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

Text Size

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 Industry Observer

22:34 PM, 7th August 2013, About 8 years ago

Just a thought but I think it is a well known statistic - or maybe it is not - that 85% of HB (LHA) recipients actually work

by Puzzler

22:35 PM, 7th August 2013, About 8 years ago

Would have been helpful if " " had at least used a username so we can follow the threads.

Yes two topics have been confused here: rights or wrongs of the new cap/UC etc.

LL problem of not receiving his rent.

Whatever your political persuasion it seems that the tenant does not want to pay her rent, so IMHO the LL must do as he sees fit in that situation: either he can accept the situation as far possible (presumably a non-starter) or show her the error of her ways or he can pursue whatever recourse he has in law.

If that recourse doesn't result in the payment of his fair rent by either the local authority (was going to put LA but realised could be confused with Letting Agent) or the tenant then there is no other choice but to proceed towards eviction.

If the LL really does not want her to go then the only other course is for him is to compromise on the rent.

by Puzzler

22:40 PM, 7th August 2013, About 8 years ago

Reply to the comment left by "Industry Observer " at "07/08/2013 - 22:34":

I did query whether this tenant worked as tax credits were mentioned but as yet I have not seen a reply (unless I missed it, there has been such a flurry).

by

3:15 AM, 8th August 2013, About 8 years ago

Reply to the comment left by "Industry Observer " at "07/08/2013 -

Yes agreed but that means 25% don't work!!
I bet 25% of EU migrants are NOT; not working.
Funny how they can find jobs coming across continents but our lazy scroungers can't get off their a--es and do the job the EU migrants seems prepared to do!!
Even those in work and on benefit if they didn't earn enough to pay rent; would have to MOVE to a cheaper area.
That is the way of the world.
I'd like to live on Park Lane but you know what!?; I CAN'T afford to, so I live where I can afford.
Why should a benefit claimant of whatever amount NOT be subject to the same economic strictures as me!!?

by Mick Roberts

7:35 AM, 8th August 2013, About 8 years ago

Well, that’s contacting Bill Irvine off the list then. If the top people the Landlords side don’t have answer, it looks like it’s gonna’ one of those wait till so many get evicted before Govt reacts.
Welfare rights officer don’t know anything about-Again laughable I know.
When into Gedling (a local authority in Nottm) HB, the said she is the first that has come in-They had been waiting for one. They have not heard of many with 6 kids, but us Landlords can locate em easy, ‘cause in the past they used to bring the most LHA.
Yes, things are changing now. families with 3-4 kids or more are gonna be struggling to find somewhere.

One woman’s already committed suicide because of the bedroom tax.
These people unfortunately don’t put pen to paper & complain correctly like us Landlords would do, they just shout verbally in local offices, which don’t often get high enough in the chain-I have that off good authority off High up DWP person.

Not working, no. I think it’s about £80 CHB (child benefit) pw. £350 every 4 weeks.
I’ve explained-and we do get on-she’s on too much. You’ll laugh at this, I went to see her yesterday to attempt to pick up weekly top up & post office is 300m away-And she was getting return taxi at £3. I said me & my missus can’t afford taxi’s for these kind of traps. Like banging your head against brick wall.
She knows me & rent are reasonable.

Working not easy way out for her, ‘cause she can’t afford to go the 6 weeks with NO money while they sort out working claim-This is a massive flaw DWP need to sort out, ALL my tenants on average have 6 weeks with no Tax credits, Income Support, JSA etc, when starting joint claim, work, fella moving in out etc.

She’s a VERY good mother, as tidy as the come, likes a nice house, just poor with money.

Don’t believe them 850,000 figures off DLA to work, it’s the private companies getting bonus money to get em off-Man with no legs ‘can u lift your right arm'?’-Yes, u fit for work then. I’ve seen loads been passed fit, can’t even walk to end of garden, they appeal, wait a year for appeal, win it, get DLA, 2 weeks later, Govt company passes ‘em fit again-This has been in the News.

Tenant does want to pay her rent, she can’t see how she can afford it. She don’t work, only gets Child Tax Credit.

by Mick Roberts

7:43 AM, 8th August 2013, About 8 years ago

One thought which I forgot, dis-regarding the benefit cap, but when this HB money is paid to tenant & they spending it & Govt don't want direct payment to Landlord, I'm surprised the NEWS channels & Taxpayers aren't making an uproar story on how THEIR taxpayers money is going to the tenant for them to do as they please, snort cocaine, go holiday, get sozzled. Taxpayers moan enough as is, they having to pay someone elses rent, but u would think they'd be screaming that Govt wants to keep giving tenant this LHA for tenant to then do as they please. I have had instances of tenant spent 1st 2 months LHA £900ish on drugs 4 years ago & now has drug habit-All because got paid the LHA to them in the first place.

by Bill irvine

8:46 AM, 8th August 2013, About 8 years ago

Mick,

I understand your frustration and sympathise with your predicament but as you stated in your original post "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".

In other words, it is the combined DWP, HMRC and Housing Benefits which bring this large family above the £500 weekly ceiling that's the real issue, not direct payments.

You make reference to the abuse of the scheme and misuse of public funds but surely the LHA rules on direct payments, at the minute, provide for the statutory "8 weeks rule" (Regulation 95) and the various "discretionary" provisions in Regulation 96 which experienced landlords make good use off. I'm sure you fall into that bracket.

