|Welfare Reform Bill - continued||House of Commons|
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162. The housing benefit and council tax benefit extended payment schemes provide access to a four week run-on of benefit in certain circumstances, after a qualifying person starts work or increases their hours / wages of current employment. There are two parallel schemes:
Generally the four week extended payment will be at the same rate of benefit as the person was receiving in the week before they took up work. This is intended to bridge the gap between leaving benefits and the first pay packet.
163. In order to be entitled to an extended payment a number of criteria need to be satisfied, which are set out in secondary legislation. For example:
164. Under the current scheme, a claimant's housing benefit or council tax benefit award is ended when they move off the qualifying benefit and meet the other criteria to enable payment of the extended payment. A fresh claim must be made in order to obtain any in work entitlement to housing benefit and council tax benefit.
165. These clauses provide for a simpler method of making extended payments and remove the need for those who receive extended payments to submit a fresh claim for any in-work housing benefit or council tax benefit. If a person stays in their original local authority for the extended payment period, then the amount of the extended payment would be the higher of the out of work housing benefit or council tax benefit they were getting or their in work entitlement to housing benefit or council tax benefit. The extended payment would be paid by the original authority, i.e. the authority that the person was living in just before they took up work. So the move to employment (and entitlement to an extended payment) would be treated like a change of circumstances in a continuing award.
166. If the person moved to a new authority in order to take up work, the amount of the extended payment would be the amount of their out of work housing benefit or council tax benefit entitlement and it would be paid as an extended payment by the original authority. They would not need to make a new claim to receive their out of work extended payment. However, if the claimant thinks that their in-work entitlement to housing benefit or council tax benefit exceeds their extended payment entitlement, they would need to claim in-work housing benefit or council tax benefit from the new authority. The new authority would pay as housing benefit or council tax benefit (not an extended payment) any amount by which the in-work housing benefit or council tax benefit exceeds the extended payment.
167. The current extended payment provisions are set out in regulations primarily made under powers in sections 130(2), 130(4) and 131(10) of the Social Security Contributions and Benefits Act 1992. The detailed rules are in: regulations 72, 73, 77, 78 and schedules 7 and 8 of the Housing Benefit Regulations 2006 (S.I. 2006/213); regulations 52,53, 58 and Schedule 7 of the Housing Benefit (Persons who have attained the qualifying age for state pension credit) Regulations 2006 (S.I. 2006/214); regulations 60, 61, 65, 66 and Schedules 6 and 7 of The Council Tax Benefit Regulations 2006 (S.I. 2006/215); and regulations 44, 49 and Schedule 5 of the Council Tax Benefit (Persons who have attained the qualifying age of state pension credit) Regulations 2006 (S.I. 2006/216).
168. Clause 29 is designed to recast the underpinning powers for extended payments.
169. Subsections (1) and (2) provide for the basic underpinning entitlement conditions for extended payments of housing benefit or council tax benefit, namely that a person entitled to housing benefit or council tax benefit would be entitled to such a payment for a prescribed length of time when his own or his partner's entitlement to one of a number of prescribed benefits ends, in prescribed circumstances, and certain prescribed conditions are satisfied (e.g. he is liable to make payments for the dwelling he occupies as his home). The detailed rules are expected to remain the same or similar to the current scheme, and will remain in secondary legislation to provide the flexibility to keep these under review. The length of the extended payment period is likely to be four weeks as it is now.
170. Subsections (3) and (8) provide for the extended payment conditions of entitlement take precedence over normal entitlement rules, in calculating the amount of housing benefit or council tax benefit during the prescribed extended payment period.
171. Subsection (4) clarifies that where a person meets the qualifying conditions for an extended payment, there would be no need to make a separate claim for the extended payment. (There would still be a requirement for certain notifications to be made to the local authority).
172. Subsections (5) and (6) provide for, in contrast to the current scheme, the local authority that was administering housing benefit or council tax benefit immediately before the claimant or his partner took up work shall fund and administer the extended payment, even if the recipient moves out of that local authority's area. The effect of this would be to avoid the claimant needing to re-claim any balance of their extended payment after moving, although they would need to apply to the new local authority for any in-work housing benefit or council tax benefit in the usual way.
