Miscellaneous

Clause 16: Income and capital: general

106.     This clause enables the Secretary of State to set out in regulations how the income and capital of a claimant (and their partner) is to be calculated for the purpose of determining whether a claimant is entitled to an employment and support allowance and, if so, how much is to be payable. Regulations under this clause will be based on the existing provisions for the purposes of income-related benefits (income support and income-based jobseeker's allowance) in the Income Support (General) Regulations 1987 (S.I. 1987/1967).

107.     Subsections (1) and (2) provide regulation-making powers to prescribe how income and capital will be assessed. It is intended that the regulations will provide that income may be averaged. In averaging income for fluctuating earnings, for example, the Secretary of State may take an average for a past period and a current period and apply it to a future period, as occurs in connection with income support.

108.     Subsection (3) provides a power to make regulations prescribing that a person is to be treated as having, or not having, certain income or capital. It also enables regulations to provide for income to be treated as capital, or vice versa. In particular, regulations could make provision about how capital holdings would be taken into account in relation to an employment support allowance. The intention is that a rate of return of £1 per week for every £250 will be applied to capital in excess of £6,000 and below the upper capital limit of £16,000. In the case of people in residential care and nursing homes this range would be between £10,000 and £16,000. Capital below this amount would not be treated as giving rise to income which is to be taken into account in the assessment. Certain types of actual income from capital will be relevant to the assessment. These are expected to be limited to income from boarders and sub-tenants in the person's own home and income from certain trusts. There would be different provision as to disregarding different types of income which is expected to follow the existing provision for income support.

109.     It is also intended that existing provisions in the Income Support (General) Regulations 1987 (S.I. 1987/1967) concerning unacceptable deprivation of income or capital will be applied to an employment and support allowance. These will contain provisions which state what unacceptable deprivation is. Thus, for example, a claimant may be treated as having a notional income from capital no longer in their possession if they have disposed of the capital solely or mainly to secure or increase entitlement to an employment and support allowance. This is the same as applies for the purposes of income support and income-based jobseeker's allowance.

Clause 17: Disqualification

110.     Clause 17 provides that in certain circumstances, similar to those which exist now at section 171E of the Social Security Contributions and Benefits Act 1992, a person can be disqualified from receiving an employment and support allowance for a period of up to six weeks. This may be because someone is limited in their capability for work because of their own misconduct, because they remain someone who has limited capability for work through failure, without good cause, to follow medical advice, or because they fail, without good cause, to observe specified rules of behaviour. The regulations will specify the circumstances and the matters which are to be taken into account when making such a decision, including the considerations to be taken into account in deciding whether or not the person concerned had good cause for the failure.

111.     Subsection (4) of this clause provides that unless regulations specify otherwise, a person shall be disqualified for receiving contributory employment and support allowance for any period where he is undergoing imprisonment or detention in legal custody, or is absent from Great Britain. This is similar to section 113(1) of the Social Security Contributions and Benefits Act 1992 which applies to incapacity benefit currently.

112.     This provision with a range of regulations will allow such a person to continue to be entitled to employment and support allowance whilst disqualified from payment. This is because once the period of disqualification has ended it is intended that awards will be resumed where it is appropriate to do so without the need to re-claim.

Clause 18: Pilot schemes

113.     This clause provides for pilot schemes to operate in relation to any regulations under Part 1 of the Bill excluding certain clauses identified below. A "pilot scheme" means a set of regulations made under subsection (1).

114.     Pilot schemes must have effect for a specified period not exceeding 24 months. Subsection (7) provides that one pilot scheme can be replaced by another pilot scheme which is the same or similar.

115.     Pilot schemes can apply to any regulations under the Social Security Administration Act 1992 which relate to the employment and support allowance as well as to any regulations under Part 1 of this Bill, apart from regulations under:

-     Clause 3 - deductions from contributory allowance;

-     Clause 8 - limited capability for work; and

-     Clause 9 - limited capability for work-related activity.

116.     It is intended to roll out full conditionality linked to participation in work related activity as resources allow. It is envisaged that in time pilot schemes may operate to explore different variations of the conditionality regime in order to understand what works best to help employment and support allowance claimants to work.

117.     Subsection (3) provides that pilot schemes may only be put in place for the purpose of ascertaining whether their provisions will facilitate or encourage claimants to obtain or remain in work. Subsection (5) provides that a pilot scheme may apply to different geographical areas, types of claimant or persons selected to meet certain criteria.

