STUDENT LOANS AND DEBT COLLECTORS

On  6th February 2017  the Government announced plans to sell the collection  of 12 billion pounds of outstanding student loans to private debt collectors. These are debts which have arisen from the failure to repay student loans taken out before 2006, which otherwise were normally recovered when a certain threshold in earnings was reached direct to the Student Loan Company and the Government.

LOANS IN THE LATEST SALE

The first part of the transfer covers loans which became liable for repayment between 2002 and 2006. The sale is being undertaken in accordance with the Sale of Student Loans Act 2008.

Normally, student loans become repayable when graduate income reaches a certain income threshold. The previous sale in November 2013 of £890 million in outstanding loans went to Erudio Student loans who paid £160 million for the right to recover this money arising from loans taken out between 1990-98. The conduct of the company led to numerous complaints and an apology when it tried to recover excessive amounts from students whose income fell below relevant thresholds.Displaying image.png

The latest announcement  means that many students or former students from the period  prior to 2002 may find themselves contacted by debt collection companies who will be seeking to collect the outstanding money.

For more information see:

http://www.studentloanrepayment.co.uk/portal/page?_pageid=93,3866911&_dad=portal&_schema=PORTAL

THE SALE OF STUDENT LOANS ACT 2008

Of particular concern is that section 3 of the Sale of Student Loans Act 2008 allows the purchaser to transfer the right to collect the loans to another debt collector. So the debt may end up with a different company to that the Government has selected. Under section 1(6) of the Act transfer can be made without the borrower’s consent.

Claims by debt collectors for student loans are already known to Nucleus and caution has to be taken with any claim or contact coming from a debt collector. Claims may arise not just for student loans but also for   unpaid fees arising from college accommodation or unpaid utility bill claims. Private debts collectors are also used for store cards and some  utility debts and many former bank debts.

SOME RULES FOR STUDENT DEBTS AND OTHERS PASSED TO DEBT COLLECTORS

  1. Everyone liable to repay a student debt included in this sale should receive a letter within 3 months from the Student Loan Company. The SLC will write to all customers, at their registered address, advising if their loans are included.2.Student loan related debts are not priority debts. They should not be placed ahead of paying rent, council tax and essentials such as food or utilities.
  1.  Debt collectors have no right to force or demand entry to your home – even if they suggest that they have. As a basic safeguard people should keep their doors closed and beware of bogus callers and people impersonating debt collectors.
  2. If telephoned or texted by someone purporting to be a debt collector do not share personal information or data – it may be a bogus caller. If the company is serious it will put details in writing.
  3. Anyone contacted about student loan debts should seek advice, particularly if a document from a court or purporting to be from a court is involved. It is important not to ignore anything that resembles a court claim but debt collectors have been known
  4. Liability to repay these debts cannot be transferred from the student to spouses, parents or third parties.
  5. A check should be made to see any paperwork is genuine, particularly to check if any right to recover the debt has been properly transferred in law to the debt collecting company,
  6. If an alleged debt is old – i.e. over 6 years it may be statute barred. This does not apply to alleged social security payments which since 2012 have no time limit on recovery (but may not be recoverable for other reasons).
  7. Any repayment agreement reached over a student loan should be one that is affordable, based upon ability to pay. If you have other debts then a payment plan needs to be worked out.
  8.  The amount being claimed should always be checked. With so many claims involved, the possibility of errors is considerable.

Social Tariffs are being phased out – what to do…

Home energy bills are one of the biggest expenses faced by many households.

But if 10% or more of your income goes on paying for your gas and electricity, the government classes you as being in “fuel poverty”.

And this means that you can qualify for grants and cheaper tariffs – called social tariffs – to help you cope.

What is a social tariff and who is it for?

Energy suppliers have been offering their most vulnerable customers cheaper tariffs for some time now.

Called social tariffs, they offer cheaper gas and electricity prices – regulator Ofgem’s rules state that they must at least match the cheapest deals available – and extra free services to certain customers.

You may qualify for a social tariff if you are over 60, on means-tested benefits, are living in fuel poverty or are on a low income.

How can I get on to a social tariff?

If you are not already on a social tariff, there is little point applying for one now as they are currently being replaced by the Warm Home Discount.

This is an annual credit the suppliers will subtract from your overall bill, currently worth £120.

There are currently two distinct groups that can benefit from the Warm Home Discount.

These are:

  • Households that are in receipt of the guaranteed element of Pension Credit
  • People on low incomes, living in fuel poverty or in receipt of benefits – in other words, the same people who qualify for social tariffs.

