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Local Housing Allowance Safeguard Policy

Introduction and Background

From April 2008, Local Housing Allowance (LHA) will replace Housing Benefit (HB) for most tenants renting properties in the private sector. The change will affect anyone making a new claim for benefit, or changing his or her address.

The Department for Work and Pensions (DWP) has introduced LHA to provide tenants with more choice and responsibility about where they live and how they manage their own finances. The two main features of the scheme are:

Purpose of the policy

However, the DWP recognise that paying LHA directly to the tenant will not always be appropriate in every case. Issues of vulnerability and the risk of a tenant not paying their rent should be safeguarded against. The purpose of this document is to set out our policy for determining the circumstances where payments of LHA will be made to the landlord, instead of the tenant.

Aims and objectives

The aims and objectives of this policy are to:

This policy is not designed to:

There are two main reasons why we may need to consider this policy:

Vulnerable tenants

Introduction

The term vulnerable in this context is where we consider that the tenant is likely to have difficulty managing their affairs. The intention is to prevent tenants who are likely to experience difficulties from falling into rent arrears.

The phrase is likely means that it will be more likely than not that the tenant will be unable to manage their affairs. It will not be sufficient to conclude that there is a possibility that the tenant may have difficulty managing their affairs or that, because tenants in certain circumstances carry a risk that they may be unable to manage their affairs, we will pay the landlord direct.

We will investigate each case thoroughly when considering representations that a tenant is likely to have difficulty managing their affairs.

We will identify those tenants who may wish to be classed as vulnerable simply because they would prefer to have payments of LHA sent direct to their landlord. The intention is to distinguish between tenants who chose to manage their finances in a less organised way and those that genuinely have difficulty managing their affairs.

We will ensure that the vulnerability condition is not used to circumvent the fact  that there is no longer a provision for the tenant to request direct payments to their landlord.

In the majority of cases, we will require supporting evidence from professional bodies such as doctors, social workers or probation officers, before deciding that someone is vulnerable.

Possible indicators that a tenant may be vulnerable

By indicators we will consider both the causes and effects of vulnerability. We will never decide a tenant is vulnerable simply because they match one of the indicators listed below. The presence, or absence of any of these indicators will only be used to allow the Council to investigate possible causes or effects of vulnerability.

Who can make representation?

In most cases, the person making the claim for LHA will identify themselves as vulnerable. However, although there is no legal obligation on the Council to proactively identify tenants who may have difficulty in managing their own financial affairs, the Council recognises that it may be difficult for tenants to present themselves as vulnerable.

We will therefore take reasonable steps when a person makes a claim for LHA to find out if an issue of vulnerability may prevent the tenant from paying their rent.

The Council will identify potential cases through representation by one or several of the following sources:

The Council will generally expect representations to be made in writing, however verbal representations will be accepted, so long as they are supported with sufficient evidence.

Decision making

Once representation has been made and all of the required supporting evidence received, the Council will make a decision on vulnerability and notify the tenant and landlord in writing (and/or other third party if relevant and with the tenants consent). However, where the Council has been unable to establish the facts because of the tenants failure to co-operate or due to a lack of response from the tenant, the Council will consider whether this failure to co-operate or respond does not in itself constitute vulnerability.

In all cases where further evidence is required to make a decision on vulnerability, the Council will not delay the processing or payment of the LHA claim.

Referral to other organisations

Where a tenant has declared themselves vulnerable because;

The Council will refer the tenant (or encourage them to seek advice and guidance) to a relevant organisation who will be able to assist them. These could include:

The Council will enter into formal or informal arrangements (e.g. using Service Level Agreements) with these organisations for referral and signposting tenants. In all cases where the tenants vulnerability is due to debt problems, the inability to open a bank account or a housing related support need, the Council will work in partnership with all of the agencies listed above, to ensure the tenant receives the relevant advice and support, and that their ˜vulnerability is as short-term as possible.

Supporting people

This policy is not intended in any way to undermine the principles of the Supporting people programme, which is to enable vulnerable people to manage their own tenancies and live as independently as possible. Vulnerable tenants may be receiving housing related support through an organisation funded by Supporting people. In these cases, budgeting skills and support to manage their own financial affairs may be a key part of the tenants support plan.

In these cases, the Council will contact the support agency, care worker or Supporting people team for advice on whether to pay LHA to the tenant or direct to the landlord.

The LHA scheme will not apply to tenants receiving support in excluded tenancies, i.e. accommodation based Supporting people services. However, private tenants receiving floating support will be subject to LHA.

Duration of the decision

In all cases where the Council has decided that a tenant is vulnerable, they will also decide when this decision should be reviewed.

The majority of decisions will be relatively short-term (up to 6 months), if for example the tenant requires debt advice, help opening a bank account or is on a waiting list for a housing related support provider.

