Agenda item

Context:

The UK Government is continuing to implement its programme of welfare reform. The programme has a number of policy objectives to encourage those on benefits to find work and to move away from dependency on benefits payments, whilst at the same time, contributing a significant proportion of savings towards Governmental public spending.

A summary of the main impacts of the welfare reform programme includes reference to Universal Credit, reductions in Housing Benefit and the ability of some of Monmouthshire’s most vulnerable households to afford their rental payments.

The main practical mitigation offered by the Council is via the administration of Discretionary Housing Payments to assist customers to meet the rent shortfall incurred due to the welfare reforms. The Council has previously confirmed that, in addition to the administration grant provided by Department for Works and Pensions, it will make £60,000 per annum available to meet the demand placed upon the Discretionary Housing Payment fund.

Key Issues:

·         The major reforms currently affecting Monmouthshire local authority             customers are as follows:

-       Universal Credit – the new benefits system replacing six legacy benefits (jobseekers allowance, income support, employment and support allowance, tax credits and housing benefit) fully introduced in Monmouthshire in June 2018. This replaces all new claims for the legacy benefits. Customers have a five week waiting period for their initial payment but can access advance payments and in some cases receive a two week transition payment of housing benefit to assist themwith their rent.

-       Under occupation charge / ‘bedroom tax’ restricting rents for working age people on Universal Credit and Housing Benefit in social housing owned by landlords such as Monmouthshire Housing Association, Melin and Charter (affecting 450 households by an average of £13 per week).

-       Private sector rent limits – particularly those restricting rents for the under 35’s – their rents are limited to the shared room rate of £50 per week.

-       Household Benefit Cap – a maximum limit on benefits for households. £13,400 for single people and £20,000 for lone parents and couples (affecting 54 households by an average of £45 per week).

·         The administration of Housing Benefit, delivered by the Shared Benefit

Service led by Torfaen County Borough Council, is the responsibility of the Department for Work and Pensions (DWP) and is not currently a devolved matter. In addition, the Shared Benefits Service administers Council Tax Reduction, Free School Meals and Clothing Grants, and Guardianship / Adoption Order assessments.

·         This means that the Council’s Benefits service is well placed to understand the local circumstances and implications, and are a key part of the system that can potentially provide help and support. In particular, the transition to Universal Credit can be a difficult one for residents. Therefore, a dedicated resource has been made available from within the service to assist customers to claim Universal Credit, to ensure they claim other benefits and to assist them to manage their financial affairs.

·         In order to mitigate the impact of the changes, the Government has provided additional funding to local authorities in the form of Discretionary Housing Payments. These payments are intended to assist those who are in most need due to their inability to pay their rent.

·         The Council has also recognised the importance of Discretionary Housing Payments as a means of targeting assistance and preventing greater costs to vulnerable residents and the Council in the future. It has made an additional £60,000 per annum available, to this end.  

·         In 2018/19 the Council spent £198,196 in Discretionary Housing Payments (with funding of £139,910 from the Department for Work and Pensions) placing it in the top two authorities in Wales. In total 1,114 awards were made to households.

·         Of the 1,129 Discretionary Housing Payment (DHP) awards, 605 were           made due to spare room subsidy / bedroom tax, 208 due to private rent

restrictions and 49 due to the household Benefit Cap. In addition, 250           awards were made to customers facing general hardship particularly those on Universal Credit and not able to afford their rent.

·         In terms of the purpose of the award, 959 awards were made to customers with ongoing rental costs, 102 awards were made to customers to assist them in the short term while they were seeking employment, 15 awards were made to those who were moving or waiting to move to alternative accommodation, 5 awards to assist customers who live in specially adapted accommodation, 28 awards to customers mainly in private rented accommodation to secure and move to new homes and 5 awards to household’s with foster children.

Member Scrutiny:

·         The discretionary housing payment is about the decision making process and not the grant itself.  An administration Grant is received from the Department for Work and Pensions (DWP). This is then topped up by the local Authority in the sum of £60,000.

·         With regard to Universal Credit, for the first year, an individual does not have to provide detailed statements of account.  After the first year is completed then the level of income is assumed that is equivalent to the amount of hours worked multiplied by the national living wage.  Often, businesses take time to develop. Supporting statements of accounts will not evidence a particularly high profit after a year in business.

·         With regard to Discretionary Housing Payments, it was noted that some local Authorities were not spending their full allocation and the UK Government has been critical of those local authorities. However, Monmouthshire County Council spends more than its allocated funding. The authorities that have not spent their grants are being encouraged to do so.

·         In response to a question raised regarding a request being made to the UK Government for additional funding, as some local authorities are not spending their full allocation, it was noted that the question for additional funding could be put to UK Government. The matter would be raised with the DWP Partnership Manager.

·         With regard to the five week delay in receiving Universal Credit, it is not intended that we should not use DHP’s to help people who find themselves within that delay period.  However, it is one of the few mechanisms available to assist customers who require emergency assistance.  The intention of DHPs is that they are a short term assistance with regard to rent. There are alternatives for food as well as having water rate relief and assistance regarding the provision of short term gas and electricity supply.  In the absence of any other assistance DHP is provided.

·         The five week wait is the period of time before the first payment of Universal Credit and is the responsibility of the DWP. The DWP does offer an advanced payment loan. Repayments are then made.  The Trussell Trust has raised some concerns regarding this loan as the repayments do not take into account people’s ability to repay them.  The UK Government’s own policy regarding lenders meant that accountability has to be considered regarding how the loans can be repaid based on how much income an individual has. However, this is not the case with regard to the advanced payment loan, leaving people with a significant amount of money having to be repaid.

·         The advanced payment loan is available to bridge the five week gap.  When the payments begin, deductions are made to repay the loan. The deductions can be up to 40% of the total loan. It is anticipated that the cap will be reduced to 30% in October 2019.  The Trussell Trust still considers that 30% remains a significant amount forcing some people into destitution and having to use foodbanks as well as accruing rent arrears.

·         The Trussell Trust is campaigning to end the five week gap.

·         The Secretary of State had signaled a change of approach and some of the changes proposed have not yet come to fruition.  Therefore, the reduction in sanction benefit deductions has not yet been realized.

·         With regard to Universal Credit, there is currently a two week housing benefit transition payment.  There will be other transition payments for Jobseekers allowance, going forward.

·         The managed migration was a key issue that the Trussell Trust has been campaigning on.  More money is coming into the system which will commence in June 2020.  There is a recognition within all of the political parties that changes / amendments are required to Universal Credit, going forward.

·         It was acknowledged that the support and advice being provided at foodbanks was an important service. This is a key part of the Trussell Trust model.