Most social tariffs have been phased out already

British Gas’ Essentials Combined, npower’s Spreading Warmth Tariff, Scottish Power’s Fresh Start Tariff and SSE’s Energycare Plus tariff, for example, have now all been closed to new applicants, while existing customers on these tariffs are being moved on to the Warm Home Discount.

It charges all customers the cheaper direct debit rate, even if they use another payment method and also offers an annual discount of £75 for dual fuel customers.

Other features of the tariff include free energy efficiency advice and free or discounted energy efficiency measures.

However, only EDF Energy customers who spend more than 10% of their income on household energy costs each year, or receive either Income Support and/or the Pension Credit, qualify for Energy Assist.

What else do suppliers do to help vulnerable customers?

Gas and electricity providers offer advice on everything from managing energy debts to improving your home’s energy efficiency.

Even if your provider no longer offers a social tariff, it is therefore worth contacting it to find out more about how it could help you cope with your bills, and whether you can benefit from the Warm Home Discount.

There may even be a fund to aid those really struggling to cope.

EDF, for example, operates an Energy Trust fund for its customers, from which it can draw funds to help vulnerable consumers clear their gas or electricity debt.

Is there any help available from the government?

The government provides energy efficiency grants, which can fully or partially cover the cost of home improvements such as installing loft or cavity wall insulation, for vulnerable customers in England, Wales and Scotland.

If you are at least 60 years of age, you may also qualify for a Winter Fuel Payment of between £125 and £400.

The Energy Saving Trust can give you more details about what grants may be available to you, while information about the Winter Fuel Payment and how you can apply for it can be found on the DirectGov website.

The ‘Home Heat Helpline’, which is funded by energy companies, also offers advice about social tariffs, grants for energy efficiency improvements, and benefits.

You can call it free on 0800 33 66 99.

PREPARING FOR AUTUMN AND WINTER ENERGY BILLS

Nucleus has long experience with advising on energy bills and debts. With the £23 000 benefit cap looming many people in receipt of benefits are facing a squeeze on income.

More people will be entering fuel poverty as a result this winter.

Under the old definition fuel poverty was where 10% or more of your available income went on fuel bills. The Government now uses the Low Income High Costs indicator. Basically, you will be in fuel poverty if you live in a cold or damp home which you cannot afford to heat and what money you have left puts you below the poverty line.

 

What to do

If you are facing difficulty paying your gas or electricity bills this autumn or winter 2016/2017 it is important that   you inform your energy supplier as soon as you can about your position and that you have  – or will have – problems in paying your bill.

 

Protected groups

 

You should not be disconnected between October to March if you are:

* a pensioner

* or have children under 18 If the supplier knows or has reason to believe you are such a customer, it must not disconnect you if you live alone or live with another pensioner or children under 18.

 

Other cases – hardship and poverty

If you are threatened with disconnection because you cannot pay your bill,  there are other methods of recovery. Disconnection of supplymust be a last resort.

 

Standard Licence Condition  27 issued by Ofgem which applies to all energy suppliers states:

 

  • You are entitled to a payment arrangement to repay your arrears at a rate you can afford.
  • To pay by regular instalments and through a means other than a prepayment meter.
  • If you are on a qualifying benefit to have an amount deducted from Fuel Direct
  • If you have not been able to manage a payment arrangement, you must be offered a prepayment meter (if safe and practical) as an alternative to disconnection.
  • The meter must be set to recover arrears at a realistic rate which you can afford.
  • If you are below pension age and your household includes persons who are of pensionable age, disabled or chronically sick,  Suppliers must take ‘all reasonable steps’ to avoid disconnecting your supply in winter.
  • You should be offered information about how you can reduce your charges by using fuel more efficiently

However, you will be expected to pay for energy you consume unless the supplier agrees to write-off an amount or you can get the bill covered by any advice agencies that have “Income Maximisation” services to tackle low incomes by making sure clients are claiming all the welfare benefits to which they are entitled. There is a free benefits check calculator on the Turn 2 Us websitehttp://www.turn2us.org.uk and they also have a telephone helpline. Nucleus can assist with this.

Nucleus can help with applications for benefits and dealing with energy debts and helping people fill in application forms.

The energy regulator Office of Gas and Electricity Markets (Ofgem) and the Government take the view that the only way a consumer can really combat rising energy costs is by shopping around for the best deal and switching to a cheaper tariff or cheaper energy supplier.

