Welfare Reform – Under Occupation

Welfare Reforms - the reality for the people in Wythenshawe

Wythenshawe Community Housing Group (WCHG), the new parent company for Willow Park and Parkway Green Housing Trusts, is based in one of the most socially deprived areas of Manchester.  The effects of the under occupancy 'bedroom tax', which came into effect on 1st April, and the other proposed welfare reforms are going to hit their area hard - with devastating consequences for tenants, families and the community in general.

The Government have brought about changes to the benefits system in a bid to reduce the UK's welfare benefit costs and to increase the amount of people getting into work.

The changes to benefits will impact on all welfare benefits, including housing benefit, council tax benefit, tax credits and disability benefits. One of the most significant changes which will affect our tenants is the cut in housing benefit linked to the number of bedrooms in a home compared to the number of bedrooms that are required by the household - as defined by the government.

This statement has been prepared in consultation with other Housing Associations in Manchester and reflects a shared approach to the issues raised.

Wythenshawe Community Housing Group Statement

Willow Park and Parkway Green strongly opposed the 'bedroom tax' and, working alongside the National Housing Federation (NHF) and Chartered Institute of Housing (CIH), vigorously campaigned against the proposed changes that affect over a quarter of their tenants.

The reality is that there is an acute shortage of one and two bed properties in Wythenshawe which means that the working age tenants in this community are amongst the hardest hit in the country.

The looming Universal Credit due to come into force in October is also going to have massive implications for those in receipt of benefits.  Under this proposal, Housing Benefit will be paid direct to the recipient instead of the Housing Association, alongside other entitlements, in one monthly lump monthly.  Stark and competing choices will have to be made.  Of course a real danger for those struggling to manage and the vulnerable is the legal but totally immoral Pay Day loan or even the illegal money shark, potentially pushing them into further debt difficulties.

What is the "Bedroom Tax"?

On the 1 April the changes to housing benefit came into effect, meaning that those tenants of working age will see a reduction in their housing benefit payments.  This is linked to under occupation and has been called the "Bedroom Tax" in the media.

For those with one extra bedroom a 14% reduction will be applied to their eligible rent and for those with two or more bedrooms a 25% reduction will be applied.  They will need to make up this money and pay it direct to Wythenshawe Community Housing Group.

In deciding whether a bedroom is 'extra' the government has rigid rules which take no account of individual circumstances. The government have also failed to recognise that there are limited options available for people to downsize to a smaller home.

What initiatives have Wythenshawe Community Housing Group put in place to assist tenants who will struggle to pay the under occupation penalty?

As a housing Group we will continue to highlight how these changes are affecting our residents as well as our ability to deliver new homes in the future.

We have been working closely with 3300 households that will be impacted throughout 2012 an 2013.  We have identified these residents using the data held in our systems, and by working closely with Manchester City Council Benefits Unit, who are responsible for housing benefit.  We also work closely with our partner agencies developing joint working to provide computer skills training and advice surgeries.

We have been contacting all affected residents to make sure that people are aware of the changes and we are working with them to explore potential solutions.

How much will Wythenshawe Community Housing Group customers lose in Housing Benefit?

Tenants under-occupying by one bedroom will lose an average of £11.87 per week in housing benefit and tenants under-occupying by two or more bedrooms will lose an average of £22.16 per week.

Over half of these households have taken the decision to remain in their homes and make up the shortfall in their housing benefit themselves.  For these households we are providing advice and support on budgeting, debts and employment. We can link you up with the Credit Union and refer you to Real Opportunities to help you back to work or training.

Does Wythenshawe Community Housing Group have enough small properties for tenants to downsize to?

The simple answer to this question is 'No, we do not'.  This is true for the majority of housing organisations and the Government is aware there are not enough smaller homes for tenants wanting to downsize.

However we are aiming to give extra rehousing priority to tenants wanting to downsize and our teams will work with tenants to find downsizing matches and support tenants through the removal process.

