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Benefit Sanctions Wrongly Leaving Landlords with Mounting Rent Arrears

RLA
Written by RLA

The RLA is concerned that sanctions imposed on Job Seeker Allowance (JSA) and Employment Support Allowance (ESA) claimants are unfairly leaving PRS landlords with mounting rent arrears.

The RLA is concerned that sanctions imposed on Job Seeker Allowance (JSA) and Employment Support Allowance (ESA) claimants are unfairly leaving PRS landlords with mounting rent arrears.

The problem is caused by the DWP misinforming councils on the proper status of JSA/ESA claims, following the imposition of a sanction.  This then prompts suspensions and cancellations of Housing Benefit/Local Housing Allowance (LHA) claims when there’s simply no justification for this.

The Chartered Institute of Housing (CIH) has produced reports covering this issue: http://www.insidehousing.co.uk/finance/‘unintended’-housing-benefit-cuts-hit-tenants/7001667.article

The problem has, if anything, got worse despite both the Department for Work and Pensions (DWP) and Councils are well aware of its existence, not to mention the unnecessary rent arrears and untold misery it inflicts on tens of thousands of tenants. Landlords, already reeling from some of the worst effects of welfare reform, are also experiencing mounting rent arrears, caused by this same issue, which needs to be addressed by both councils and DWP urgently.

Recently the RLA’s retained Housing Benefits Advisor, Bill Irvine, has been dealing with half a dozen cases involving around £15000 rent arrears. In all cases, the private landlords have been reluctant to pursue recovery action, believing the problem would resolve itself.  The landlords are now trying to have the lost benefits restored and avoid the need for legal proceedings to recover debt and evict tenants.

The sheer number of sanctions being applied against benefit claimants is staggering.  Claimants are deemed not to be doing enough to find work or refusing work when offered. During the year to March 2014, more than 1 million were penalised. There has been a corresponding increase in the number of councils suspending and, in many cases, later cancelling Housing Benefit/LHA, due to the implementation of sanctions on JSA claimants for breaking the “claimant commitment”.  These are sanctions which themselves impose penalties of between 4, 13 or 26 weeks loss of personal benefits – a double whammy!

JSA & ESA sanctions should not, in themselves, affect Housing Benefit. So why are so many awards being suspended and later cancelled, creating gaps in HB/LHA entitlement; unnecessary rent arrears; and tenancies being put in jeopardy?

The problem is associated with DWP and Council “information sharing” arrangements. Councils receive electronic notification from DWP when JSA & ESA claims are terminated, even if it’s only for a short period of time; sometimes as short as 1 day. The process is designed to minimise overpayments and prevent fraud but is also bringing claims to a premature end or prompting letters from councils asking if the tenant remains resident and/or entitled to LHA or not.

The shared information suggests the claimant’s DWP benefit has been terminated when in many cases, it’s only the payment of benefit which has been stopped. The claimant retains an underlying entitlement to JSA as they continue to register and actively pursue employment. The Housing Benefit regulations actually recognise the potential problem and provide “Someone is considered to be on income-based JSA on any day in respect of which it is payable to her/him, including……..days on which the claimant is entitled to income-based JSA but is disqualified from payment because he……….is sanctioned”.

However, at present, when a claimant has a sanction imposed, the DWP notification that JSA has been terminated casts doubt of the tenant’s continuing HB/LHA eligibility; prompting a suspension on the claim and a letter to the claimant, seeking an explanation of what’s happening. This letter should provide 30 days to respond, but often does not, or claimants may simply fail to reply. The common outcome is that claims are cancelled unnecessarily, creating rent arrears and potentially rental loss. When challenged about the cancellation, councils often invite “new claims” and refuse any request for backdating to the date of the original cancellation. Tenants, with their landlords help, should challenge the original flawed decision to cancel HB/LHA and should rarely, if ever, complete a new claim form.

The problem could so easily be resolved, if DWP’s information about the sanctions could be improved to reflect the fact it’s only a sanction and not termination of the JSA award. In that case, applying the HB regulation provisions, no suspension would be applied to the HB award, eliminating all the associated problems for tenant and landlord.  There is the question of whether the DWP need ever contact Councils in this situation at all.

Landlords encountering such problems need to be equipped to tackle them properly, as the rewards for their effort can be very significant for both tenant and landlord alike.   Bill Irvine explains how to tackle the suspensions & cancellations issue and much more besides, during his HB/LHA seminars.

In the case of the private sector, see http://www.rla.org.uk/landlord/courses/local_housing_allowance.shtml

One of the recent delegates, armed with the information Bill provided recouped £9,000 in “lost” Local Housing Allowance!  Bill can be contacted for help on bill@ucadvice.co.uk or phoning 07733 080 389.

The RLA is raising this issue with DWP and would welcome information about landlords’ experience in this area.  If you have had problems with non-payment of housing benefit of LHA as a result of a tenant being sanctioned, please let the RLA know.   Please email us at campaigns@rla.org.uk

About the author

RLA

RLA

The Residential Landlords Association (RLA) represents the interests of landlords in the private rented sector (PRS) across England and Wales. With over 23,000 subscribing members, and an additional 16,000 registered guests who engage regularly with the association, we are the leading voice of private landlords. Combined, they manage almost half a million properties.

1 Comment

  • Ive had so many LHA claims stopped through this, Hull Council, can be very difficult, and quite often just say that you need to contact the tenant. 1 Bills helping with is a tenant whos had his JSA suspended, thou Im not informed, back in February, then in September the council contact me advising that I owe them housing benefit as they had continued to pay the LHA until August. Its a nightmare out there, as the councils can claw back housing benefit up to 6 years ago.Huge THANK YOU to Bill, I dont know what id have done with out his help and assistance.

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