Clause 19: Relationship with statutory payments

118.     Clause 19 provides for the interaction of an employment and support allowance with statutory payments paid by employers, namely statutory sick pay, statutory maternity pay, statutory adoption pay and additional statutory paternity pay.

119.     Subsection (1) provides that a person is not entitled to an employment and support allowance at the same time as statutory sick pay.

120.      Subsection (2) provides that a contributory employment and support allowance is not payable at the same time as statutory maternity pay, except as regulations may provide.

121.     Subsection (4) makes similar provision in the case of statutory adoption pay.

122.     Subsection (6) makes similar provision in the case of additional statutory paternity pay.

123.     Subsections (3),(5) and (7) contain regulation-making powers to provide for the circumstances in which statutory maternity pay, statutory adoption pay and additional statutory paternity pay respectively may be paid at the same time as a contributory employment and support allowance.

Clause 20: Deemed entitlement for other purposes

124.     Where specified legislation leads to a loss of entitlement this clause enables regulations to be made so that a person can be treated as still entitled to employment and support allowance in order to retain their rights and obligations. This is similar to provisions which currently apply to incapacity benefit.

Clause 21: Supplementary Provisions

125.     This clause provides that the provisions set out in Schedule 2 have effect (discussed below).

Clause 22: Recovery of sums in respect of maintenance

126.     This provides the Secretary of State with powers, to make regulations so that payments can be recovered from people who should be paying maintenance to their spouse or civil partner but are not doing so, when the spouse or civil partner is receiving income-related employment and support allowance. These payments may be made to the Secretary of State. Similar provisions relate to income support (s106 of the Social Security Administration Act 1992) and income-based jobseeker's allowance (s23 of the Jobseekers Act 1995).

127.     Subsection (3) states that the regulations under subsection (1) may make provision about matters relevant to the determining of an application for such an order, the enforcement of such orders, and the rights of the Secretary of State in respect of such orders.

General

Clause 24: Regulations

128.     This clause makes additional provision about the regulation-making powers under this Part.

129.     Subsection (6) provides that regulations under clauses 10, 11, 12, 13 or 14 may make provision which applies only in relation to an area or areas specified in the regulations.

Clause 25: Parliamentary control:

130.     This clause provides that the first regulations under clause 12 (work-related activity) and regulations providing for a pilot scheme (clause 18) must be subject to the affirmative resolution procedure in the Houses of Parliament. Subsection (2) provides that all other regulations under Part 1 are subject to the negative resolution procedure.

Clause 26: General financial arrangements

131.     This clause explains that payments of contributory employment and support allowance would be funded from the National Insurance Fund and payments of income-related employment and support allowance would be funded out of the Consolidated Fund. It also provides for the repayment to those funds of any sums recovered in connection with payments of employment and support allowance.

Clause 27: Consequential amendments relating to Part 1

132.     This clause provides for the consequential amendments set out in Schedule 3. Subsection (2) enables regulations to make provision consequential on this Part amending, repealing or revoking any provision of earlier legislation.

Clause 28: Transition relating to Part 1

133.     This clause provides that the provisions in Schedule 4 relating to transitional arrangements for those currently on incapacity benefit have effect (discussed below).

PART 2: Housing benefit and council tax benefit

Clause 29: Local housing allowance

134.     The provisions in clause 29 provide for powers that would facilitate the national roll out of a new way of calculating maximum housing benefit, known as the local housing allowance, across the private rented sector. A version of the local housing allowance scheme is currently operating for private sector tenants in 18 local authority areas.

135.     The main secondary legislation dealing with housing benefit (referred to here as the housing benefit rules) is contained in the Housing Benefit Regulations 2006 (S.I. No. 213), the Housing Benefit (Persons who have attained the qualifying age for state pension credit) Regulations (S.I. No. 214) the Rent Officers (Housing Benefit Functions) Order 1997 (S.I. No.1984) and the parallel Rent Officers (Housing Benefit Functions) (Scotland) Order 1997 (S.I. No.1995).

136.     Under the current housing benefit rules for claimants in the private rented sector, the maximum amount of benefit that can be paid is the "Appropriate Maximum Housing Benefit", subject to reductions to take account of income. The Appropriate Maximum Housing Benefit is the weekly amount of rent eligible to be met by housing benefit, less deductions made in relation to non-dependants. The eligible rent is determined by establishing whether the rent charged is considered appropriate for the particular area, property and the claimant's particular needs. Local authorities are required to refer each individual case (with some exceptions) to the rent officer service ⁵. Rent officers decide whether rents are appropriate for the particular area or property and the claimant's particular needs using a system of 'rent restrictions' set out in The Rent Officers Orders. Rent officers must also deduct any charges included within the rent that are ineligible for housing benefit purposes, such as for the costs of fuel bills or meals.

