Welfare Reform and Work Bill (HL Bill 69)

Welfare Reform and Work BillPage 20

(2) If—

(a) the tenancy of particular social housing comes to an end after part of a
relevant year has elapsed, or

(b) this section ceases to apply in relation to the tenancy of particular social
5housing after part of a relevant year has elapsed,

the requirement in subsection (1) has effect in relation to the part of the relevant
year falling before that time with a proportionate reduction in the maximum
amount of rent payable to the registered provider by the tenant.

(3) The amount of rent payable to the registered provider by the tenant in respect
10of the 12 months preceding the first relevant year is to be treated for the
purposes of subsection (1) as having been the greater of the following
amounts—

(a) the amount of rent that would have been payable in respect of those 12
months if the rate of rent applicable at the beginning of 8 July 2015 had
15applied during those 12 months, and

(b) if the Secretary of State consents to the use by the registered provider of
a different day (“the permitted review day”), the amount of rent that
would have been payable in respect of those 12 months if the rate of
rent applicable at the beginning of the permitted review day had
20applied during those 12 months.

(4) A consent given for the purposes of subsection (3) may be a consent given for
a particular case or for a description of cases.

(5) If a tenancy existing in the first relevant year began before the beginning of 8
July 2015 but less than 12 months before the beginning of the first relevant year,
25the tenancy is to be treated for the purposes of subsection (1) as having begun
at least 12 months before the first relevant year (and subsection (3) is to have
effect accordingly).

(6) For the purposes of this section a relevant year, in relation to a registered
provider, is—

(a) 30in the case of a private registered provider whose practice as regards
the greater number of its tenancies is to change rent payable no more
than once a year and with effect from a single date other than 1 April
(“the review date”)—

(i) a year beginning on the first review date to occur after 1 April
352016, or

(ii) a year beginning on the first, second or third anniversary of that
date;

(b) in any other case, a year beginning on 1 April 2016, 1 April 2017, 1 April
2018 or 1 April 2019.

(7) 40A private registered provider whose practice is as described in subsection
(6)(a) is to be regarded as having complied with the preceding subsections if it
treats tenants in its social housing as if its relevant years were the years
mentioned in subsection (6)(b).

(8) This section is subject to—

(a) 45section 26 (provision about excepted cases);

(b) Schedule 2 (further provision about social housing rents).

Welfare Reform and Work BillPage 21

22 Exceptions

(1) Section 21 does not apply in relation to a tenant of social housing if—

(a) the accommodation is low cost home ownership accommodation;

(b) the accommodation is both low cost rental accommodation and low
5cost home ownership accommodation (see section 71 of the Housing
and Regeneration Act 2008).

(2) Section 21 does not apply in relation to social housing that consists of or is
included in a property if, where the property is subject to a mortgage or other
arrangement under which it is security for the payment of a sum or sums—

(a) 10the mortgagee, or a person entitled under the arrangement to be in
possession of the property, is in possession of the property,

(b) a receiver has been appointed by the mortgagee, by a person entitled
under the arrangement to do so or by the court to receive the rents and
profits of that property and that appointment is in force, or

(c) 15a person has been appointed under or because of the mortgage or the
arrangement to administer or sell or otherwise dispose of the property
and that appointment is in force.

(3) If a registered provider’s interest in property that consists of or includes social
housing—

(a) 20was mortgaged or made subject to an arrangement other than a
mortgage under which the interest in property was security for the
payment of a sum or sums, and

(b) is sold or otherwise disposed of after the coming into force of section 21
by—

(i) 25the mortgagee or a person entitled under the arrangement to do
so,

(ii) a receiver appointed by the mortgagee, by a person entitled
under the arrangement to do so or by the court to receive the
rents and profits of the interest in property, or

(iii) 30a person appointed under or because of the mortgage or the
arrangement to exercise powers that consist of or include the
sale or other disposal of the interest in property,

section 21 ceases at that time to apply in relation to that social housing.

(4) The Secretary of State may by regulations provide for section 21 not to apply in
35cases prescribed by the regulations.

(5) Regulations under subsection (4) may in particular make provision about—

(a) tenants of a description prescribed by the regulations;

(b) tenancies of a description prescribed by the regulations;

(c) accommodation of a description prescribed by the regulations;

(d) 40accommodation which satisfies conditions prescribed by the
regulations, including conditions relating to the funding of its building
or refurbishment;

(e) events of a description prescribed by the regulations.