Is downsizing a viable option?

To the 12% of households that have said they want to downsize we are providing support and guidance.  So far 25* of our households have either already moved or are about to move into a smaller home to avoid being impacted by the change.  We give extra priority to customers wanting to move but we do not have enough smaller properties to meet the potential demand and it would take many years to rehouse customers needing to downsize within our area.

Depending on the circumstances we are also helping with things like removal costs, and support for moving as required.  Many others are also looking to the mutual exchange system through which to make a move into a smaller home.  We are committed to helping people to find exchanges and will be arranging exchange matching days and have opened a computer 'Hub' at our Northenden office which is open to the public to access the internet.  We also subscribe to www.homeswapper.co.uk and pay all membership costs for all our tenants. Homeswapper is a national exchange register that has about 300,000 homes listed by people wishing to exchange and is a good way of finding areas where they have smaller properties.

What is Wythenshawe Community Housing Group policy for dealing with arrears accrued due to under occupation?

We will continue to offer support and guidance to our residents as the bedroom tax and other elements of the Welfare Reform Act come into effect.  However, as a housing group we have a responsibility to all our residents to collect rent.  People can fall behind with their rent for many reasons and we need to treat everyone fairly, including when it comes to rent arrears.  This means that in some cases we may need to take action which includes seeking possession of properties.  Evictions are always the last resort but something we cannot rule out.  To not do so would significantly impact on our ability to continue to maintain and improve our existing residents' homes and to provide new homes for future residents.

We know the impacts of the bedroom tax will be deeply challenging for many of those affected. Our goal is to help all our residents hit by the bedroom tax find a way to cope.  We urge all our residents who are worried about paying their rent to contact us - the earlier you speak to us the more we can do to help.

We have also supported and will continue to support residents to apply to Manchester Benefit Unit for a Discretionary Housing Payment and have had 86 successful claims our households so far.

What can Wythenshawe Community Housing Group do to help residents find work?

It's much better to be in work or on the journey to work than living off benefits, and we can help with this, by referring our residents to the Real Opportunities service, which will provide support and advice in relation to work and training.  It is a good time to make use of the training being offered and Real Opportunities.  So far Real Opportunities has been responsible for getting a number of local people into work.

It is also an ideal time to address and take responsibility for your own finances.  We can offer advice in budgeting and debts.  Don't ignore bills and letters from the Council or Wythenshawe Community Housing Group, if we can't help we will signpost you to where the help is available.

Why does Wythenshawe Community Housing Group not simply solve the problem by re-classifying homes as smaller accommodation?

Whilst this may seem an easy and ideal solution the practical effects of doing so are anything but.  We would have to reduce rents if we re-classified homes and not everyone under-occupying is on Housing Benefit and making such a change would consequently be divisive and unfair.

It must also be remembered that any reduction in our rental income would be less to spend on services, repairs and ongoing home and environmental improvements, and would have an impact on all our customers.

Will Wythenshawe Community Housing Group use its operating profits to absorb the loss of rental income from those who cannot pay?

Wythenshawe Community Housing Group is a not-for-profit charitable company and any surplus income is reinvested in homes and services for the benefit of individual tenants and the wider community.

The cost of absorbing any rental income shortfall would be substantial and would lead to a reduction in services and our ability to spend on repairs and improvements for all our tenants and not just those affected by Welfare Reform changes.

Our Commitment

Wythenshawe Community Housing Group has so far invested time, staffing and financial resources to support our tenants through this very difficult time when they seek to cope with the Welfare Reform changes which affect them.

Wythenshawe Community Housing Group gives a firm commitment to its tenants that it will continue to pursue all measures within its power to help customers cope with Welfare Reform changes and stay in their homes.

Need Any Help?

If you need any help or assistance on Welfare Reform issues and under-occupation then please contact us on either 0800 633 5500 or 0300 111 0000

Welfare Reform – Under Occupation