The energy regulator Ofgem has a list of approved price comparison websites. You can visit their energy shopping website at http://www.goenergyshopping.co.uk/en-gb/how-to-shop

However, a lot of people are not able to engage with the internet or resources on the web. From experience Nucleus recognises that many people may have difficulties with switching like this. We offer help and advice to individuals and organisations assisting people with these problems and also help with applying for grants and bills.

People affected include partially sighted and disabled people and those who have difficulty with written and spoken English (however occasioned), many of the elderly or those who have had telephone  land-lines disconnected. Web-based services are difficult for many of those who are the most vulnerable to used (we realise not every disabled person is Stephen Hawking or a team GB Para-Olympian).

If you don’t feel confident enough to switch yourself, some local councils and housing associations have Affordable Warmth/Energy Efficiency officers who can guide you through the process.

If you do not currently have a central heating system in your home or if your existing system/boiler is broken, you can apply to www.britishgasenergytrust.org.uk which provides free grants for boilers/central heating systems. You do not need to be a British Gas customer to apply and the only criterion for applying is financial hardship. They help people in work as well as those in receipt of benefits.

 

AVOIDING DISCONNECTION

It is rare that an energy supplier will disconnect your supply completely.

More often than not, the supplier will apply for a Court Warrant through the magistrates’ court to gain legal access to your property to change your meters to pay as you go meters.

It is important you attend any hearing to explain your position.

Any debt on the account(s) will be transferred onto the pay as you go meters so every time you put credit on the meter, it will deduct money to repay the debt. For example, if you put £10 credit on the meter, it may deduct £3 to repay the debt. There could also be additional deductions from the meter for standing charges and to replace any emergency credit used.

If you are on a low income and you are on pay as you go meters, this can lead to self disconnection because if you haven’t got the money to top up your meters, you cannot afford to have a gas or electricity supply in your home. This is why it’s important to make sure you are claiming all the benefits you are entitled to.

Priority Services Registers for vulnerable customers (people who are disabled, of pensionable age or have long term health problems.) are operated by some suppliers

If you have a health problem or you are elderly, I recommend telephoning your energy supplier to inform them of this and request to be added to the Register.

 If you do get into financial difficulties paying your bills, the energy supplier will have to take into consideration your vulnerability when considering enforcement action. Additional services can also be provided such as a password scheme or bills printed in large print.

Social tariffs for vulnerable clients  over 60, on means-tested benefits, are living in fuel poverty or are on a low income have been able to claim a special tariff  – THESE ARE BEING PHASED OUT : If you are not already on a social tariff, there is little point applying for one now as they are currently being replaced by the Warm Home Discount.
For more information please refer to our news item on social tariffs. 

If you have a large debt with your energy supplier which you are struggling to repay, there are several charitable trusts which provide free grants to clear gas and electricity debts but it can take several weeks for applications to be processed.

If you are an EON customer, you can apply to http://www.eonenergyfund.com

If you are an N Power customer, you can apply to  http://www.npowerenergyfund.com

If you are an EDF customer, you can apply to http://www.edfenergytrust.org.uk

If you are a Scottish Power customer, you can apply to https://www.sedhardship.fund

Finally, if you are a British Gas customer it has http://www.britishgasenergytrust.org.uk (The British Gas Energy Trust accepts applications from customers of all energy suppliers but if your energy supplier has its own energy fund, you will be expected to apply to that first.

National Minumum Wage and National Living Wage

From 1 April 2016 the National Minimum Wage rises from £6.70   to £7.20 for people aged 25 or over and will be known as the  National Living Wage.wpid-minimum-wage.jpg

The NMW will continue to apply for those aged 21 to 24, with the premium added on top for those aged 25 and over, taking the total hourly rate to the national living wage.

The first increase will be introduced in April 2016, however, when workers will receive £7.20 an hour.

That compares favourably to the current £6.50 an hour minimum wage for over 21s. The government argues that a lower wage must apply to younger people in order for them to “secure work and gain experience” and to “maximise the opportunities” available to them.

A further increase of the National Living Wage to £9.00 is planned for 2020.

For more information see:

https://www.livingwage.gov.uk/

 

ARE YOU RECEIVING BENEFITS? – REPORT THE CHANGE!

If you are working on National Living Wage and receiving any form of means tested benefit or a council tax reduction, make sure you contact the DWP or the local council.

The increase of pay rates on 1 April 2016  may affect the level of benefit you receive.

For example if you are working a few hours as well as receiving income support , universal credit or job seeker’s allowance or any other means tested benefit from the DWP, you should report the pay increase.

Similarly if you get either housing benefit or a council tax reduction from your local council you should report the increase.

