Post budget, Keith Saunders, customer support team leader at MIS AMS explains the changes to universal credit and how HA’s can manage it for the good of their tenants.

Universal Credit is the brainchild of former Work & Pensions Secretary, Iain Duncan Smith, Universal Credit (UC) has been designed to replace six means tested benefits and tax credits;

  • Income Support
  • Income based Jobseekers Allowance
  • Income related Employment and Support Allowance
  • Housing Benefit
  • Child Tax Credit
  • Working Tax Credit

The changes came due to claimants of benefits and tax credits having to do so in numerous ways and with different authorities.  This was seen as unwieldly and expensive to administer whereas the newly introduced system is designed to cut costs in administration, whilst making it easier for individuals to make their necessary claims.

The overall aim of UC is to simplify the process for both benefit claimants and the administration of claimants and to reduce the overall cost to the UK of the welfare benefits system. Cost savings are designed to be realised by ensuring that the correct benefits are claimed by those with the right to do so and through the reduction in government agency administration.

However, during the recent Budget speech [22 November 2017] the current Chancellor, Phillip Hammond, amended the UC system in three ways:

1)       The initial assessment period will no longer have the one week delay at the start built in, therefore reducing the wait for first payment to five rather than six weeks.  This will take place from February 2018.

2)       From January 2018, any new claimants of UC will be able to apply for a full month (rather than half a month) advance payment, which will be paid within five days.  This payment will be paid back over a period of twelve rather than six months.

3)       From April 2018, any existing Housing Benefit claimants making a claim for UC will continue to receive HB for a further two weeks, rather than it being stopped immediately as it is now.

Who does it impact and when?

UC impacts upon all those people that are making new claims for welfare support that would have been covered by one of those previously mentioned benefits or tax credits, or those making changes to existing benefit claims, in all areas where UC is currently operative.

There has been a gradual roll out of Universal Credit across the country, starting in various pilot areas in 2013, and with particular groups of the workforce, with completion of roll out originally scheduled for 2017.  Since then there have been numerous delays to the full implementation of UC, with many reasons given, including issues with IT systems, but current plans are for roll out to be completed towards the end of 2018.  It is not expected though that existing claimants of any of those previously outlined benefits and tax credits will be moved across to UC until sometime during 2019, unless they have a change in circumstances and need to amend their claim, therefore moving on to UC.

The impact of UC has been huge, and not necessarily in those areas desired by those that introduced it.  Claimants, particularly those with a Housing element are being hardest hit, with assessments taking five weeks, following an initial one week delay period.  This is leading to claimants often taking on emergency loans plunging them potentially in to further debt.  Similarly, Housing Associations are suffering with claimants falling in to immediate arrears, and where direct payments are then being applied for (similar to how Housing Benefit was paid directly) a further delay is being encountered, though this is offset by arrears being included within the direct payment, which perversely means the claimant then has less money.

ActiveH and Universal Credit

To help Housing Associations manage tenants on Universal Credit, MIS Active Management Systems has developed ProActive Arrears.  Working in conjunction with other areas of ActiveH (Rent Accounting, Reporting etc) ProActive Arrears allows Housing Associations to manage tenants that may be in difficulty or recognise tenants that may end up in difficulty.  Colour coding accounts to highlight the most important cases this allows HA’s to target accounts of the highest priority.

ProActive Arrears uses a series of complex formulae through trends in the account history of the customer to highlight the likelihood of the customer falling in to arrears, and highlights this accordingly.  Combining ProActive Arrears as part of ActiveH Rents gives a fully functional and transparent tool for the management of rent arrears.  Linking this in with the automated arrears processing make managing debt recover easier than ever before.

For any further information on ProActive Arrears please contact Luke Basnett, Sales Consultant, 08453302325.