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 Mark Alexander

10:26 AM, 7th August 2013, About 8 years ago

Reply to the comment left by "Vanessa Warwick" at "07/08/2013 - 10:25":

Excellent, thanks for the link Vanessa, I will take a look 🙂
.

by Si G

15:33 PM, 7th August 2013, About 8 years ago

It's high time that the government has finally realised that 1) people need to be responsible for their own lives and 2) money does not grow on trees. As David Cameron puts it you cut your cloth according to your situation. What makes someone think they can choose to bring up a (large or small) family on benefits ? Clearly basic accountig/housekeeping needs to be on the agenda at the benefits office.

by Puzzler

15:44 PM, 7th August 2013, About 8 years ago

I am with Vanessa LOL

I am also a bit p'd off that my nicely constructed post has disappeared before I could send it. So to try again.

As I understand it the rent shortfall is £130 per week so her disposable income is going to reduce from £630 to £500 per week.

She is getting tax credits - is she working? Is tax credit a benefit, I assumed it was a kind of tax relief but I do not know anyone who gets them so do not know for sure.

She has a lot of children? £90 CB would be 7 or 8 or did you mean that was the childcare allowance?

It's still equivalent to £36000 pa salary, someone needs to explain to her nicely that she receives 50% more than the national average wage and help her to budget.

If your rent is reasonable (and I have no reason to suppose it isn't) then help her to understand that. Nobody likes to lose something they take for granted.

I know that doesn't help with direct payment, but others have answered that very well.

by Industry Observer

15:56 PM, 7th August 2013, About 8 years ago

It is by no means certain that if and when UC comes in - if and when it ever does universally - that LHA will be paid direct to Landlords once a tenant is 8 weeks in arrears.

In the original proposals and indeed scheme as piloted it was removed as an option, then in the latest pilot areas it has been reintroduced and so Landlords can seek direct payment once the tenant is 8 weeks adrift.

Note the word "seek" it used to be an automatic right and the LL could oblige the HB office to pay it in thoise circumstances. I am not so sure now that it is something a LL can demand, the LHA office may still have discretion as to whether to pay it direct.

The vulnerable category of course still exists.

But back to LHA and direct payments when tenants are 8 weeks in arrears. I warned several months ago when this change was announced in the latest pilots, and RLA and NLA and so on were shouting it from the rooftops that Govt had at last seen sense on something, that it is still by no means certain when the eventual final version of UC is rolled out that the provision for direct payment will be in there.

Or if it is that it is not something a LL can demand, only seek.

There are many others far better versed in the murky, complex world of LHA than me, Mary Latham and Ben Reeve among them, but if I was a LL and was concerned about the possibility of losing direct payment in all circvumstances on LHA tenancies I'd proceed with caution until the issue becomes much clearer, and preferably set in tablets of stone - either way.

by Steve

18:12 PM, 7th August 2013, About 8 years ago

The problem is your tenant receives a prescribed benefit (income support, Job seekers, Employment support allowance). However, if your tenant was to start working (either for a firm or self employed) as long as the work was seen as "proper work", then NO benefit cap! Easy way out!

by James Noble

18:39 PM, 7th August 2013, About 8 years ago

Reply to the comment left by "Puzzler " at "07/08/2013 - 15:44":

I have sympathy with Paul's comments. When you read comments like - 'when they've had it for years, they've got used to it.' It's time for a change. This woman is getting more money than I earn as a school teacher (with five children). My brother is a care-worker with severely disabled folk - £16,000 a year. 'Nuff said.

by Ian Ringrose

18:53 PM, 7th August 2013, About 8 years ago

This looks like a clear case of a tenant deciding that there are other things more important than rent to spend money on. I think a section 8 notice and action is required.

I hope the council will not re-house the tenant, as the tenant has decided not to pay the rent so is intentionally homeless. (The children may need to be put up for fostering until the parents are willing to learn how to manage money, or adoption if the parents are not willing to change their ways.)