Furthermore, where there are disputes these can be challenged either at independent tribunals or by taking cases to the Local Governement Ombudsman.

If you examine my website http://www.ucadvice.co.uk/housing-associations/2013/08/lgo-report---maladministration-found-compensation-agreed-of-1800 you'll see ample evidence of landlords receiving compensation; £7000 in one case where payment was made directly to the tenant who called a cab and promptly spent the money on Christmas presents - liitle darling!

Contrary to what's been said in earlier posts, under Universal Credit it was always the intention of Goverment to have redirection of payments to landlords, but only in 10% of cases. The 6 demonstration projects were set up specifically to determine, at what stage redirection should take place, and it was the interim reports from these projects, highlighting serious rent arrears problems and defaults, which led to Lord Freud announcing at this year's CIH conference that "payment exemptions" could apply as early as the first month and would automatically apply after 2 months.

Unsurprisingly, the RLA produced a press release quoting his comments - why would they not, this was a bit of good news!

Since then Civil Servants have been told to increase the expected numbers to 30%; exactly the same % which currently applies to LHA.

What's disappointing is, that whereas the current safeguards are covered by regulation, "exception payments" will be based on DWP guidance and will not include a right of appeal. I have been firing up my RSL clients to make a big issue of this and would encourage PRS landlords to do the same. Without this right of appeal we're left having to rely on the DWP - not a comforting thought!

In my view, it's the DWP that is the real "Elephant in the Room" http://www.ucadvice.co.uk/housing-associations/2013/08/universal-credit---dwp-update-on-alternative-payment-arrangements

Bill Irvine
HB & UC Advice & Advocacy
http://www.ucadvice.co.uk

by Industry Observer

9:16 AM, 8th August 2013, About 8 years ago

This is my last post on this thread Mark because of the vitriol and bile that Paul Barrett continually pours out. Paul I don't know what dreadful mishap befell you early in your life but it seems to have left you bitter and twisted and with political views only slightly to the left of Ghengis Khan and Attila the Hun.

By the way if 85% work then only 15% do not.

Mark - I have advised you before that Paul's posts should not appear as all they contain is personal invective

My last word on UC which I do not fully understand, and maybe Bill Irvine can comment, is the construction of the £26K maximum entitlement. As I understand it UC is in effect a shopping trolley and as you pass through the benefit system shelves stacked with the various benefits if you qualify they go into your trolley - until you reach the £26K mark, then you go to the check-out.

Now here is my point

ASs I understand it certain benefits are ring-fnced and do not count towards the cap limit, mainly health related ones? Like DLA?

Then you start adding the ones that do count. My understanding is that the LHA element is fairly far along the shelves, but even if I am right and it is the first item not ring fenced then that amount is in the trolley. So If you got £12000 a year in LHA that only left you £14K to go

Or if you already had £18K in your trolley counting towards the £26K then you could only have £8K of your previous £12K LHA and so end up £4K short.

I have been warning Landlords and agents about this scenario for some time (assuming I am correct) but it may be that the £500 per week cap on LHA itself does the job anyway.

But if not, and LHA goes in the trolley last, then there may not be enough financial room to take the whole lot previously paid anyway.

Can someone better informed than me confirm whether my understanding is correct, or not. One thing is certain of course - LHA is not ring fenced.

I agree with Vanessa this thread is too depressing, or the attitudes on it. So like any good dragon - I'm Out!!

by Bill irvine

9:44 AM, 8th August 2013, About 8 years ago

Industry Observer,

I experience the same frustrations as you've expressed. Bitter diatribes of the type you're referring to kill off threads and should be moderated.

Compared to some, I only rarely post but when I do it's to offer my knowledge and advice, free of charge, to those that are interested. Thankfully, in most cases it's appreciated. But then you get quips like Mike's "Bill's of the contact list" all because you don't entirely agree with his comments.

Like it or lump it, the Benefits Cap is law, created by Parliament, so we have to work within that framework and anyone who knows me will know that I know how to do so and still get results http://news.rla.org.uk/bill-irvine-landlords-lack-of-interest-in-housing-benefit-and-property-management-nearly-cost-him-20k/

Relating back to the Benefits Cap, it's firstly important to recognise that the £26K is based on the UK's net average wage. Overall, there are 5 million HB/LHA claimants and around 50,000 cases affected by the Cap, whereas there are 700, 000 affected by the "Bedroom Tax" (Social Landlords).

Your shopping basket analogy is on the right lines. The DWP's calculation team in Belfast identify those most likely to be affected by the cap by adding together their DWP and HMRC benefits (excepting the likes of DLA/PIP etc) and then pass this information to the LA's to apply the LHA figure. Once the cap ceiling has been breached the LA applies the cut to the LHA element, as in Mick's case.

I hope this helps to clarify the situation and sorry to hear of your decision, which is a pity.

Bill Irvine
HB & UC Advice & Advocacy

by David Griffith

10:19 AM, 8th August 2013, About 8 years ago

Mick,

You seem to have a good relationship with your tenant, could you help her with a budget to spend her benefits more wisely?

If she paid her full rent she would still have £341pw to live on, even with six children this should easily be possible. Perhaps you could offer her a small rent reduction too if the £341pw is not enough


Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

BECOME A MEMBER