One of the landlords piloting the direct payment of housing benefit to tenants has warned the implementation of the bedroom tax has left it with a ‘crisis just around the corner’.
Ian Simpson, director of community housing and support at Bron Afon Community Housing in Wales, told the Chartered Institute of Housing’s annual conference this week that the landlord has seen a 146 per cent increase in tenant debt since the bedroom tax came in on 1 April.
Sixty two per cent of bedroom tax payments had gone unpaid by the end of June leading to the rapid increase in the sums owed by tenants.
The figure compounds a growing problem for the housing association which is struggling to manage the impact of welfare reform. Many tenants who moved over to receive their housing benefit upfront have already been shifted back to direct payment to the landlord, despite the organisation doubling the number of staff it employs to deal with rent collection.
Under the bedroom tax, working-age social housing tenants on housing benefit have their payments cut if they are deemed to have one or more spare bedrooms.
A dedicated bedroom tax team has been created at Bron Afron, but despite attempting to contact all 1,300 tenants affected just 22 have moved to smaller properties and 82 have been offered financial advice or support through discretionary housing payments.
‘Perhaps the only solution in the end, when people can’t move, is to brick up bedrooms and exclude them from the tenancy,’ Mr Simpson said.
Since Bron Afron began trialling direct payment of housing benefit, arrears have increased four fold. ‘That’s in spite of us making three times as much contact with that group as we did prior to them being on that [scheme],’ Mr Simpson said.
Risk assessments put in place by the housing association to establish which tenants would be likely to rack up arrears under the direct payment system proved unhelpful, he claimed.
‘People who were assessed as low risk, some have struggled like mad, and some who were assessed as high risk have coped fine.
‘The issue isn’t necessarily about behaviour, it’s about the fact that people have been trying to get on very low incomes and then something happens such as a washing machine breaks down. It may well be that that’s where the additional money gets spent’.
Welfare minister Lord Freud announced at the CIH conference that housing benefit payments will be switched from tenants to landlords if two months of arrears have been run up. However the payment will then switch back to the tenants six months after the arrears have been cleared.
He also confirmed a mechanism will be put in place to automatically recover rent arrears by docking benefit payments.