(6) Regulations made by virtue of subsection (5)(a) may include provision about
45tenants whose income exceeds, or whose household’s incomes exceed, an
amount prescribed by the regulations during a period prescribed by the
regulations.

Welfare Reform and Work BillPage 22

(7) Regulations made by virtue of subsection (5)(e) may include provision about
periods during a tenancy when the rent payable is temporarily reduced or
waived.

(8) Regulations under this section must be made by statutory instrument.

(9) 5A statutory instrument containing regulations under this section is subject to
annulment in pursuance of a resolution of either House of Parliament.

23 Exemption of a registered provider of social housing

(1) The regulator may issue a direction mentioned in subsection (2) in respect of a
private registered provider if—

(a) 10the condition in subsection (4) or (5) is satisfied, and

(b) the Secretary of State consents.

(2) The directions are—

(a) a direction that section 21 does not apply in relation to a private
registered provider specified in the direction;

(b) 15a direction that section 21 is to have effect in relation to a private
registered provider specified in the direction as if in section 21(1) for “at
least 1% less than” there were substituted “no more than”;

(c) a direction that section 21 is to have effect in relation to a private
registered provider specified in the direction as if section 21(1) required
20at least the lesser reduction specified in the direction;

(d) a direction that section 21 is to have effect in relation to a private
registered provider specified in the direction as if section 21(1) required
the private registered provider to secure that the amount of rent
payable by a tenant of their social housing increased by no more than
25the percentage specified in the direction.

(3) The regulator may specify in a direction—

(a) the period during which it is to have effect, and

(b) the social housing in relation to which it is to have effect.

(4) The condition in this subsection is that the regulator considers that complying
30with section 21 would jeopardise the financial viability of the private registered
provider.

(5) The condition in this subsection is that the circumstances of the private
registered provider satisfy requirements prescribed in regulations made by the
Secretary of State.

(6) 35The regulator may publish a document about the measures that the regulator
considers could be taken by a private registered provider to comply with
section 21 and to avoid jeopardising its financial viability.

(7) The Secretary of State may issue a direction mentioned in subsection (8) in
respect of a local authority if the condition in subsection (10) or (11) is satisfied.

(8) 40The directions are—

(a) a direction that section 21 does not apply in relation to a local authority
specified in the direction;

(b) a direction that section 21 is to have effect in relation to a local authority
specified in the direction as if in section 21(1) for “at least 1% less than”
45there were substituted “no more than”;

Welfare Reform and Work BillPage 23

(c) a direction that section 21 is to have effect in relation to a local authority
specified in the direction as if section 21(1) required at least the lesser
reduction specified in the direction;

(d) a direction that section 21 is to have effect in relation to a local authority
5specified in the direction as if section 21(1) required the authority to
secure that the amount of rent payable by a tenant of their social
housing increased by no more than the percentage specified in the
direction.

(9) The Secretary of State may specify in a direction—

(a) 10the period during which it is to have effect, and

(b) the social housing in relation to which it is to have effect.

(10) The condition in this subsection is that the Secretary of State considers that the
local authority would be unable to avoid serious financial difficulties if it were
to comply with section 21.

(11) 15The condition in this subsection is that the circumstances of the local authority
satisfy requirements prescribed in regulations made by the Secretary of State.

(12) The Secretary of State may publish a document about the measures that the
Secretary of State considers could be taken by a local authority in order to
comply with section 21 and to avoid serious financial difficulties.

(13) 20Regulations under this section must be made by statutory instrument.

(14) A statutory instrument containing regulations under this section is subject to
annulment in pursuance of a resolution of either House of Parliament.

24 Enforcement

(1) Part 2 of the Housing and Regeneration Act 2008 is amended as follows.

(2) 25In section 220 (grounds for giving an enforcement notice to a registered
provider), after subsection (11) insert—

(11A) Case 11 is where the registered provider has failed to comply with
section 21 of the Welfare Reform and Work Act 2016.”

(3) In section 227 (grounds for imposing a penalty on a private registered
30provider), after subsection (7) insert—

(7A) Case 7 is where the registered provider has failed to comply with
section 21 of the Welfare Reform and Work Act 2016.”

