Will IDS recover Labour's LHA benefits overpayments ?

Discussion in 'Current Affairs, News and Analysis' started by BounceBanana, Oct 23, 2010.

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  1. The residential landlords assn is about to present a petition at number 10.

    Since April 2008, for what can only be spiteful ideological reasons, new Labour changed housing benefits rules. New tenants of private landlords were paid their housing benefits and entrusted to pay their rents with it. Private landlords could only get housing benefits paid directly to them from councils once a tenant had run up at least two months arrears.

    Hence the internet got busy and scumbag benefits fiddling tenants exchanged ideas on how to pocket two months rent and move once a year so as to pocket four months rent per year on top of their benefits.

    Research by the assn of about 900 landlords shows an average loss of rent circa £5,000 (not including the costs of any debt recovery or repossession actions)

    New Labour formed their change of housing benefits in such a way that tenants pocketing their housing benefits would not be a fraud. IE They got generous to benefits claimants with the landlords money.

    BUT it appears that new Labour (indifferent to the number of buy to let investors going bankrupt etc) may have slipped up.

    Because a claimant on means tested benefits is required to declare any income. And that includes each time they pocket several hundreds of pounds of housing benefits. A commensurate amount of money should then be deducted from their other benefits to maintain them at the means tested level of income.

    Which means that IDS should be able to institute recovery action against every housing benefits (LHA) claimant who ran up rent arrears. And recover to the exchequer every pound of housing benefits the bastards pocketed. It don't get the landlords their money. But it could put between half and one billion pounds back in the exchequer. I think the fraud recovery rate is £12.80 or so per week deduction from benefits.

    Which is a deduction from benefits at £12.80 per week for each thieving tenant for around six years.

    If this idea is taken up will new Labour protest that the tenants cannot afford it ? What made then them think that buy to let investors could afford it then ?
  2. awesome, get it done!!!
  3. Far too complex to ever be enacted. Professional welfare types will simply take any demand for repayment to CAB or a no-win-no-fee outfit and get them wrapped up in so much paperwork that it would be far more expensive to pursue than to let go.

    Aside from which, they're already 'on the breadline' on paper, so where are these repayments going to come from?
  4. Even the “on paper” answer is that they are not on the breadline because that have an income they did not declare. In reality they have more disposable income that most of those who work.

    However, I am inclined to sort out the legislation so that they can be prosecuted for fraud. After all they are obtaining money on the grounds that they will use it to pay rent and then not using it for that, that is fraud in any normal sense of the word.
  5. With Clarke's plan to reduce the prison places over the next few years, where are we going to put these thieving individuals who no doubt will not pay any fine imposed on them by a court?
  6. That is one of the governments sillier plans, what we need is to make it cheaper to keep people in prison, by making the conditions worse, not reduce the numbers. Alternatively, let's go for the death penalty for persistent offenders, that will get the prison population down.
  7. The Coalition should change this ruling back. The whole reason it was set out was to prevent those who were feckless, dishonest Doley scrounging tenants from drinking/spending/drugging their rents.......

    But then, Labour were pandering to those same feckless morons who shouted the loudest about their bleeding "Umin Rites"....
  8. Bounce Banana

    Do you have evidence of this supposed change by Labour? I ask because I was offered the chance of taking my housing benefit and paying my landlord with it - this well before 2008.
  9. I hope it does change and IDS has the balls to carry it through. My understanding of the change in payments was to enable DSS/Housing benefit claimants get access to better housing, prior to the change 'No DSS' was a big hurdle to overcome. If it can be proved that people have been fraudulently claiming, then they should have money deducted from their benefits as this will send out the message that if you cheat or fiddle the system and get caught you will be brought to account. I accept the point about complexity in implementing such a system.

    Another side to this is when a tenant can't or won't pay rent. A friend of mine spent 9-10 months getting his non paying tenants evicted. It wasn't easy and cost him a lot of money over and above the lost rental income. His best source of information of where he legally stood, apart from his solicitor, was the 'shelter' website. He found out that his tenants were using the law and him to raise a deposit for a house they were going to buy. Obviously this was hearsay but it was true, they moved out before the eviction into a new house apparently.
  10. Housing benefit reform:

    The government first aired its proposals to reform housing benefit (HB) in the paper building choice and responsibility: a radical agenda for housing benefit (2002). This set out the government's aims to:

    promote greater tenant responsibility through awareness of what is paid on their behalf;
    provide a shopping incentive enabling tenants to shop around for the best deal from local landlords;
    provide a "back-to-work" incentive to discourage worklessness; and
    streamline administration of HB.
    An unacknowledged aim may also be to gain greater control over the totality of HB paid out by detaching the assessment of claims from the rent actually paid by the tenant.

    The government developed the concept of a local housing allowance (LHA), which is:

    paid direct to the tenant rather than the landlord;
    based on the tenant's circumstances, rather than the rent actually paid;
    reassessed periodically according to prevailing rental values by the rent service within local "Broad Market Rental Areas";
    portable; and contain no provision for automatic annual increases.

    These proposals were further developed in the 2006 green paper A new deal for welfare: empowering people to work.

    The proposals were extensively tested in a series of pilots in the private rented sector (PRS), and with minor revisions, the government rolled out the LHA nationally on 7 April 2008, phasing it in to new tenants. The powers to implement the reforms are contained within the Welfare Reform Act 2007. More information on the LHA can be found here

    There remains longer-term concern that the proposals may cause landlords to cease taking HB tenants due to increased arrears and higher collection costs. The pathfinders did not allay these fears. There are also doubts about the extent to which LHA actually promotes shopping around or job seeking in practice. In the short term, however, it appears that LHA is more generous than previous assessments for the majority of tenants, and this has allayed the immediate fears of many landlords about arrears.

    Housing benefit reform: recent developments
  11. I thought there was something wrong with this thread.

    Just stated on Panorama. If, after 8 weeks of non payment, landlords have the right to claim housing benefits straight from the council and can take the tenant to the small claims court for any arrears.

    So, load of bollox then
  12. Whet,
    exactly they pocket 2 months rent then the private landlord can claim the dosh directly, read the original post again, or am i missing something.
    The councils used to pay housing benefit all rent directly to the landlord so mr druggy couldnt shoot the rent up his arm, thats what changed right?
  13. I was bringing to attention the second part of my post - that landlords take the tenant to court to claim the arrears - and all costs go to the tenant if found against.

    Sorry if you didn't understand