⁵ Rent officer service is used here as shorthand for the role of rent officers. In England rent officers form an executive agency "The Rent Service" within the Department for Work and Pensions. In Scotland the Rent Registration Service is part of the Scottish Executive and in Wales the rent officers are located within the Housing Executive Directorate of the Welsh in the National Assembly Government.

137.     The local housing allowance would replace the existing rent restrictions by providing a new way to determine the maximum amount of housing benefit payable. Non-dependant deductions and reductions to take account of higher incomes will still apply. Any given claimant would be eligible, as a maximum, to the local housing allowance rate that applies according to the number and mix of occupiers, and the area in which the claimant lives. The detailed rules on how the local housing allowance is set would be in secondary legislation, as is the case under the current housing benefit rules. There would still be a need for rent officers to collect market evidence and consider geographical areas. However, rather than determining referrals on individual cases, they would make 'generic' determinations establishing the local housing allowance rates for different sized properties within the geographic areas they had identified.

138.     Clause 29 provides for powers that are more specifically appropriate for the local housing allowance approach to the determination of a claimant's maximum housing benefit. This would facilitate the roll out of the local housing allowance nationally across the private rented sector.

139.     Subsection (1) of clause 29 removes section 130(4) of the Social Security Contributions and Benefits Act 1992, which requires regulations to be made setting out how a claimant's Appropriate Maximum Housing Benefit should be determined in any case. This provision will be replaced by the new 130A (2). Subsection (2) of clause 29 introduces a new section, 130A, into the Social Security Contributions and Benefits Act 1992.

140.     The new section 130A (1) provides that a claimant's Appropriate Maximum Housing Benefit must be determined in accordance with this section.

141.     Subsections (2) and (3) enable regulations to provide that claimants may have their Appropriate Maximum Housing Benefit calculated by reference to rent officer determinations. These could be property specific determinations as now, or the generic determinations required under the local housing allowance, which apply to properties of a certain size in a particular area.

142.     Subsection (4) would enable regulations to be made requiring local authorities to refer certain cases to rent officers for property specific determinations. This will be necessary for cases that are exempt from the local housing allowance.

143.     Subsection (5) introduces an additional "treat as liable" power solely for the purpose of calculating the Appropriate Maximum Housing Benefit. This provides a more specifically appropriate power centred on the local housing allowance approach, providing for a claimant's housing benefit to exceed their rent liability if the appropriate local housing allowance is higher than their actual rent liability. Equivalent provision is made by subsection (6) for claimants who are 'treated' as having a rent liability under regulations made under section 137(2) (j) (e.g. because it is their partner who has the actual liability). This provides for their housing benefit to exceed their deemed liability, if the appropriate local housing allowance is higher than their deemed liability.

144.     Subsection (3) of clause 29 provides for a power to prescribe when local authorities must review a Housing Benefit award. Under the Local Housing Allowance, this allows for the local authority to apply a new Local Housing Allowance rate each year to ensure that a claimant's award is updated.

Clause 30: Loss of housing benefit following eviction for anti-social behaviour, etc

145.     Subsection (1) of clause 30 would insert sections 130B to 130G in the Social Security Contributions and Benefits Act 1992. Section 130B would provide for the reduction, or non-payment, of housing benefit where certain conditions are met. The first condition is that a relevant order for possession of the claimant's (to be known as the "former occupier") home has been made by a court on grounds relating to anti-social or criminal behaviour. The relevant orders are set out in section 130C. The second condition is that he has ceased to live in that home as a result of that order.

146.     The third condition will operate slightly differently depending on the territory concerned. In England and Wales, the third condition is that the claimant has failed to comply, without good cause, with a warning notice issued to him by a local authority with a view to improving his behaviour (section 130B(2)). In Scotland, the third condition is that the claimant has failed to comply with a requirement by a local authority to take specified action, without good cause, having been warned that such a failure would affect the amount of Housing Benefit payable to him (section 130B(3)) and the authority has recommended that the claimant's benefit be so affected. The final condition is that the claimant satisfies the conditions for entitlement to Housing Benefit.