173. As now, the Department expects that the method of calculating the extended payment will be contained in regulations, which are provided for by subsection (7). It is intended that the amount of the extended payment would be the higher of the out-of-work entitlement or the in-work entitlement. The effect of this is to ensure that the claimant is entitled to at least the amount of housing benefit or council tax benefit they were receiving before they started work or increased their income from work, during the extended payment period. However, in the small number of cases where a claimant moves local authority during the prescribed extended payment period the amount of the extended payment would be the out-of-work entitlement. If they suspect that they would be entitled to in-work benefit that is higher than this, they would need to make a new claim with the new authority in order to receive the additional amount. Subsection (10) provides for the extended payment to be offset against the in-work entitlement to achieve this.
174. Subsection (9) provides that regulations can prescribe how the entitlement under subsection (2) interacts with an entitlement of housing benefit or council tax benefit, whether the housing benefit or council tax benefit entitlement is claimed by the extended payment claimant or their partner. For example, regulations made under this provision could provide that the out-of-work award would continue during the extended payment period, although nothing would be paid on that award and what happens when the prescribed extended payment period finishes, i.e. how a claimant transfers back on to normal housing benefit or council tax benefit if they have in-work entitlement at that point. If the claimant is part of a couple, regulations can provide whether the calculation of the extended payment will be based upon the claimants or the partner's housing benefit or council tax benefit entitlement and how a partner's housing benefit / council tax benefit entitlement will be treated when an extended payment is in payment.
175. Subsection (11) provides that in a case where a person moves during the prescribed extended payment period, the amount payable by the new local authority can be reduced to nil. This is intended to cover cases, for example, where the extended payment in payment from Authority A was greater than the entitlement established by the claimant in Authority B, for example because he has moved to a lower rent area, or now has non-dependants living with him.
176. Some flexibility is provided by subsections (12) (a)-(c). Subsection (12)(a) provides that regulations may disapply subsection (8). Subsection (12)(c) provides that regulations may provide for benefit not to be reduced as mentioned in subsection (10). This flexibility may be needed if for example there are cases where the claimant has an unavoidable rental liability on two properties, either in the same or in different local authorities. Subsection (12)(b) is necessary to stop couples obtaining dual provision by changing which one of them is the housing benefit / council tax benefit claimant when they move from one authority to another.
177. Under the current primary powers, in certain circumstances, people who move between different local authorities have to claim again for the balance of the extended payment from the new authority for the remainder of the four week period. Clause 29 would instead provide that only one authority will be responsible for discharging the extended payment. If the claimant thinks that their in-work entitlement to housing benefit or council tax benefit exceeds their extended payment entitlement, they would need to claim in-work housing benefit or council tax benefit from the new authority. The new authority would pay as housing benefit / council tax benefit (not an extended payment) any amount by which the in-work housing benefit / council tax benefit exceeds the extended payment.
178. Clause 30 supports those arrangements by providing for in subsections (1), (2) and (3) that the Secretary of State can prescribe in regulations any modifications to the housing benefit and council tax benefit provisions contained in the Social Security Administration Act 1992, or subordinate legislation made in pursuance of that Act, which he considers are required in relation to extended payments. In particular, modifications made under subsection (1) (b) allow in cases where someone moves local authority area during the prescribed extended payment period, and they normally have their benefit paid in the form of a rent or council tax rebate, that the former local authority can make payments directly to the new local authority. The intention is that the secondary legislation under these subsections would avoid disrupting the normal method of benefit payment, and where appropriate, would complement the payment provisions under the new local housing allowance arrangements.
179. Subsections (4), (5), (6) and (7) relate to the proposed regulation-making powers, and ensure consistency with existing regulation-making powers in relation to housing benefit and council tax benefit entitlement.
180. Subsection (8) provides that payments under Clause 29 are classed as housing benefit and council tax benefit, for example for cross-references to these benefits in other legislation. For example, Schedule 7 of the Child Support, Pension and Social Security Act 2000, which provides the revisions and appeals mechanism for housing benefit and council tax benefit, would also apply to payments under clause 29.
181. Clause 31 provides specific details on the interpretation of terms used in Clauses 29 and 30, thereby clarifying specific terms and ensuring consistency with established legislation.
