HB migration

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  • #286482
    peterdelamothe
    Keymaster

    Well thats a bit of a shock to me.

    Shelter has called for a delay in most migration of HB to UC in a briefing note. We will ask DWP if they will be commenting and then include that in this weeks hbinfo newsletter. Those who came to the last HBINFO conference will remember we called for more involvement for Councils and landlords in the migration procedure (with funding). I cannot recall if Shelter were there this time.

    Meanwhile here is a link to the Shelter note.

    https://england.shelter.org.uk/professional_resources/policy_and_research/policy_library/briefing_note_managed_migration_to_universal_credit

    #286484
    John Boxall
    Participant

    The issue as far as I understand it is that the Tax Credit Computer System is reaching the end of its life and will either need major work done on it or run the risk of a major breakdown.

    Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. The blossom is blighted, the leaf is withered, the god of day goes down upon the dreary scene, and—and in short you are for ever floored.

    Wilkins Micawber, Ch12 David Copperfield

    #286491
    peterdelamothe
    Keymaster

    John…I think more important is the number of people on tax credits who have not understood the move to UC. So they have not claimed as much as expected. Now if that happens in HB it may well mean a lot of evictions and arrears. DWP do not seem to think this is likely. Councils will not be involved in the process and will not be funded (advised by DWP at the last hbinfo conference).

    My worry is that long term HB claimants who have been on HB for many years will just think “nothing to do with me….the Council pays my rent”. Without funding, many Councils will not be able to do much to help (how can they, with so many in dire finances). Result….even more turning up at homeless persons. My local Council already spends half of its revenue on homelessness.

    I think it is fair to say that DWP do not agree with me but Shelter do (at least in part).

    #286492
    John Boxall
    Participant

    It seems to me that the DWP have suddenly pulled their finger out certainly in respect of those on Tax Credits and then left the ESA ones for another 4 years

    Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. The blossom is blighted, the leaf is withered, the god of day goes down upon the dreary scene, and—and in short you are for ever floored.

    Wilkins Micawber, Ch12 David Copperfield

    #286612
    TF GRANT
    Participant

    Hello, I am now writing a paper to our corporate leaders on UC migration and what this means for LAs. I wondered if you could help me in understanding how overpayments currently being recovered from weekly reclaim will affect the subsidy claim once these cases migrate to UC?

    I understand recovered overpayments are shown in the headline cell for which we receive full subsidy on I believe. So, if the value of overpayment recovery through weekly reclaim is no longer in place does this mean we in effect lose subsidy?

    Thanks

    #286615
    Peter Barker
    Keymaster

    I’m not sure I understand what you mean.

    The only recovered overpayments that affect subsidy are DWP error overpayments, where you cannot have the original 100% subsidy on the overpayment and keep the recovered money as well. Anything you have recovered towards a DWP error overpayment during the year is deducted from subsidy on new DWP error overpayments.

    In any other case, the subsidy on the overpayment is fixed whether you recover it or not.

    UC migration will make it more difficult to recover overpayments because you won’t be able to claw back deductions from future HB and you will join the end of a long queue for UC deductions, but this has no effect on subsidy as far as I can see.

    If I have completely misunderstood the question, I apologise, maybe try rephrasing it and the penny might drop!

    #286617
    peterdelamothe
    Keymaster

    Basically when working age claimants move to UC, local HB Services will be on their own with outstanding HB overpayments. Recover the money direct from the claimant or write it off. There is no intention to allow HB debt to be recovered from UC long term nor will IT system access be allowed long term just to recover HB debt.

    Senior civil servants have made it very clear to parliamentary committees that they believe local authorities have had a fantastic deal with overpayment recovery over the last 20 years and that the “gravy train” where LA’s have been able to make a significant profit from recovery cannot continue for ever. It is your debt and generous subsidy has already been paid on it (say DWP and I think they have a fair point). I am not sure why you think more will be paid. There wont be any more subsidy claims (with the exception of exempt /temp and pensioner). The end of migration will see the end of subsidy (in time and this is not going to happen overnight after nearly 50 years of HB). There might be adjustments to be made and DWP might set a time limit of two years say (I am guessing here). DWP are itching to say goodbye to HB after all these years and ditto many FD’s in Councils who feel the same. What was seen as an emergency system in the 1980’s for just a few years has lasted 45 years and counting. Bonkers.

    Nationally around £2 billion approx is owed in HB debt. The Government might agree to take this on albeit at a significant discount via one of their recovery vehicles. That still leaves pensioner HB debt of course.

    #286691
    cfowkes
    Participant

    Where did you get this information from please Peter. I certainly have not been told that HB debt recovery from UC will end once managed migration has been completed. And I am also not sure what this ‘gravy train is that you refer to. With the subsidy losses from supported accommodation my LA are always out of pocket even after taking into account income from overpayment recovery. I appreciate that not all LAs have supported accommodation subsidy losses but perhaps when you are talking to the senior civil servants this information can be relayed back.

    Subsidy for overpayments is something different to recovery of overpayments.
    Thank you

    #286698
    peterdelamothe
    Keymaster

    Hi CF. As I say above this came from discussions between very senior civil servants and parliamentary committees (which are a public record). This was discussed on hbinfo at the time. DWP made their views very clear at the time that Councils had had a very good deal indeed with overpayments (feel free to disagree!). We are talking people at the very top of DWP. I have spoken to them in the past on some issues but not on this.