147.     It is intended that once a person has satisfied the first two conditions, the relevant local authority will make an attempt to engage with him, if it has not already, with the aim of ending, or preventing repetition of, his anti-social behaviour through the provision of rehabilitation. Where the person refuses to co-operate, the local authority will have the option of using this sanction to encourage him to co-operate with the rehabilitation.

148.     Section 130B (4) would provide a power to prescribe the rate of benefit reduction and the circumstances in which it is payable. The intention is to reduce Housing Benefit by 10% for the first 4 weeks, followed by 20% for a further 4 weeks and then 100% until either the local authority considers that the sanction should no longer apply (section 130B(6)), or a period of 5 years, beginning with the making of the possession order, has elapsed (section 130B(8)). Examples of circumstances where the local authority might consider the sanction is no longer appropriate are where the person has begun co-operating with rehabilitation, where rehabilitation services are no longer available or where the person has, or his family have, become particularly vulnerable. It is intended that a lower rate of reduction will apply to those considered to be in hardship. This could include households where someone is seriously ill or pregnant and households with children or which include those with caring responsibilities.

149.     The sanction, having been brought to an end by a local authority can be restarted if the person fails to comply with a further warning notice or, in Scotland, fails to comply with a further requirement and the authority recommends it should apply. So, if the person stops co-operating with rehabilitation, a further warning can be issued or further action specified. If this is not complied with, without good cause, the sanction will start to run again (sections 130B(6) and (7)).

150.     Only one sanction can be applied in relation to a relevant order for possession, albeit the sanction can stop and start up to the date 5 years after the original possession order was made (section 130B(9)).

151.     Section 130B(10) would define a local authority for the purpose of this clause by reference to existing legislation.

152.     Section 130C would set out the relevant orders for possession. All the orders for possession specified in subsections (1) and (2) are made on grounds of behaviour causing a nuisance or annoyance to neighbours or criminal behaviour. It does not matter if the possession is made purely on those grounds or on those grounds coupled with other grounds (section 130C(3)).

153.     The relevant orders for possession specified can be stayed, suspended, or (in Scotland) sisted, with conditions attached. Those conditions may relate to behaviour and the payment of rent and rent arrears. If a relevant possession order is made and stayed, suspended or sisted with behaviour conditions, the sanction can only be applied if the order takes effect as a result of the breach of those behaviour conditions (section 130C(4), (5) and (6)).

154.     Section 130D(1) would provide a power to prescribe circumstances in which benefit not paid due to the application sanction can be paid to the claimant. An example of such circumstances would be where a claimant has made a successful application for the relevant order for possession to be set aside.

155.     Section 130D(2) would provide a power to vary the definition of relevant orders for possession.

156.     Section 130D(3) would provide a power to prescribe the matters which should be taken into account when deciding whether or not a person has good cause, and circumstances in which a person is, or is not, to be regarded as having good cause, for not complying with a warning notice or a requirement of a Scottish local authority.

157.     Section 130E would make provision for cases where the claimant is a member of a couple. Subsection (2) would provide that where both members of a couple lived in a dwelling to which a relevant order for possession relates and leave the dwelling as a result, housing benefit could be subject to a future sanction should either member of that couple fail to comply with a warning notice or in Scotland take specified action. If only one member of the couple resided in a dwelling to which a relevant order for possession relates the sanction is not to apply (section 130E (3)).

158.     Section 130F would make provision for the necessary information sharing. New information sharing powers are necessary to provide for relevant information regarding relevant orders for possession to be given to the Secretary of State by the courts or others who may be aware of such an order (in England and Wales); for the Secretary of State to provide relevant information relating to relevant orders for possession or housing benefit to local authorities providing services related to rehabilitation; for authorities providing rehabilitation services to give relevant information to the Secretary of State for purposes relating to the administration of housing benefit; and for the sharing of relevant information within and between authorities administering housing benefit or providing rehabilitation services.

159.     Section 130F(1) would allow the Secretary of State, through regulations, to require courts to notify him when a relevant order for possession is made and provide relevant details of it. Section 130F(1) would also enable the Secretary of State, through regulations, to require similar information to that required from a court from others who may be aware of the making of a relevant order for possession. Such people could include for instance the landlord or local authority. The intention is to place the obligation on the courts in the first instance. This subsection would not apply to Scotland.

160.     Section 130F(2) would enable the Secretary of State to provide information obtained under section 130F(1) to a relevant local authority providing rehabilitation services, or to a person authorised by the authority to provide those services. It would also allow the Secretary of State to provide information he holds relating to housing benefit to those authorities or service providers.

