Enquiries concerning welfare changes, housing issues and personal debt were the top three areas for advice enquiries at the Ealing Advice over this summer.
The rise in welfare enquiries has occurred not only as a result of the Chancellor’s Summer Budget but from the roll out of Universal Credit for single adult claimants formerly on Job Seeker’s Allowance, both across the Borough and in other parts of the country.
The arrival of Universal Credit is later than anticipated but is nonetheless going to make a significant impact on individuals affected and also for landlords.
Housing enquiries in Ealing Advice relate particularly to rent arrears, and the change to Universal Credit is likely to see a rise in rents arrears as claimants adjust to changes. Initial teething problems and glitches with the system may also be expected leading to a rise in housing debts and arrears.
For most claimants, the main affect is in paying for housing. If you are affected you will need to make arrangements to meet these changes.
The key change is that Housing Benefit will no longer be available. Money to pay rent will have to come out of the Universal Credit payment you will be receiving.
THE IMPACT OF UNIVERSAL CREDIT IN EALING
Introduced by the Welfare Reform Act 2012, Universal Credit is designed to simplify the benefit system by replacing both Job Seeker’s Allowance (JSA) and Housing Benefit, providing a combined single benefit that will meet basic needs and encourage the move into work. In theory it is designed to be a benefit payment that resembles a low wage.
Much of the administration of Universal Credit will be centralised. Instead of claimant advisers, Job Centres may offer ‘job coaches’. Claimants are expected to apply on line. This may see Jobcentres in and around Ealing being closed.
This is going to be a particular problem for many claimants who have difficulty with computers and IT or who suffer from particular disabilities. Some provision may be made for telephone claims but the intended universal element of the scheme for on-line claims is undermined by the fact that BT has cut off over one million domestic landlines.
UNIVERSAL CREDIT – WHAT THIS MEANS IN EALING RESIDENTS
If you are affected by the change to Universal Credit it is important you contact your landlord to inform them of what is happening, particularly if your rent is normally paid direct to your landlord.
- If you have rent arrears as a result of the change to Universal Credit the, as always, the key advice for persons facing possession is to engage with the landlord and, if proceedings are commenced, always to attend court.
- The advice to attend applies to both rented accommodation and to mortgages (Many mortgage repossessions could also be avoided if persons actually attend court)
- Many rent possession actions get settled at the court door, a defence may exist if there is disrepair or if the landlord fails to prove an essential element of the case (for example by failing to serve the correct section 21 notice required under the Housing Act 1988).
UNIVERSAL CREDIT AND DEBT
Ealing Advice also continues to receive a large volume of calls in relation to personal debt. Debt advice is likely to rise with Universal Credit as the change may mean problems especially for individuals in-experienced with monthly budgeting.
- Key advice is always to pay priority creditors first from money after food (housing, court orders, energy bills and council tax)
- The most important of any debt is a person’s housing costs, either rent or mortgage as if housing cannot be maintained the payment of other debts and liabilities becomes an impossibility.
- Beware of demands from non-priority debt collectors (credit cards, banks, store cards, TV subscriptions etc). This is important because a person who is under pressure from aggressive debt collectors may panic into making a payment. Vulnerable individuals will be particularly at risk of high pressure tactics by some lenders.
UNIVERSAL CREDIT IMPACT ON LANDLORDS
Payment of the housing element of Universal Credit direct to a landlord
If you are going on to Universal Credit, wherever possible speak to your landlord before you switch over and discuss the position.
Some branches of the DWP are telling landlords that they cannot challenge a refusal to pay the housing element. However, when challenged, this is wrong as a matter of administrative law. All administrative decisions are open to appeal and judicial review.
One flaw with Universal Credit from the landlord’s point of view is that the housing element will not be payable until a claim has been registered, so a landlord may have to subsidise one week’s rent. Naturally, landlords are unhappy about this and many may pull out of providing accommodation for people on benefits altogether.
Thus tenancies in the future may only be granted to a person where Universal Credit is already in place.
BANK CHARGE DANGERS WITH UNIVERSAL CREDIT
Universal Credit is designed to be paid into banks held by claimants.
However, a danger of bank accounts is that bank charges may be imposed which leave a claimant without money or reduced money in their account.
If you are going to go on to Universal Credit then change account to a Building Society account, a Post Office account or Credit Union which do not impose any charges. This will avoid a payment being scooped up in bank charges.
A major concern with Universal Credit will be the use of sanctions. The use of sanctions has gone far beyond the original intentions of the sanctioning regime introduced in spring 2009 by the Welfare Reform Act 2008 and extended in 2013. Whilst many of these measures seem to have been geared at headlines, they may have a serious and disproportionate effect on a claimant.
One effect was to undermine the work programme itself in 2012-2013. By depriving a claimant of all means of support for weeks by a sanction claimants could not pay fares to get to interviews in central London. In turn the work programme providers could not get people into jobs and could not get paid by results,
Where a sanction is imposed the circumstances of the debtor need to be brought to the attention of the DWP as an appeal immediately.
Lord Freud recorded in Hansard 25th January 2012 Col 1061 a statement of the government’s intentions in respect of welfare decisions:
‘Decision-makers will be required to follow guidance when applying the law to the facts of the case where they consider a decision about a claim, sanctions for non-compliance with work-related requirements, a civil penalty or the recovery o
f overpayment. We spoke about the Wednesbury* principles at our seminar; decision-makers will have to consider all relevant matters raised by the claimant within a particular time period, including information about a claimant’s health condition and financial circumstances. I accept that there is room for improvement here, and we will make that improvement.’
Furthermore, Pepper v Hart  UKHL 3 allows the intentions of Parliament recorded in Hansard to be cited in courts and tribunals as a possible aid to interpretation of statutes.
- Associated Provincial Picture Houses v Wednesbury Corporation  1 KB 223