Other reasons, such as longer term medical conditions or disabilities may require a lengthier review period (over 6 months). In exceptional cases, the Council may decide that the vulnerability is likely to be permanent and will not require reviewing. In all cases, the Council will seek the advice of appropriate professional or voluntary organisations with the consent of the tenant, on the duration of the review period and whether the tenant should still be classed as vulnerable.

Once evidence has been received that a tenant is no longer vulnerable and with agreement with the tenant, payments of LHA will be made to the tenant. In all cases, the Council will act in the best interests of the tenant and in accordance with the aims and objectives of this policy.

Disputes and appeals

Where the tenant, landlord or other organisation working on behalf of the tenant with their consent disputes a decision on vulnerability, the Council will review its decision and notify the outcome to all affected parties.

Where appropriate, the Council will engage with other organisations (with the consent of the tenant), such as Citizens Advice Bureau or Welfare Rights, to provide an independent view and review the evidence collated.

Alternatively, the tenant or affected party can ask for an appeal through the Tribunal Service. This will be conducted in accordance with the current regulations for revisions and appeals.

It is unlikely that the tenant will pay their rent

Introduction

The LHA regulations allow for payments to be made directly to a landlord where the Council considers that ˜it is improbable that the claimant will pay his rent. The intention is to protect tenants who are likely to act irresponsibly from falling into rent arrears. The Council will balance the aim of the LHA scheme to encourage tenants to take responsibility for their rent payments with the need to ensure tenants can maintain their tenancies and that landlords are not damaged financially.

The phrase is improbable means that there will be a degree of probability that the tenant will not pay their rent. It will not be sufficient to conclude that there is a possibility that the tenant may not pay their rent or that, because all tenants carry a risk that they may not pay their rent, the Council will pay the landlord direct.

The Council will investigate each case thoroughly when considering representations that it is unlikely that the tenant will pay their rent.

The Council will seek to identify those tenants who are genuinely ˜unlikely to pay their rent with those who may claim that they are not likely to pay their rent because they would prefer not to take that responsibility.

The Council will ensure that the ˜unlikely to pay condition is not used to circumvent the fact that there is no longer a provision for the tenant to request direct payments to their landlord.

In the majority of cases, the Council will usually require supporting evidence, before deciding that a tenant is ˜unlikely to pay their rent.

Possible indicators that a tenant is unlikely to pay their rent

The consideration that the Council will be required to make is whether a person is unlikely to pay their rent, not whether a person has a history of failing to make other payments or has experienced debt problems. A history of rent arrears could, therefore indicate that a tenant may not place great importance on paying their rent. This could be in their current tenancy, or in a recent previous tenancy, including a former housing association tenant.

Where representation is received, but with no actual evidence that a person is unlikely to pay their rent, possibly due to the fact that until now the tenants landlord has been in receipt of direct payments, the Council will usually make payment to the tenant.

However, in these cases the Council will ensure the tenant is acting responsibly and will request evidence of rent paid, once LHA is in payment. The actions taken by the tenant once LHA has been received will be treated as evidence to determine whether a tenant is likely to pay their rent.

Where a person has always paid their rent on time, but has other financial problems, the Council will usually make payments to the tenant, as there will be no evidence to suggest that they will not pay their rent. However, where a person has not previously had a rental liability and so cannot have failed to pay their rent, then other arrears or debts will be taken into account. In situations where HB has always been paid direct to the landlord, other financial dealings will be taken into account.

The tenants credit history will generally be a useful indicator. Arrears of priority and non-priority debts could all indicate that the tenant does not manage their money sufficiently well and is unlikely to do so in the future. Greater emphasis will be placed on the non-payment of priority debts.

Priority debts are:

Non-priority debts are:

The Council will examine records of arrears and in particular where records show persistent arrears or a failure to keep to arrangements that have been made with the tenant. In particular, the Council will examine its own records in relation to Housing, Council Tax and HB overpayments. However, where representation has been made by a third party (e.g. a landlord), Housing or Council Tax records will not be examined without the consent of the tenant.

The existence of County Court Judgements will not automatically render a person ˜unlikely to pay, however these would be taken into account along with other evidence. Consideration will be given to the reason why the judgement was obtained.

Who can make representation?

In most cases, it would be unusual for the tenant to suggest that it is improbable that they will pay their rent. It will be more likely that such evidence will be provided by a landlord (both past and present) or a third party who can demonstrate experience or knowledge of the tenants behaviour.

Without any representation, the Council will not usually undertake any enquiries when a person makes a claim for LHA to find out if they will be unlikely to pay their rent, unless existing records held show a history of arrears or non-payment of rent.