182. As part of their functions under section 122 of the Housing Act 1996, rent officers currently collect information about the private rented sector to enable them to make case specific housing benefit determinations and generic local housing allowance determinations. When making these determinations, rent officers are required to exclude housing benefit rents from their market evidence database to ensure that rents for housing benefit properties do not drive the levels at which individual or generic determinations are made, and thus drive housing benefit expenditure.
183. Under existing powers, regulations may only require local authorities to provide the information required for rent officers to consider a particular claim. The Bill would broaden this power by allowing the Secretary of State to prescribe that local authorities must provide such information as is necessary or expedient to enable rent officers to carry out their housing benefit functions. Local authorities would be required, for example, to provide information about local housing allowance cases, as well as the individual cases they still have to refer to the rent officer. This would ensure that rent officers can identify housing benefit properties that are not referred to them when the local housing allowance applies.
184. Clause 32 provides for new subsections (2A) - (2C) into section 5 of the Social Security Administration Act, which concerns the administration of claims and payments for housing benefit and certain other benefits. The new powers enable the Secretary of State to require prescribed persons to provide certain information to rent officers that is not linked to the determination of a particular claim, but relates more generally to information that rent officers require in order to carry out their housing benefit functions. It also enables him to require prescribed persons to provide information about awards of benefit, as well as claims for benefit.
185. One example of how the new powers in (2A)-(2C) could be used concerns information about properties rented by housing benefit claimants. It is important to ensure that rent officers receive information about local housing allowance cases so that they can exclude rents in relation to those properties when making determinations.
186. Subsection (3) of this clause would remove subsection (3) from section 5 of the Social Security Administration Act. This subsection provides for the general power in section 5(1)(h) for requiring prescribed persons to provide information and evidence for determining claims to apply to information required by a rent officer. This would no longer be necessary as the provision of information and evidence to rent officers are covered by the new subsections (2A)-(2C).
187. This clause establishes a clear gateway for the transfer of information from rent officers to the Department for Work and Pensions by inserting a new section 122F into the Social Security Administration Act. Subsections (1) and (2) of the new section 122F provide the Secretary of State with a power to require rent officers to provide housing benefit information to him or someone providing services to him in a prescribed manner and form.
188. This information would be used for social security purposes, along with the other purposes listed in 122F(1)(b)-(e). For example:
189. Currently under section 134 of the Social Security Administration Act 1992, and the housing benefit rules, housing benefit in the social sector must take the form of a rent rebate where the local authority administering housing benefit is the landlord. In other cases, it must take the form of a rent allowance. Both rent rebates and rent allowances can be paid by way of rebate to or by payment to the claimant (which includes someone on his behalf), or by a combination of rebate and payment to the claimant. Where the authority is the landlord it has an effective choice as to the manner of payment. Where the authority is not the landlord it cannot rebate the claimant's rent account and has to pay the claimant or someone on his behalf (such as a landlord, or a third party). Regulations set out the circumstances in which payment must or may be made to someone other than the claimant.
190. Clause 34 amends section 134 of the Social Security Administration Act. Subsection (2) replaces section 134(2) of the Social Security Administration Act with new subsections (2), (2A) and (2B). These allow for regulations to be made specifying the manner in which payment must be made. This would, for example, enable secondary legislation to prescribe when payment is to be made directly to the claimant, or to someone on their behalf or in respect of the liability the claimant has; or by rebating the claimant's rent account; or by a combination of these methods. This would ensure that the Secretary of State could ensure that payments were made to claimants, even where the local authority was the landlord.
191. Under the current arrangements set out in the Social Security Administration Act 1992, the Secretary of State may authorise persons to report to him on local authorities' administration of housing benefit and council tax benefit, and, in particular, their performance in the prevention and detection of fraud. The Benefit Fraud Inspectorate is the only 'person' so authorised. On receipt of a report from the Benefit Fraud Inspectorate, the Secretary of State must send a copy of the report to the local authority and may invite it to consider the report and submit its proposals for improving performance and remedying identified failings. After considering the report and any response from the local authority, the Secretary of State may give directions as to the standards which the authority is to attain and the time within which they are to be attained. Directions may also be given on the basis of certain other reports commissioned, or received, by the Secretary of State - for example in England and Wales, public interest reports sent to him by the relevant audit body.