We all have to decide the most important bills to pay when our income reduces for any reason; this tenant has decided that housing is not important. It is amazing how cheaply you can eat on fresh vegetables from the market and rice. Has the tenant given up meat so that the rent can be paid….

by Adam Zeeblebum

20:18 PM, 7th August 2013, About 8 years ago

What a horrible and judgemental off-topic turn this thread has taken. A landlord asked for some advice about a difficult situation. The responses started off well, but have rapidly deteriorated into privileged sniping and the regurgitation of Daily Mail-style soundbites. It would be a massive derail if I were to try to rebut all the comments in this thread that have been made about benefits claimants, but I just wanted to briefly register my complete and utter disagreement with attitudes that are short-sighted and destructive; that are based on incorrect and/or decontextualised statistics, comparisons and suppositions; and that, if followed through, will lead to worse outcomes for the economy and for society as a whole, including all of us.

by

20:53 PM, 7th August 2013, About 8 years ago

I think people misunderstand me.
I would love it if everyone received all the benefits they ever needed to give them a lifestyle the wanted whether to work or NOT
Unfortunately we live in the real world and a FREE lunch cannot be afforded.
The country is broke.
We therefore have to allocate resources accordingly.
Paying someone to sit on their a--e all day without needing to work is no way to manage resources.
Paying someone sufficient benefit that forces them to so a job for which they derive no real advantage is the way to go.
It puts them in the same position as someone who does go to work.
You can call it 'workfare' if you want.
I see NOTHING wrong with forcing people to effectively work for their benefits.
They always have the option of sourcing a better paying job or moving to cheaper areas.
Of course those who are NOT in a position to do this should be supported fully.
The sick; severely disabled etc deserve such assistance.
Some 850000 people came of disability benefits and are now fit for work following the new fitness tests.
This just shows the abuse that has been going on for decades.
These benefit changes will severely affect the business model of certain LL.
they will invariably have to turn to working tenants and therefore accept they will receive less rental income.
LHA LL have had it too good for too long and I for one am glad it is ending.
Having lots of cash won't now buy you lots of LHA cashflow.
You will have to be more leveraged and earn less profit.
However as with swings and roundabouts you may suffer less losses in refurbs; theft and repairs, so you might be in the same place but without the hassle of HB tenants.
PRS L were only in the LHA game because they were making more money than 'normal' tenants.
So OK that business model is coming to an end!
Astute LL will readjust their models and still find ways to make money; albeit in changed circumstances.
It will be TOUGH on HB tenants but so what; the PRS is NOT a charity.
Govt should recognise the need for vast amounts of social housing.
The PRS cannot be expected to replace govt spending power.
ONLY the state can provide for the housing needs of the mass of low waged tenants.
Wait till 2014 when the Romanians and Bulgarians start flooding here; you think there are problems now, well you ain't seen nothing yet!.
If they can come here and find employment and housing what is the problem for the existing unemployed?.................................................................anything to do with laziness possibly!!?
I'm afraid the undeserving poor will have to get off their backsides and work even if they are not better off.
Govt does pay to keep them sitting on a sofa; they want them working.
Work is good for so many things.
Money is not the only good reason to go to work.
The undeserving poor have got used to getting things for nothing and now their existing 'lifestyles' are coming to an end; about 45 years too late.
Better late than never.
These benefit changes will drastically change LL business outlook; that I am afraid ids the nature of the game; nothing lasts forever so LL get doing your research to ascertain how you may maintain your profits.
If that means getting rid of HB tenants, then so be it.
YOU ARE UNDER NO OBLIGATION TO HOUSE HB TENANTS; YOU EXIST TO MAKE AS MUCH PROFIT FROM WHEREVER AS YOU CAN!!!!
YOU HAVE NO SOCIAL HOUSING OBLIGATION WHATSOEVER!
This has been HB tenants for some LL to date; but may well be unviable in the future.
So LL will have to think long and hard as to how they structure their business for the future.
I see radical choices being made by PRS LL; which will result in the continuing exit of PRS LL from the HB market!!

by

21:07 PM, 7th August 2013, About 8 years ago

Reply to the comment left by " " at "07/08/2013 - 20:18":

You are entitled to your opinion; you are wrong but you still have the right to espouse such views.
See Ian's comment; that is the answer to the original post; 2 above this.
Essentially he states if she won't pay the rent then she must leave; irrespective of how she arrives at the position of not choosing to pay the rent.
LL are not charities and ANY tenant who suffers loss of income from wherever it comes from have to make choices about their lifestyles.
Being on benefit does NOT give you ANY God given right to remain in the situation you have enjoyed for in past years.
Essentially benefit claimants are now being forced to make the same economic choices as people who do not receive for not working at all.
Fail to see the problem
Stuff society I want to see a lazy benefit claimant putting in the hrs that I had to.
So the message is work or starve!.the freeloading days are over!!


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