(4) In section 237 (grounds for requiring a private registered provider to pay
compensation), after subsection (3) insert—

(4) 35Case 3 is where the registered provider has failed to comply with
section 21 of the Welfare Reform and Work Act 2016.”

(5) In section 247 (management tender), in subsection (1), after paragraph (a) (and
before the “or” following it) insert—

(aa) a registered provider has failed to comply with section 21 of the
40Welfare Reform and Work Act 2016,”.

(6) In section 251 (appointment of manager of a private registered provider), in

Welfare Reform and Work BillPage 24

subsection (1), after paragraph (a) (and before the “or” following it) insert—

(aa) a private registered provider has failed to comply with section
21 of the Welfare Reform and Work Act 2016,”.

25 Further provision about social housing rents

5In Schedule 2—

(a) Part 1 makes further provision about the maximum amount of rent that
registered providers must secure is payable in respect of a relevant year
or part of a relevant year by a tenant of their social housing in England;

(b) Part 2 contains provision about exceptions, exemptions and
10enforcement;

(c) Part 3 contains general provision.

26 Provision about excepted cases

(1) The Secretary of State may by regulations make provision about the maximum
amount of rent payable to a registered provider in respect of a relevant year, or
15a part of a relevant year, by a tenant of social housing in relation to whom—

(a) section 21 does not apply because of an exception in regulations under
section 22;

(b) a provision about levels of rent in Part 1 of Schedule 2 does not apply
because of an exception in regulations under paragraph 5 of that
20Schedule.

(2) The Secretary of State may by regulations make provision about the maximum
amount of rent payable to a registered provider by a tenant of social housing—

(a) in respect of the part of the relevant year after an exception in
regulations under section 22 ceases to apply;

(b) 25in respect of the part of the relevant year after an exception in
regulations under paragraph 5 of Schedule 2 ceases to apply;

(c) in respect of the following relevant year (if any).

(3) Regulations under subsection (1) or (2) may, in particular, require registered
providers to secure that the maximum amount of rent payable in respect of a
30relevant year, or part of a relevant year, is an amount determined as specified
in the regulations.

(4) Regulations under subsection (1) or (2) may make provision about disapplying
or modifying a requirement in the regulations as it relates to a registered
provider.

(5) 35Regulations made by virtue of subsection (4) may, in particular, enable the
Secretary of State or the regulator to issue a direction that disapplies or
modifies a requirement as it relates to a registered provider.

(6) Regulations made by virtue of subsection (5) may provide for a direction to
specify—

(a) 40the period during which it has effect;

(b) the social housing in relation to which it has effect.

(7) Regulations made by virtue of subsection (5) may—

(a) provide for conditions to be satisfied before a direction is issued;

(b) provide for the regulator to obtain the consent of the Secretary of State
45before issuing a direction.

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(8) Regulations under subsection (1) or (2) may make provision about the
enforcement of the regulations, including provision applying Part 2 of the
Housing and Regeneration Act 2008 with modifications.

(9) Regulations under this section must be made by statutory instrument.

(10) 5A statutory instrument containing regulations under this section is subject to
annulment in pursuance of a resolution of either House of Parliament.

27 Rent standards

Sections 194(2A) and 198(3) of the Housing and Regeneration Act 2008 (the
powers of the regulator to set and revise standards relating to levels of rent) are
10subject to sections 21 to 23 and 26 and Schedule 2.

28 Interpretation

(1) In sections 21 to 27, this section and Schedule 2—

  • “affordable rent” and “affordable rent housing” have the meaning given
    by Schedule 2;

  • 15“local authority” has the same meaning as in the Housing Associations
    Act 1985;

  • “low cost home ownership accommodation” has the meaning given by
    section 70 of the Housing and Regeneration Act 2008;

  • “low cost rental accommodation” has the meaning given by section 69 of
    20the Housing and Regeneration Act 2008;

  • “private registered provider” means a private registered provider of
    social housing (see section 80 of the Housing and Regeneration Act
    2008);

  • “registered provider” means a registered provider of social housing (see
    25section 80 of the Housing and Regeneration Act 2008);

  • “the regulator” means the Regulator of Social Housing;

  • “relevant year” has the meaning given by section 21;

  • “rent” includes payments under a licence to occupy;

  • “service charge” means an amount payable by the tenant of particular
    30accommodation as part of, or in addition to, the rent, and which is
    payable, directly or indirectly, for services, repairs, maintenance,
    improvements or insurance or the landlord’s costs of management;

  • “social housing” has the same meaning as in Part 2 of the Housing and
    Regeneration Act 2008 (see sections 68 and 72 of that Act);

  • 35“the social housing rents provisions” means sections 21 to 27, this section
    and Schedule 2;

  • “tenancy” includes a licence to occupy;

  • “tenant” includes a person who has a licence to occupy.