192. Clauses 35 & 36 provide for greater flexibility for the Secretary of State in respect of the range of reports that could be used to trigger a direction, to include public interest reports and Best Value audit reports from the Controller of Audit in Scotland and Best Value reports from the Auditor General for Wales.
193. Clause 36 would also allow directions to be given on a wider range of matters than at present. An example of this might be to require the local authority to draw up benefits-related policy documents or to review existing benefits administration procedures. Additionally, they would allow the Secretary of State, in reaching a decision to give directions, to take into account information in addition to that contained in the report he has received and the authority's response - for example trends in performance.
194. In addition, clause 36 would enable the Secretary of State to require a local authority to consider a report and submit to him its proposals for improving performance and remedying identified failings. It also provides for him to vary or revoke any direction made, for example he would be able to vary a direction where a material change of circumstances had affected the local authority's ability to meet it.
195. Subsections (1) and (2) of clause 35 propose amendments to the Local Government Act 1999, to enable the Auditor General for Wales to send copies of Best Value reports that relate to any extent to the administration of housing benefit or council tax benefit to the Secretary of State.
196. Clause 36 amends section 139D of the Social Security Administration Act 1992, which currently provides for the Secretary of State to act on certain reports he receives on housing benefit and council tax benefit administration. Following consideration of a report and any response from the local authority, the Secretary of State may direct the authority to attain specified standards in its administration of housing benefits, within specified timescales.
197. Subsection (2) provides for the Secretary of State to use his powers of direction in respect of (i) public interest reports and (ii) Best Value reports referred to him by the Controller of Audit in Scotland. This restores the previous legislative position in relation to public interest reports that was inadvertently broken with the introduction of the Local Government in Scotland Act 2003.
198. Similarly subsection (3) would add Best Value reports, referred by the Auditor General for Wales, to the list of reports on which the Secretary of State can issue directions.
199. Under the present powers, when the Secretary of State receives a relevant report, he may invite a local authority to respond setting out its proposals for improving performance or remedying failings. The authority is under no obligation to respond. Subsection (4) would allow the Secretary of State to require the authority to submit its proposals for improvement. Subsection (5) further enables the Secretary of State to specify the information (and the format and timescales for the information) he requires from the local authority, to fully inform a decision on possible directions. This would not prevent the authority submitting other information it thought relevant to the Secretary of State's considerations. To ensure that sufficient time is given to the authority to consider its response, the Secretary of State would be required to give the authority not less than one month to respond and could extend this, for example where there were reasonable grounds for doing so following a request from the local authority.
200. Subsection (6) would allow the Secretary of State to also take into account any other relevant information he thought appropriate. This might include, for example, past statistical trends, or evidence of the authority's commitment to, and success in, the delivery of improvement.
201. The clause would also provide the Secretary of State with the power to direct a local authority to take any action he thought necessary or expedient to improve its performance and the timescales within which it must do so. The current powers, which allow the Secretary of State to specify the standards he expects an authority to attain and the timescales within which he expects them to attain them, remain by virtue of new subsection (3A). Where there are serious concerns in respect of a benefits administration matter, but a standard cannot be specified, the provision in the new subsection (3B) enables the Secretary of State to give a direction on that matter. The power allows him, for example, to require the authority to draw up a counter fraud strategy policy for benefits where none existed, or to review and make detailed proposals for improving a particular operational process about which there were serious concerns.
202. Subsection (7) is a consequential change to take into account the change in subsection (6). It maintains the current position, so that the Secretary of State may continue to make recommendations to an authority about the actions it might take to attain the standards set out in a direction.
203. A new stage of consultation with a local authority that is subject to directions is provided for by subsection (8). This places a requirement on the Secretary of State, before giving a direction, to give the local authority an opportunity to make representations about the directions to him. However, subsection (8) permits the Secretary of State to issue directions without consulting the authority about their content if he considered it a matter of urgency. In such an urgent case, the Secretary of State is required to inform the authority in writing of his reasons for not inviting representations from it before giving the directions.
204. Subsection (9) would insert a new section, 139DA, into the Social Security Administration Act 1992, enabling the Secretary of State to vary or revoke a direction when he thought it necessary to do so. He would be able to do so where he had received representations from the relevant local authority; to rectify an omission or error; or where there had been a material change of circumstances. For example, he might vary or end a direction where there was a change in legislation that meant that the direction no longer had relevance or needed to be changed in a material aspect. This subsection also requires the Secretary of State to write to the authority giving his reasons for making the variation and offer it the opportunity to make representations about the proposed variation.