The Council will identify potential cases through representation by one or several of the following sources:

The Council will usually expect representations to be made in writing, however verbal representations will be accepted, so long as they are supported with sufficient evidence.

Decision making

Once representation has been made and all of the required supporting evidence received, the Council will make a decision on whether the tenant is unlikely to pay their rent and notify the tenant and landlord in writing (and/or other third party if relevant and with the tenants consent).

In all cases where further evidence is required to make a decision on whether the tenant is unlikely to pay their rent, the Council will not delay the processing or payment of the LHA claim.

In making the decision on whether the tenant is unlikely to pay their rent, the Council will also consider the following:

Where there is insufficient evidence that it is unlikely a tenant will fail to pay their rent, the Council will usually make payment of LHA to the tenant.

Referral to other organisations

Although making a decision on improbability that a tenant will pay their rent is different to vulnerability, the Council will still consider whether it is appropriate to refer or signpost the tenant to specialist advice and support. Where a tenant has:

The Council will refer the tenant (or encourage them to seek advice and guidance) to a relevant organisation who will be able to assist them. These could include:

The Council will enter into formal or informal arrangements (e.g. using Service Level Agreements) with these organisations for referral and signposting tenants. In cases where the tenants inability to pay their rent is due to debt problems or a housing related support need, the Council will work in partnership with all of the agencies listed above, to ensure the tenant receives the relevant advice and support, and that their ˜inability to pay their rent is as short-term as possible.

Duration of the decision

In all cases where the Council has decided that a tenant is unlikely to pay their rent, they will also decide when this decision should be reviewed.

The majority of decisions will be relatively short-term (up to 6 months), if for example the tenant requires debt advice, or is on a waiting list for a housing related support provider.

Following advice from those agencies, the Council may require a lengthier review period (over 6 months). In exceptional cases, the Council may decide that the inability to pay their rent is likely to be permanent and will not require reviewing.

In all cases, the Council will usually seek the advice of appropriate professional or voluntary organisations with the consent of the tenant, on the duration of the review period and whether the tenant should still be classed as ˜unlikely to pay their rent.

Once evidence has been received that a tenant is no longer unlikely to pay their rent and with agreement with the tenant, payments of LHA will be made to the tenant. In all cases, the Council will act in the best interests of the tenant and in accordance with the aims and objectives of this policy.

Disputes and appeals

Where the tenant, landlord or other organisation working on behalf of the tenant with their consent disputes a decision on an inability to pay rent, the Council will review its decision and notify the outcome to all affected parties.

Where appropriate, the Council will engage with other organisations (with the consent of the tenant), such as Citizens Advice Bureau or Welfare Rights, to provide an independent view and review the evidence collated.

Alternatively, the tenant or affected party can ask for an appeal through the Tribunal Service. This will be conducted in accordance with the current regulations for revisions and appeals.

Eight week arrears cases

The HB regulations state that payments are to be made to the landlord where a tenant is 8 weeks or more in arrears with their rent, except where it is in the overriding interests of the tenant not to make payments to the landlord. This is a mandatory provision for direct payment and unless it is in the overriding interest of the tenant not to do so, there is no other discretion in this matter.

Where the landlord has stated the tenant is 8 weeks or more in arrears with their rent, the Council will request evidence of this before making direct payments.

Tenants whose rent is charged 8 weeks in advance by their landlord, will not be classed as being in arrears for the purposes of this provision. The amount payable to the landlord will be restricted to the rent charged and any arrears that are outstanding. LHA already paid to the tenant cannot be paid again to the landlord for the same period.

All affected parties will be notified in writing of the Councils decision and will be able to dispute the decision, or appeal.

In all cases where the Council has decided that a tenant is 8 weeks in arrears of their rent, they will also decide when this decision should be reviewed. Once the tenant is no longer in arrears with their rent, the Council will revert payments back to the tenant. However, before doing so the Council will consider if any of the ˜unlikely to pay provisions apply.

Other considerations

Where it appears to us that circumstances may have been contrived in order to secure direct payment of LHA to the landlord and circumvent the aims and objectives of this policy, the normal provisions outlined in this policy will not apply.

Where the Council considers that the landlord is not ˜fit and proper, in accordance with the HB regulations, no payments of LHA will be made direct to the landlord under the provisions of this policy.

In these circumstances the Council will decide who the most appropriate person to pay the LHA will be (other than the landlord), which is in the best interests of the tenant.

Where the amount of LHA is greater than the rent charged, the Council will pay LHA up to the level of the rent direct to the landlord, under the provisions of this policy. Any remaining payment of LHA over the amount of the rent charged will be due to the tenant. If the tenant has rent arrears the council will consider paying any excess LHA (above the rental liability) to the landlord until the arrears have cleared.

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