(2) In the social housing rents provisions, a reference to the beginning of a tenancy
40is a reference to the day on which, under the terms of a lease or other
agreement, the tenant is entitled to possession under the tenancy, subject to
subsection (3).

(3) For the purposes of the social housing rents provisions, a tenancy of particular
social housing is to be regarded as having been assigned to the tenant under
45the following tenancy (and not as coming to an end) where—

Welfare Reform and Work BillPage 26

(a) that tenancy is followed by another tenancy of that social housing and
at least one person is both a tenant under the first tenancy when it
comes to an end and a tenant under the following tenancy when it
begins,

(b) 5that tenancy gives rise to another person’s statutory or assured tenancy
of that social housing by virtue of Part 1 of Schedule 1 to the Rent Act
1977 (statutory tenants by succession), or

(c) that tenancy gives rise to another tenancy of that social housing by
virtue of paragraph 13 of Schedule 1 to the Rent Act 1977 (change of
10statutory tenant by agreement and with consent of landlord),

but a tenancy of particular social housing is to be regarded as coming to an end
on being assigned by way of exchange (and the assignee is to be regarded as a
tenant whose tenancy began at that time).

(4) References to the tenant under a tenancy of particular social housing are to be
15read in accordance with subsection (3).

(5) In the social housing rents provisions, a reference to an amount of rent payable
to a registered provider for social housing—

(a) in the case of social housing that is affordable rent housing and is let at
an affordable rent, includes a reference to an amount payable by way
20of service charge, and

(b) in the case of other social housing, does not include a reference to an
amount payable by way of service charge.

Final

29 Power to make consequential provision

(1) 25The Secretary of State may by regulations make such amendments and
revocations of subordinate legislation (whenever made) as appear to the
Secretary of State to be necessary or expedient in consequence of any provision
of this Act.

(2) In this section “subordinate legislation” has the same meaning as in the
30Interpretation Act 1978.

(3) Regulations under this section must be made by statutory instrument.

(4) A statutory instrument containing regulations under this section is subject to
annulment in pursuance of a resolution of either House of Parliament.

30 Extent

(1) 35The following provisions of this Act extend to England and Wales, Scotland
and Northern Ireland—

(a) section 1 (full employment: reporting obligation);

(b) sections 4, 5 and 6 (life chances);

(c) section 9(2) and (6) (freeze of rates of child benefit for four tax years);

(d) 40section 10 and paragraph 2 of Schedule 1 (freeze of certain tax credit
amounts for four tax years);

(e) section 11 (changes to child tax credit);

(f) section 29, this section, section 31 and section 32.

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(2) The following provisions of this Act extend to England and Wales—

(a) section 2 (apprenticeships reporting obligation);

(b) section 3 (support for troubled families: reporting obligation);

(c) sections 21 to 28 and Schedule 2 (reduction in social housing rents).

(3) 5The following provisions of this Act extend to England and Wales and
Scotland—

(a) sections 7 and 8 (benefit cap and review of benefit cap);

(b) section 9(1), (3), (4) and (5) and paragraph 1 of Schedule 1 (freeze of
certain benefits for four tax years);

(c) 10section 12 (changes to child element of universal credit);

(d) section 13 (employment and support allowance: work-related activity
component);

(e) section 14 (universal credit: limited capability for work element);

(f) section 15 (universal credit: work-related requirements);

(g) 15sections 16 to 19 (loans for mortgage interest etc);

(h) section 20 (expenses of paying sums in respect of vehicle hire etc).

31 Commencement

(1) The following provisions of this Act come into force on the day on which it is
passed—

(a) 20section 8(7) and (8);

(b) sections 9 and 10 and Schedule 1;

(c) section 23;

(d) paragraph 6 of Schedule 2 and section 25, so far as relating to paragraph
6;

(e) 25section 29, section 30, this section and section 32.