Sharing of social security information
Clause 38: Social Security Information
205. This clause enables various gateways for the sharing of information and functions to be extended. These measures support joint working arrangements and are intended to improve the take-up and delivery of benefits and other services administered by the Department for Work and Pensions, local authorities and English county councils ("relevant authorities").
206. Currently section 7A of the Social Security Administration Act 1992 allows regulations to be made which enable the Department for Work and Pensions and local authorities administering housing benefit and council tax benefit to perform certain functions on behalf of one another. The section enables claims for prescribed benefits administered by the Department for Work and Pensions to be made to a local authority, and claims for housing benefit and council tax benefit to be made to the Department for Work and Pensions. It also allows the Department for Work and Pensions and local authorities to collect and forward information and evidence for each other's respective benefits as prescribed, whether or not it relates to an existing claim. However, the current provisions exclude English county councils because they only apply to local authorities who administer housing benefit and council tax benefit. They also make no specific provision for local authorities to use social security information they hold to promote the take up of benefits other than housing benefit and council tax benefit. And, current powers do not expressly permit relevant authorities to verify claims-related evidence and information on behalf of other relevant authorities.
207. Clause 38 extends these provisions by:
208. Specifically, this clause would amend the Social Security Administration Act 1992 by inserting (i) a new 7B section governing the use of social security information in connection with the administration and promotion of claims to social security benefits; and (ii) amending section 7A of that Act in connection with the receipt of claims and the collection and verification of evidence relating to claims.
209. There are specific provisions within the Social Security Contributions and Benefits Act 1992 which impose a duty on local authorities administering housing benefit and council tax benefit (local authorities) to promote take up of benefits for which they are responsible. However, there is no specific provision enabling a local authority or, following the amendment to section 7A, an English county council to promote the take up of benefits administered by the Secretary of State. This clause, through the inclusion of a new section 7B to the Social Security Administration Act, enables local authorities and English county councils to promote take up of benefits administered by the Secretary of State. As an example, the clause enables a local authority to use information obtained on a claim for housing benefit or council tax benefit to pre-populate a claim form for pension credit (which is administered by the Secretary of State). This partly completed form could then be submitted to the claimant to encourage them to apply for pension credit.
210. Subsection (2)(a) and (c) of clause 38 provides for English County Councils to perform, through regulations, benefit claims functions on behalf of other relevant authorities. Subsection (2)(b) of clause 38 inserts a provision into section 7A of the Social Security Administration Act that enables, through the making of regulations, a relevant authority to verify information or evidence that it receives in connection with a claim or an award of a specified benefit, in cases where that benefit is administered by a different relevant authority.
211. Subsection (1) of clause 38 provides for a new section 7B in the Social Security Administration Act. Subsection (1) of section 7B enables a relevant authority to use for a relevant purpose, any social security information which they hold. Subsection (3) clarifies that a relevant purpose is to be prescribed in regulations and must relate to a claim which is made or could be made for a specified benefit. This power broadens the boundaries governing authorities' use of the information that they hold.
212. Subsection (2) of section 7B is a regulation-making power to specify how a relevant authority is to use information and evidence that has already been used or verified and forwarded by another relevant authority. The purpose of this provision is to reduce claims processing times and the incidences of duplicate requests for information from customers. Regulations under section 7B could ensure that information and evidence that has already been used by the Department for Work and Pensions, for example, must, subject to certain safeguards, be accepted as correct by the receiving authority for purposes connected with another benefit claim. Without this provision, receiving authorities could opt to continue as before by requesting and verifying the evidence from scratch, thereby duplicating information requests to customers.
213. Section 7B defines the term "social security information" as covering information relating to social security (including child support and war pensions data), and also evidence obtained in connection with any claims or awards relating to these areas. The extension of the definition to include such evidence is necessary in order to include evidence obtained or verified under section 7A. Section 7B also clarifies that a "specified benefit" (in respect of which this clause applies) is to be prescribed in regulations, to provide maximum flexibility in developing these provisions.
|© Parliamentary copyright 2006||Prepared: 4 July 2006|