The duty to report changes in come is one placed on all benefit claimants and may avoid an overpayment of benefit or an accusation of fraud.

If you risk losing either housing benefit or council tax reduction you may be able to apply for a Discretionary Housing Payment or a Discretionary Council Tax reduction – contact Nucleus or Ealing Advice  for more information.

Nucleus at Toynbee Hall and Capitalise Debt Conference

Debt and the future of debt advice were themes explored at the Capitalise Debt conference held in London on 26 February 2016, organised by Toynbee Hall and the  Capitalise Debt partnership. The partnership is funded by the Money Advice Service (MAS) and attracted money and legal advice workers from across the capital.

Alan Murdie, chairman of Nucleus held a workshop for the conference telling attendees that council tax debt is biggest debt problem of our time, with local taxation debt problems now over-taking credit cards as the number one area for enquiries.
The workshop included a new and original presentation ‘A Brief History of the Council Tax 1993-2016’ explaining how the situation has come about and how council tax has been transformed which was well received by the audience.

Other speakers included Caroline Sairkiewicz, Head of the UK Debt Advice Service for the Money Advice Service, Jahanara Hussein  from the Hyde Group speaking on behavioural economics,  Alex MacDermott from the Financial Conduct Authority speaking on preparing for FCA regulation, and Sim Ilyas, client service manager for Averture speaking on new developments on insolvency.

Expanding Access to Immigration Advice for local residents

Do you know your rights about staying in the UK, whether you are allowed to work or bring your loved ones into the UK?  Do you want to apply to become a British Citizen?

Kezia Daley, Associate Solicitor at Darlingtons, is the latest volunteer solicitor to join our pro bono project.
She can give advice on many aspects of immigration such as: visas, work permits, immigration status, access to welfare benefits and seeking asylum.

Examples of problems that you may need advice on are:-

  • getting permission to stay in the UK longer than you originally intended
  • getting permission to do something which you are not at present allowed to do, for example, being allowed to work
  • bringing relatives into the country, for example, a spouse, fiancé(e), children
  • being threatened with deportation from the UK
  • being held by the immigration authorities in a detention centre
  • wanting a passport and not knowing whether you are entitled to a British passport or some other passport
  • wanting to apply to become a British Citizen
  • if you are already living in the UK but wanting to travel (for example, for a holiday), whether you will be allowed back into the UK
  • whether you are entitled to use state services or claim benefits, for example, education, health services, council housing, social security benefits, housing benefits, Council Tax Reduction
  • the right to vote
  • a relative or friend being refused entry to the UK when arriving at an airport or port.Advice is by appointmnet only, if you need help ring our adviceline and ask for more information.

Nucleus Urges engagement with consultations on local authority finding : Two important local Government consultations

Nucleus Legal Advice is urging people to respond to two important Government consultations on the future of local government funding. Local Government settlement 2016-2017 and Council Tax Support Review were launched in December but there are concerns many people have missed them. Nucleus is responding to both of these consultations as we deal with many clients who are supported by council services.
The first is: ‘Provisional local government finance settlement 2016 to 2017 and an offer to councils for future years’
See: https://www.gov.uk/government/consultations/provisional-local-government-finance-settlement-2016-to-2017-and-an-offer-to-councils-for-future-years

This consultation invites the views of interested parties on proposals for the local government finance settlement for 2016 to 2017, and for the approach to future local government finance settlements. This consultation is open to 15 January 2015 but Nucleus feels it should be extended because of the issues of flooding which affected parts of the country an the Christmas/New Year period. This consultation was only launched on 17 December 2015, we are concerned it is possible it may have been missed by many with responsibilities in local government.

The second consultation is on council tax reduction (CTR) schemes, launched on 2 December 2015 with a closing date of 12 January 2016. This is under to section 9 of the Local Government Act 1992 to review the effectiveness, efficiency and fairness of council tax reductions schemes and is being conducted by Eric Ollerenshaw MP.
https://www.gov.uk/government/news/launch-of-review-into-council-tax-support
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/481604/151126_ToR.pdf
Submissions on this review can be made to lctsreview@communities.gsi.gov.uk

