Income Collection Policy
Policy reference number: CW-POL-INCOME1
Version number: 5
Date applies from: 8.10.2015
UNCONTROLLED IF PRINTED
Aim of Policy
For the purposes of this Policy City West Housing Trust is referred to as ‘the Trust’.
This Policy aims to maximize income for the Trust to ensure it remains viable. The Trust is a member of ForViva and ‘Viability’ is one of the Group’s five priorities, with income management identified as linked to delivery. This requires a clear, consistent and fair approach to the recovery of arrears.
The Trust is committed to promoting preventative action, personal contact with customers and financial inclusion and support. The Trust will work with customers and staff to promote a rent first payment culture, prioritising rent for payment above most other expenditure.
The Trust recognises that occasionally customers may have financial difficulties and be unable to pay their rent or other charges due. In these cases, the Trust will adopt a firm but fair approach to arrears recovery, offering all customers, where possible, clear, practical and affordable repayment plans.
The Trust will seek to maintain and sustain tenancies, with eviction as a last resort. Eviction has high social and economic costs and as such the Trust places great emphasis on preventative and support mechanisms, rather than reactive strategies.
The Trust will adhere to the Rent Arrears Pre-Action Protocol which aims to encourage pre-action contact between parties and provides a structure to be followed by the Trust when considering issuing court proceedings. The Trust will use methods of contact appropriate to the individual customer.
The Trust will ensure the confidentiality of its customers and their circumstances when dealing with other agencies or individuals. Authorisation will be sought from customers before any information is shared with a third party. The Trust will work with partner agencies to develop information sharing protocols and joint working arrangements to facilitate this.
The aim of this Policy is to set out how the Trust will approach the:
• collection of income due from customers; and
• prevention and collection of arrears whilst recognising and responding to the social needs of customers.
The Trust will, where financially viable, seek to recover debt owed.
The Trust will stress the importance of rent payment as a condition of tenancy and promote a payment culture to staff and customers. This includes informing all prospective customers, regardless of whether or not they are entitled to housing benefit, that they will be required to pay one week’s rent at the tenancy sign up. This payment will not be refunded until the customer terminates their tenancy and their rent account shows a credit balance.
This will apply to all customers with the exception of any homeless applicants, management move cases, domestic abuse cases, and any Local Authority Supported cases where the property has been offered and signed for within a four week turnaround and the customer is unable to afford to pay the one week’s rent payment due to the short timescale to be able to save the money. In these cases, customers will be expected to pay a weekly amount, additional to their basic rent payable, until their rent account is one week in credit.
These exceptions ensure that customers assessed as having a high level of housing need can move into their home as soon as possible. It also takes into account that some customers may be financially excluded, for example, customers who are homeless and not claiming welfare benefits or customers fleeing domestic abuse who may not have been allowed access to household income.
Customers with receive clear information regarding any charges payable in respect of the tenancy agreement. This will include the frequency of the charge, amount payable and the reason for the charge.
A range of payment options will be available to customers to enable timely payments to be made, including:
• Post Office;
• standing order;
• direct debit;
• Housing Benefit/ Universal Credit payments; and
• direct deductions from Department of Work and Pensions (DWP).
Frequency of payments
Property rental and garage charges are due weekly in advance. It is acceptable to pay multiple weeks in one payment, as long as that the payment is made before the rental charges are raised. Where cases are awaiting Universal Credit, a manual calculation will be completed to identify if any payments will be due to the account. In these circumstances, the customer will be advised of any charges payable by them.
In recognition that some customers may require additional support to access welfare benefits they may be entitled to, the Trust will provide appropriate advice where needed, including signposting to external agencies.
Court costs, rechargeable repairs and other service charges and costs will be identified separately and pursued in accordance with the hierarchy of debts.
Customers can obtain a copy of their account at any time on request.
The Trust will ensure that rent statements can be accessed online and will introduce customers to I-Housing which facilitates this service. Customers also receive a postal rent statement at least annually.
When a customer feels that the Trust has made a mistake and their statement of account is incorrect the Trust will investigate the situation and provide a detailed response explaining why any error occurred, or why the statement is assessed as being correct. Where appropriate, a revised statement will be provided showing any corrections.
Changes to charges
Customers will be informed of changes to rent and other charges at least one month before these changes come into effective. Customers will also be informed each year which weeks will be non collectable weeks. Customers will be advised that they should continue to make payments to clear arrears during these weeks.
All overpayments of charges will be refunded within a set timescale following an agreement between the Trust and the customer that there has been an overpayment by the customer. Other debts to the Trust or overpayments of welfare benefits must be settled first.
Hierarchy of Debt
A customer may have more than one payment account with the Trust, for example if they have court costs, a garage and/or rechargeable repairs.
Where a customer has arrears on more than one account, the following hierarchy of debt will be applied in relation to the collection of the debts:
• current tenant rent arrears;
• former tenant rent arrears;
• current garage arrears;
• former garage arrears;
• court costs associated with legal action to recover rent arrears;
• rechargeable repairs;
• other service charges; and
• other management charges.
Staff will be available to provide customers with support and assistance:
• at area offices;
• on the telephone;
• through home visits;
• by arrangement with customers at other venues; and/or
• by E-mail.