(2) The following provisions of this Act come into force at the end of the period of
two months beginning on the day on which it is passed—

(a) section 1;

(b) section 2;

(c) 30sections 4, 5 and 6.

(3) Sections 7 and 8(1) to (6) come into force—

(a) for the purposes of making regulations, on the day on which this Act is
passed;

(b) for remaining purposes, on such day or days as the Secretary of State
35may by regulations appoint.

(4) Section 11 comes into force—

(a) for the purposes of making regulations, on the day on which this Act is
passed;

(b) for remaining purposes, on 6 April 2017.

(5) 40Sections 21, 22 and 24 to 28 and Schedule 2, so far as not brought into force by
subsection (1), come into force—

(a) for the purposes of making regulations, on the day on which this Act is
passed;

(b) for remaining purposes, on such day or days as the Secretary of State
45may by regulations appoint.

Welfare Reform and Work BillPage 28

(6) The remaining provisions of this Act come into force on such day or days as the
Secretary of State may by regulations appoint.

(7) Regulations under subsection (3), (5) or (6) may—

(a) appoint different days for different areas;

(b) 5appoint different days for different cases or purposes.

(8) Regulations under subsection (3), (5) or (6) may make such transitional or
transitory provision or savings as the Secretary of State considers necessary or
expedient in connection with the coming into force of the provisions to which
they relate.

(9) 10Section 176 of the Social Security Administration Act 1992 (consultation with
representative organisations) does not apply in relation to regulations under
this section so far as relating to section 7 or 8.

(10) Regulations under this section must be made by statutory instrument.

32 Short title

15This Act may be cited as the Welfare Reform and Work Act 2016.

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SCHEDULES

Sections 9 and 10

SCHEDULE 1 Meaning of “the relevant sums” and “the relevant amounts”

1 The “relevant sums” for the purposes of section 9 are the sums—

(a) 5specified in paragraph 1 of Schedule 2 to the Income Support
(General) Regulations 1987 (S.I. 1987/1967S.I. 1987/1967);

(b) specified in paragraph 1 of Schedule 3 to the Housing Benefit
Regulations 2006 (S.I. 2006/213S.I. 2006/213);

(c) specified in paragraph 25 of Schedule 3 to the Housing Benefit
10Regulations 2006 (S.I. 2006/213S.I. 2006/213);

(d) specified in regulations under section 4(2) of the Jobseekers Act 1995;

(e) specified in paragraph 1 of Schedule 1 to the Jobseeker’s Allowance
Regulations 1996 (S.I. 1996/207S.I. 1996/207);

(f) specified in regulations under section 2(1)(a) of the Welfare Reform
15Act 2007;

(g) specified in regulations under section 2(4)(c) of the Welfare Reform
Act 2007, so far as relating to the component under section 2(3) of
that Act;

(h) specified in paragraph 1 of Schedule 4 to the Employment and
20Support Allowance Regulations 2008 (S.I. 2008/794S.I. 2008/794);

(i) specified in regulations under section 4(6)(c) of the Welfare Reform
Act 2007, so far as relating to the component under section 4(5) of
that Act;

(j) specified in regulations under section 9(2) of the Welfare Reform Act
252012;

(k) specified in regulations under section 10(3) of the Welfare Reform
Act 2012 in respect of an amount to be included under section 10(2)
of that Act (but where more than one sum is so specified, only the
smaller or smallest of those sums is a “relevant sum”);

(l) 30specified in regulations under section 12(3) of the Welfare Reform
Act 2012 in respect of needs or circumstances of a claimant
prescribed by virtue of section 12(2)(a) of that Act (but not in respect
of needs or circumstances prescribed by virtue of section 12(2)(b)).

2 The “relevant amounts” for the purposes of section 10 are the amounts—

(a) 35specified in Schedule 2 to the Working Tax Credit (Entitlement and
Maximum Rate) Regulations 2002 (S.I. 2002/2005S.I. 2002/2005) for the basic
element, the 30 hour element, the second adult element and the lone
parent element;

(b) specified in regulation 7(4)(c) and (f) of the Child Tax Credit
40Regulations 2002 (S.I. 2002/2007S.I. 2002/2007).