Wednesday, 25 May 2016

Guidance published after landlords voice concerns regarding loss of income

DWP spells out service charges eligible for benefit

The Department for Work and Pensions has published an ‘exhaustive’ list of service charges eligible for benefit in a bid to end uncertainty for social landlords.

Housing sector figures had raised concerns that fewer service charges might be covered by benefit after the DWP published new regulations.

Draft universal credit regulations published in the summer listed just three categories of eligible charges, whereas current housing benefit regulations only listed ineligible charges.

In the wake of concerns from housing sector figures that this could lead to a reduction in service charge eligibility and therefore income, the DWP redrafted the regulations last month to include four categories of payments.

The DWP then went one step further and on 21 December published guidance specifically aimed at social landlords listing exactly what charges can and cannot be claimed by benefit.

The Chartered Institute of Housing had previously raised concerns that charges for estate management, such as communal garden maintenance, may no longer be covered. However, these charges are listed in the new guidance. Sam Lister, policy and practice officer at the CIH, said: ‘We are pleased the government appears to have listened.’

However, housing benefit consultant Chris Smith warned there is still likely to be some uncertainty.

He cited a DWP survey published in 2010 showing that more than 400 descriptions of service charges are used by landlords. He said there could be legal disputes as social landlords try to ‘shoehorn’ charges into one of the four headings in the guidance.

According to the most recent global accounts for housing associations, service charge income is worth £870 million a year.

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