The system of localised CTR has a disproportionate a impact upon taxpayers on low incomes. These problems are not surprising as 100% support by way of Council Tax Benefit (CTB) – abolished in April 2013 – was the cornerstone of council tax introduced by John Major’s Government in 1992. With its removal, liability to tax is being pushed upon those the system was originally designed to protect. Effectively, in many areas the change to local CTR has re-introduced a version of the poll tax or community charge in many areas. In May 2015 Citizens Advice reported that the number of cases of council tax handled by the charity increasing by 21% over the year, to 193,000 with council tax arrears becoming the biggest single debt issue seen by the charity in England for two years, and have overtaken other areas of debt. This experience has been mirrored by other charities and advice agencies throughout England and Wales and by Nucleus.
Nucleus is asking our local MPs to request the Secretary of State to extend the time limits for responses from the public and local government.
Alan Murdie, chairman of Nucleus commented “It is important that everyone with responsibility in local government and concerned for the provision of future services engages with these consultations on budgets and future spending allocation. In particular, the council tax reduction scheme needs to be changed to restore the 100% reductions for adults under pensionable age on low-incomes which were removed in 2013. “

Tax aid helps Nucleus client (finally) write of his tax debt.

ver the last few years we have noticed an increase with clients HMRC_2293694bfalling foul of bad decisions by HMRC.
The most recent example of the atrocious service HMRC are providing  involved a client who was sent  a bill for nearly £7,000 for an underpayment of tax.

Over the last year we have worked with Tax Aid to try resolve the issue. Our client, Jose had , at all times, reported all changes to his circumstances .
Despite Jose client  taking the initiative and staying in contact touch with HMRC , they:

  • repeatedly failed to respond
  • assessed him  on the wrong National Insurance  number
  • spelt his name wrong
  • sent the letters to the wrong address
  • linked him with two identities
  • sent him an unclaimed tax  refund of £1621 claimed he had underpaid  and owed £6800
  • repeatedly asked for higher payments extend the period for repayment.It took Nucleus’ and Tax Aid’s involvement, since January 2015,   to stop HMRC pursuing him for alleged money owed. Even then it’s taken a year  to get  a resolution –  with HMRC have finally agreed to write off the debt

The Public Accounts Committee’s recent report ( Nov 2015: service 80%.) found  that “HMRC is still failing to provide an acceptable service to customers”  as it fails to answer the majority of calls and that they  “could not tell us [PAC] when it would be able to do so” .

The committee said HMRC was only answering 39% of phone calls within five minutes, against a target of We welcome the report which states  that  HMRC produces a detailed plan setting out how and when it will provide an acceptable standard of customer

This echos a recent Citizens advice  report   which reported that the average wait  when calling HMRC is over 47 minutes which in turn costs clients like Jose  of £4.66  for each call they make to try and resolve their issue. Money client’s  like Jose can ill afford.

New protection for assured tenants

This months we have seen some much need ( small but welcome) improvements for short hold assured tenants:

 

  1. If there is serious disrepair which w you have reported you landlord may not be able to evict you for 6 months – as long as you have followed the correct procedure and involved the local authority who have served an improvement notice/ repair notice. This might not get the repairs seen to!
  2. For tenancies which first begin on or after 1st October 2015 it will not be possible to give a section 21 notice in the first four months of the tenancy. Possession proceedings must be commenced (where appropriate) within six months of the service of the section 21 notice.  In other words landlords will need  to “use it or lose it”.

 

 

 

 

 

 

http://ealingadvice.org/wp-admin/post.php?post=1417&action=edit&message=1

Major new Consumer Rights Act 2105

Consumer law changed on 1 October 2015, as the Consumer Rights Act came into force.
What are the key changes?

The most important reform under the new Act is the right to a refund within 30 days if you buy something that’s faulty, whether you shopped online, in a high-street store, or at any other retailer.

Now you have up to 30 days to return a faulty item and you will get all your cash back, no questions asked. Previously the law wasn’t clear about the time limit – in fact it was defined as a “reasonable length of time”. That gave retailers the opportunity to wriggle out of treating you fairly by setting their own “reasonable length of time”, which could be as little as seven days in extreme cases.

What about rights when you buy digital items?bigstock-Legal-Advice-Wooden-Wall-Hands-76456850

For digital buyers, this will be the first time they have been given clear legal protection. The new rules will cover any digital content –anything you download or stream – including apps, music, movies, games or ebooks.

Anything else I should know?

Challenging unfair terms should now be much simpler. The key terms of a contract, including price, can now be assessed for fairness. Previously they were exempt from a fairness test if they were written in plain language. The change means that a company won’t now be able to enforce unfair terms.

Will retailers abide by the new rules?

They will have to or they will face possible prosecution. Crucially they must also ensure their staff are aware of the changes under the Consumer Rights Act 2015 so that they don’t run the risk of short-changing customers or breaking the law. You can find out all about the new rights at the Citizens Advice website – go. The consumer group Which? has also produced a useful guide to the Consumer Rights Act which you can find online at .