The Trust will arrange appointments to enable access, support and advice at a convenient time to the customer.
The Trust will work with other agencies (Housing Benefits, DWP, welfare benefits, Citizens Advice) and form strong working relationships with debt counselling agencies providing support and independent advice to customers in arrears. Due to changes to the welfare benefits system and the introduction of Universal Credit, relationships with existing partner agencies and new support services will be identified, strengthened and developed as these changes are implemented. The Trust recognises the need to develop links and where appropriate to re-negotiate or establish service level agreements.
The Trust will promote financial inclusion through links to credit unions, banks and other affordable credit options. Customers in arrears may also be referred to specialist debt counselling agencies or internal money advice or tenancy support services.
To prevent arrears and instill a payment culture, the Trust will support new customers. The sign up stage will:
• communicate to the customer their responsibility for rent payments including making and progressing claims of Housing Benefit or Universal Credit, for ensuring that rent and other payments are being made punctually and regularly;
• outlining the range of payment methods available and identifying the most appropriate method for the individual;
• where applicable, request the first week’s rent payment;
• explain the information on statements of account;
• offer assistance to complete Housing Benefit or Universal Credit applications;
• estimate income and calculate welfare benefit entitlement;
• encourage customers to sustain a payment agreement plan with set frequencies;
• offer a ‘benefits health check’ to ensure that customers are claiming all the sources of income they are entitled to;
• outline the range of support options for customers experiencing difficulties in paying rent and other charges;
• make customers aware of the range of local debt and welfare advice agencies, including the provision of contact information, and encouraging the use of these services;
• make it clear to customers that whilst support will be provided, non-payment of rent is taken very seriously and may lead to action that could result in them losing their home;
• identify housing support needed to sustain their tenancy and where support is not already in place or a condition of the tenancy, encourage the customer to take up an appointment to assess possible support needs;
• inform customers of non-dependent deductions; and
• inform customers they need to tell the Trust and any other relevant agencies, about changes in circumstances which may affect rent due and welfare benefit entitlement.
Housing Benefits / Universal Credit
The Trust will work with Salford City Council Housing Benefits department and DWP to progress cases on behalf of customers. Customers will be encouraged to provide authorisation for the Trust to liaise on their behalf to facilitate this.
The Trust will provide assistance to new and existing customers to complete Housing Benefit / Universal Credit and other welfare benefit claim forms.
Customers will be encouraged to authorise direct payment of Housing Benefits / Universal Credit to the Trust.
Recovery of arrears
Contact will be made with customers when their account is identified as being in arrears to make them aware of the situation and to identify if there is any assistance that the Trust can provide. Where the customer can not afford to clear their arrears the Trust will work out an affordable repayment plan.
Arrears collection by either the Trust or an agent acting on behalf of the Trust would be within guidelines and laws regarding harassment of debtors, such as Section 40 of the Administration of Justice Act or the Office of Fair Trading code of guidance on harassment.
The Trust will not seek to take legal action against a customer whose arrears are due solely to delays in the Housing Benefit / DWP system. Where a customer has accrued arrears because they have not provided Housing Benefits / DWP with correct information at the requested time, the Trust can take action that could result in the customer losing their home.
The Trust will always seek to support the customer to remain in their home and will seek legal action only as a last resort, when all attempts to reach an agreement for the repayment of the arrears have failed. The Trust will always make clear to customers that non-payment of rent and other charges could result in the Trust taking action that may lead to the loss of their home. Threats of legal action, where there is no intention to proceed, will not be made.
Copies of all legal documents will be provided to all customers named in the tenancy agreement. Where a tenancy is sole, the Trust will encourage the customer to keep other interested parties (such as partner, spouse) informed of any pending legal action.
Legal action for arrears will cease immediately if arrears and any associated legal costs are cleared and ongoing payments of rent are maintained.
The Trust will develop a good working relationship with the courts and participate in court user groups.
New tenancies created post 1st April 2013 will have the Ground 8 Possession clause in the tenancy agreement. This is not relevant for any transferring tenancies or customers who were already tenants of the Trust before 1st April 2013. Tenancies with this clause will be served with a Notice of Seeking Possession that states that we may seek mandatory Possession using Ground 8.
Customers being pursued for rent arrears through the civil justice system will have non–emergency and non-urgent repairs delayed until a satisfactory repayment agreement is in place.
Right to Buy
Customers will be made aware that Right to Buy / Right to Acquire applications will not be completed while their rent account is in arrears.
Former tenant including where tenancies have been abandoned
The Trust will seek to locate customers who have accrued arrears and have terminated or abandoned their tenancy. A debt collection agency may be used where other attempts have failed and it can be shown to be cost effective.
How the Policy will be delivered
This Policy is delivered by the Income Management team with support of all staff across the Trust. If staff become aware that there are problems with the effective operation of the Policy or associated procedures, they should report this to the Policy Owner. This feedback will be incorporated into the policy / procedural review process.
Documents for the following services / areas need to be followed to implement the Policy:
• income management;
• income collection;
• Former Tenants Arrears (FTAs);
• garage income collection;
• tenancy sustainability;
• equality and diversity;
• shared ownership; and
• repairs and maintenance.