Universal Credit, learning from the direct payment pilots Christopher Smith, Regional Operations Director (East) CIH Eastern Conference 11 th November 2014
Quick Recap Universal Credit Centrepiece, flagship Welfare Benefit Reform (WBR) measure Combines 6 currently separately claimed, assessed and paid income-related benefits into a single benefit and payment: Working Tax Credit (WTC) Child Tax Credit (CTC) Income Support (IS) Income-based Job Seekers Allowance (JSA) Income-related Employment and Support Allowance (ESA) Housing Benefit (HB) The final benefit the vital one from a social landlord perspective.as payment of Universal Credit to made directly to the claimant, monthly in arrears. Universal Credit digital by design claims online, enquiries on line A responsive benefit claims are adjusted but not cancelled in response to variations in income to incentivise work when available
Quick Recap Direct Payment Demonstration Projects (DPDPs) Announced September 2011 by Lord Freud to test some key elements of social sector housing support under UC while protecting social landlords financial position First direct payments made June 2012, by May 2013 7,426 tenant customers involved 6 DPDPs altogether: Dunedin Canmore HA, with City of Edinburgh Council Bron Afon HA and Charter Housing, with Torfaen County Council Oxford Citizens (Greensquare Group),with Oxford City Council Sanctuary Housing, Bromford Group and Wrekin Housing Trust, with Shropshire County Council Family Mosaic HA, with Southwark Council Wakefield and District Housing, with Wakefield Metro District Council Subject to independent, external validation and scrutiny by Centre for Regional Economic and Social Research (CRESR)
Headlines the numbers outcomes Level of rent collection across the DPDPs 94.3%, arrears of 5.7% relating to 1.6m (note variation from 89% - 97%) By March 2013, 1,031 claimants subject to switchback of payment of HB direct to their landlord due to significant arrears issues (circa 15.0%) Levels of rent payment improved significantly from June 2012 beginning to May 2013 end level of outright nonpayment 27% of switchback cases at beginning reduced to 13% at end Underpayment and on an erratic, non-consecutive basis far more common than simple, outright non-payment 76% of tenants underpaid rent at least once whilst on direct payment, but 49% made no consecutive underpayment CRESR. there was very much a sense that many tenants started anew with each payment period, with it being a new challenge and event.
Behind some of the numbers outcomes Characteristics of underpayers: Younger, primarily 16-24, 25-34 In work those employed made up 23% of underpayers, only 16% of outright non-payers From multi-person households predominantly, not singles CRESR research and validation found that underpaying tenants had complex and precarious lives which made them susceptible (and exposed) to life events, such as family illness or the breakdown of a relationship Reinforced by high levels of disability (51%), experiencing outright affordability issues with level of rent (49%) and wider debt issues (54% behind with household bills, 38% with payment on a loan or other credit arrangement Key learning from HA participants also.
The Housing Association perspective on DPDPs learning Dunedin Canmore Housing whilst most tenants were paying their rent, huge (increased) efforts required to secure this resulting in other landlord services being compromised. Separating housing management and support from rent collection functions. Oxford broadening of the base of customer contact, interaction. brought us into contact with customers who until then we did not have a relationship with; they did not contact us and we rarely contacted them. Driven deeper, more qualitative customer relationships. Shropshire increased customer communication premium. We are placing a strong focus on communication, education and support for our residents stressing positive engagement with the DWP s Local Support Services Framework (LSSF) Family Mosaic need to improve, invest in supporting infrastructure Funding the additional cost of investment to upgrade IT systems, up-skill staff and automate resources
The Housing Association perspective on DPDPs learning, cont d Bron Afon reengineered pre-tenancy sign-up processes designed to minimise non-payment risks and prioritising resources within the organisation to meet the challenges of direct payment. re-aligning our digital inclusion, skills and work programmes around working age tenants Wakefield and District Housing the impact of household events and crises upon rent payment under direct payment. It is apparent that some tenants have little or no savings to fall back on in times of crisis and few options to access funds to cope with such events Interestingly, all committed to continuing with and extending the principle and practice of direct payment of Housing Benefit after the expiry of the formal DPDP project period as the centrepiece of their preparations for Universal Credit. This latter point the key learning for Circle..
Circle Housing Wherry HB2U Commenced June 2014, with 1,000 customers in the Broadland District Council area as a catchment area for voluntary transfer across onto HB direct Developed in partnership with the DWP including seconded member of DWP staff into CHW Income Team but not a DPDP and a fully independent Circle project Rather than straight, conventional switch to HB direct, HB2U looks to mirror triage assessment process for Universal Credit, in particular assessment of customer vulnerabilities/suitability re direct payment and eligibility for alternative payment arrangements (APAs) Additional staffing resources into CHW Income Team, underwriting of any increased rent arrears levels and resulting bad debt provision from Circle Group centre Detailed data recording system development for recording of customer outcomes, impact Tendered for independent validation, oversight.won by CRESR
HB2U early outcomes, progress 311 triages completed thus far 151 households signed up (48.5%) for HB2U, with 89 now actually receiving HB direct to themselves Rent roll for the 89 on accounts 436,260.rent arrears currently 2.74% (1.2% at Week 1) Highest risk group thus far for arrears previous part-hb customers. 77% of triaged households have own, independent internet access 94.5% have a bank account Of refusals to participate in HB2U, 78% are the customer not wanting to do so, with remaining 22% CHW decision making The latter clearly of interest (and being analysed in detail) re APAs under Universal Credit when customer opt-out not possible
Wider Circle approach to WBR Constructive engagement with the DWP mutual benefit and essential for long-term planning and risk mitigation, all the more so due to on-going uncertainty re Universal Credit roll-out timetable and macroeconomic realities mean welfare reform agenda here to stay WBR including Universal Credit a huge agenda and need to resource this properly for full, adequate response..circle combination of central, multi-disciplinary team plus range of issuespecific, project based work at RP level Wider context for the sector re rating agencies, funders assurance required re adequacy of preparations for WBR and Universal Credit in particular.. Universal Credit (UC), the hardest-hitting reform measure, has yet to be fully implemented, and HAs ability to adapt to it could become a credit differentiator Moody s Special Comment English HAs: Welfare Reform September 2014
Thanks for listening.any questions? Christopher Smith, Regional Operations Director (East) CIH Eastern Conference 11 th November 2014