    My current understanding is that when the working age cases are migrated you will be asked to provide the outstanding overpayment to DWP. Certainly they are funding this. But that still leaves a lot of old debt etc, changes, and appeals and the situation with tax credits and migration has been controversial.

    We can only wait and see whether debt management will still take OP cases when migration of working age cases is complete.

    HBINFO is not always able to report on discussions I am afraid. In fact we have been threatened with prosecution in the past if we did. Just the way it is. HB has often been very political. Those who attended the last HBINFO conference (DWP kindly spoke) will know that we felt it was wrong for DWP to exclude and not fund Councils during the migration process. We had a robust discussion with DWP which we reported at the time. We reported a couple of weeks ago that Shelter had issued a report saying mostly the same as hbinfo.

    More and more, the media are saying that UC is not fit for purpose.

    Today the Resolution Foundation has said “Universal Credit was designed to address unemployment – to encourage people who can work through incentives and increased conditionality such as stricter rules and sanctions.

    “None of that applies if the system deems you unable to work or having limited capability to work. You don’t have that kind of conditionality so you fall outside of what Universal Credit was designed to do.”

    All these many years later I am not sure what migration will bring with overpayments and other issues. We can only report what we can from the very highest level of DWP. The DWP staff were very honest at our conference and we said so at the time (whilst saying we felt it was the wrong approach).

    On supported accommodation cases, this has been discussed on hbinfo before. As you know DWP paid a lot of people without any evidence during covid. Then tried to revisit these cases. If they got no or not a full response and or the person has moved DWP will usually issue a “stop notice”. The legality of this is VERY disputed and in any event this does not end HB. Most members accept that the Council should then consider continuing the HB claim (usually on nil income and capital bearing in mind the clientele) or maybe using 104 until the end of the tenancy.

    #286752
    peterdelamothe
    Keymaster

    The prime minister has announced a faster pace to migration for pip claims getting HB. It was supposed to be 2029. Now end of 2025. A Labour government may have other plans of course so who knows.

    #286753
    rob-boxall
    Participant

    Letter received from Neil C on Friday states migration is now to start from September of this year for ESA cases.

    #286754
    peterdelamothe
    Keymaster

    Yes so end of 2025 will be finish. But it’s May next week so talk about no time left. The Chancellor just confirmed 2029 so talk about a sudden change of plan. Of course you can be cynical and say the likely chaos will then fall on a different administration

    #286757
    John Boxall
    Participant

    There is an election coming ……………..

    Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. The blossom is blighted, the leaf is withered, the god of day goes down upon the dreary scene, and—and in short you are for ever floored.

    Wilkins Micawber, Ch12 David Copperfield

    #286758
    peterdelamothe
    Keymaster

    One interesting point. HB was basically given to local councils in 1982/3 because rent arrears were soaring and especially council tenant rent arrears. As we are moving towards migration guess what? Council tenant rent arrears are soaring. Up 74 per cent. Guess what is being blamed? Yes the move to universal credit and payment direct to tenants being so hit and miss. What a shock. As if this was not highlighted a dozen times when UC was being designed.

    #286907
    Julian Hobson
    Participant

    got this on Thursday last – I don’t think the figures for my LA are correct however the push is interesting!

    Dear colleague

    Maximising Housing Benefit Debt Recovery

    Following the publication of the Housing Benefit Debt Recovery (HBDR) statistics in March 2024 (covering the period April to September 2023), we wanted to highlight the importance of continuing to maximise the recovery of Housing Benefit (HB) overpayments.

    As Working Age HB cases migrate to Universal Credit (UC) throughout the financial year ending (FYE) March 2025, it is critical for local authorities (LAs) to take-stock of their outstanding HB debts and ensure that all possible recovery methods are being fully utilised.

    We understand that attachment to ongoing HB is a key method of recovery for LAs but as increased volumes of Working Age HB cases move to UC, this recovery method will no longer be available. Therefore, we encourage LAs to:

    • ensure that appropriate maximum recovery amounts are being applied to ongoing HB cases while the cases are still in payment
    • fully explore and utilise alternative recovery methods as soon as ongoing HB ceases.

    For the FYE 2023, the national average percentage of recovery against total debt across Great Britain was 19%. The latest published statistics covering April to September of the FYE March 2024, show that, so far, your LA has recovered 8% against your authority’s total debt.

    Annex A provides some questions and answers regarding the above figure that you may find useful. The source data used to calculate this figure can be found in the published statistics (as linked to above).

    Between October and February of the FYE March 24, we held a series of HBDR workshops with LAs to share good practice and discuss recovery methods. We also learned, from LAs who attended, the many challenges faced with HBDR. Therefore, we want to continue supporting LAs in improving HB debt recovery and in in maximising their HBDR performance.

    To this end, the Performance Development Team’s (PDT’s) Performance Relationship Managers and consultants will be undertaking further LA engagement surrounding HB debt in the coming weeks and months.

    Ahead of any PDT engagement, if you would like to share any concerns with us regarding HBDR, please raise this with your Performance Relationship Manager or email lawelfare.pdtprm@dwp.gov.uk

    At the start of the FYE 2024, there was £1.7 billion outstanding in HB debt and this significant sum of money is government debt derived from taxpayer funds. Therefore, HBDR remains a high priority for the department in ensuring these funds are recovered by LAs so that they may be put back into public services.

    We look forward to tackling this important area of work with you.

    Yours faithfully

    Jonathan Bottomer
    Head of PDT

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