161.     Section 130F(3) would provide for the Secretary of State to require, through regulations, relevant information for purposes relating to the administration of housing benefit to be provided by a relevant authority providing rehabilitation services or a person authorised by the authority to provide those services to him. Information could include whether a person has satisfied some or all of the conditions of sections 130B (1), (2) and (3).

162.     Section 130F(4) would allow the Secretary of State to require, through regulations, that relevant information may be shared within and between authorities administering housing benefit and those providing rehabilitation services for purposes relating to the administration of housing benefit.

163.     Section 130F(5) would allow the Secretary of State to require, through regulations, that relevant information be shared within and between authorities administering housing benefit and those providing rehabilitation services for purposes relating to the provision of rehabilitation services. This subsection would not apply in Scotland, where existing legislation already allows such information sharing.

164.     Section 130F(6) would define relevant information. The manner in which relevant information is to be supplied may be prescribed by the Secretary of State (section 130F (7)).

165.     The intention is to pilot the use of a sanction in about 10 authorities in England for a period of 2 years. Section 130G would provide the necessary piloting powers. It would not extend to Scotland.

166.     Subsection (2) of Clause 30 would provide that any regulations made under subsection 130B(4), relating to the rate of the benefit reduction, and regulations made under subsection 130D(2), relating to varying what constitutes a relevant order for possession, must be approved by both Houses of Parliament.

Clause 31: Housing and Council Tax Benefit for persons taking up employment; Clause 32: supplemental and; Clause 33 interpretation

167.     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:

(i) for people going off either income support or income-based jobseeker's allowance; and

(ii) for people leaving either incapacity benefit or severe disablement allowance.

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.

168.     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:

-     claimant or partner must have been entitled to and in receipt of the relevant qualifying benefit(s) for 26 weeks immediately before taking up work or increasing hours / wages of current employment; and

-     claimant or partner must be entitled to housing benefit or council tax benefit in the week before employment commenced.

169.     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.

170.     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.

171.     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.

172.     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).

173.     Clause 31 is designed to recast the underpinning powers for extended payments.

174.     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.

175.     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.

176.     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).

177.     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.

178.     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.

179.     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.

180.     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.

181.     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.

182.     Subsection (13) enables the Secretary of State to make special provision in regulations for a person who was not entitled to housing benefit or council tax benefit when they stopped being entitled to any of the qualifying benefits, but had been so entitled until a week before they took up employment. This may happen, for example, because a person moved out of their current home to start work in another local authority area (and as a result ceased to be entitled to housing benefit and/or council tax benefit) in the week they took up employment or in the preceding week. Without this provision the subsequent ending of the qualifying benefit for work-related reasons - one of the basic conditions of entitlement for an extended payment - would have no effect, as the housing benefit claim would have already been closed.

183.     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 31 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.

184.     Clause 32 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.

185.     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.

186.     Subsection (8) provides that payments under Clause 31 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 31.

187.     Clause 33 provides specific details on the interpretation of terms used in Clauses 31 and 32, thereby clarifying specific terms and ensuring consistency with established legislation.

Clause 34: Information relating to housing benefit

188.     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.

189.      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.

190.     Clause 34 provides for new subsections (2A) - (2C) to be inserted 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.

191.     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.

192.     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).

Clause 35: Supply of information by rent officers

193.     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. Subsection (1) of the new section 122F enables the Secretary of State to require rent officers to provide housing benefit information to him or someone providing services to him. Subsection (2) enables him to make directions which may impose requirements about the supply of such information and the form and manner in which it is to be provided.

194.     This information would be used for social security purposes, along with the other purposes listed in 122F(1)(b)-(e). For example:

-     To monitor determinations made for the housing benefit cases that are referred to rent officers;

-     Carry out policy analysis - for example on the impact of any future changes to the way the local housing allowance is set; and

-     Use the information for benefit expenditure forecasts.

Clause 36: Payment of housing benefit

195.     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.

196.     Clause 36 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.

Clause 37: Duty to send inspection reports to the Secretary of State and; Clause 38: Directions by Secretary of State

197.     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.

198.     Clauses 37 & 38 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.

199.     Clause 38 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.

200.     In addition, clause 38 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.

201.     Subsections (1) and (2) of clause 37 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.

202.     Clause 38 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.

203.     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.

204.     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.

205.     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.

206.     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.

207.     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.

208.     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.

209.     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.

210.     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.

PART 3: Social Security Administration: General