to £58 a week to go towards rent to house the five of us. I have been advised to either get a job or find somewhere cheaper to live.

Option 1 – Finding a job
I know everybody will blame me for having 4 kids in the first place but the truth is that I was originally living with a working partner (I was the home carer) till we broke up and he emigrated to Australia leaving me to fend for the 4 kids on my own and I had to go on benefits. Having 4 kids has left it literally impossible for me to get any job whatsoever. I have been out of the workforce for over a decade and finding a job swiftly before my benefit cap starts in 6 weeks time will be a challenge to say the very least. I stand being shipped out to a city where I can rent a 3 bedroom or even a 2 bedroom (I am prepared to downsize and squeeze all of us in 2 rooms) property for £58 a week. I so want to get a job I had even been doing voluntary work at my kids school for the last 4 months hoping that it would turn into a paying part time position but alas I was told last week despite my exemplary performance that I would not be taken on as a paid member of staff. I have applied to all the supermarket chains, Post Office, Argos, FEDEX, schools, cleaning jobs, mini cab offices, Gregs the bakery, DIY stores, and anything I can think off but with no luck so far. Time is running out

Option 2. – finding somewhere else cheaper to live
Yes I know I am not the responsibility of the state and I should be grateful to have a roof over my head wherever I am put, but what about the kids, my kids who are in school, built friendships, have friends and families all in London. Do they deserved being shipped anywhere where a £58 a week rental property can be found? I am a 4th generation Londoner and have established ties to London. Is it even possible to find a rental property for £58 a week, I definitely know not in London but that is also the case with 99.9% of towns in the UK. Should I be shipped off to Romania in order that a £58 a week rental property be found for me and my kids?

Option 3 – Giving away my kids away for Adoption
I am seriously considering giving away for adoption 2 of my kids so that I can remain in London under the new benefit cap of £500 a week as my options are limited and simply not achievable. I am currently £247 over the £500 a week benefit cap mainly because I receive Child Tax credit £297 a week to care, feed and raise my kids. However if I only have 2 kids we can easily find a place to rent in London for £220 a week, with only 2 kids I will only get half of what I get for 4 kids around £150 a week then receive only, add my JSA OF £65 week and child benefit of £60 a week my total benefits then comes to £495 and then I can stay in London.

It is heart breaking to think that I might have to choose option 3 but the way things are looking that might be my only way to keep my kids in London close to their established family network, school and friends. My two other kids will then have to placed with a family in London to maintain their established connections too. I simply cannot pay out some of working tax credit towards the rent simply not viable. 4 kids cost a lot of money. I am so depressed with my options, I am desperately still trying to get a job but no luck so far and my 6 week count down is already into week 2.
.
Please do not crucify me for contemplating this action, is there any advice that you can give me. I really love all my kids and want to live with all my wonderful dear kids but I might be hopeless in trying to keep us together.

Yours truly,

Worried Mum

This letter must be published in full for republication and must mention rentdirectuk.co.uk as the originator of the letter.

by Si G

20:38 PM, 22nd August 2013, About 8 years ago

Reply to the comment left by "Sarah Allterton" at "22/08/2013 - 17:54":
hello sarah you certainly are in a tricky position, but no pain no gain as the govt would say, i feel that all fathers must be held to account for their children the govt needs to look into this but at the moment the buck stops with the govt. id advise you go prioritise your outgoings with rent first and trim back elsewhere as staying together and in your locality is top of the list. shop canny for example yesterday evening tesco items reduced by 90%. as well as cutting back do look for alternative accommodation but seems unlikely youll find it in the smoke. best of luck anyway. perhaps the govt should have phased this in over 2 years in stages rather than at once ?

by Mick Roberts

7:09 AM, 23rd August 2013, About 8 years ago

Reply to the comment left by "Sarah Allterton" at "22/08/2013 - 17:54":

Yes, my mindset is totally changing. From allowing the big families in, because they bring more rent in, now avoiding them, or asking particular questions, like any disabled or working 16hrs pw etc.
I have suggested where couple involved, that they move into separate houses on same street, so they get individual lower incomes, but each one below the cap-This is what some councils are looking at too-This costs the Govt more money.
It’s disgusting expecting people to move miles away from where they live, where they were bought up from.

The Govt should have bought this in for new people, not people that had the kids years ago, it’s too late now. New people, any new kids, you’re not having any extra money, at least they knew beforehand, bit late changing & bringing in rules several years later.

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