How do I deal with benefit cap on single parent with 4 kids?

Without getting too deep into the politics and morality of it all, how on earth does the Government expect people to get a job when even a full-time wage where I live, doing the sort of work a tenant is likely to get is around £15-18k max?

It's just not fair on those people that do not claim benefits and have a salary of say £20k/yr when the scrounging counterparts have a greater take-home pay.

Reply to the comment left by "tony tony" at "19/01/2017 - 15:52":

Hi Tony

Playing ball with the benefits system is a no win situation
Playing ball with a non paying tenant is likewise.

Get her out as soo as you can, don't wait.

Reply to the comment left by "Mick Roberts" at "20/01/2017 - 07:23":

Hi Mick

Thanks for your faith in my opinion!!! However, it is only my opinion, (albeit based on experience), and everyone should seek their own professional advice.

Universal Credit is a nightmare to deal with, it is far far worse than Housing Benefit and that was bad enough. More and more tenants are being transferred to Universal Credit and will receive their housing element monthly (and no doubt spend it instead of paying the rent). I mention Universal Credit because it is closely linked to the Benefit Cap.

The Benefit Cap is actually a Housing Benefit reduction, it does not usually affect the tenant's other benefits, only the Housing Benefit (or Housing Element of Universal Credit). Therefore, the tenant tends to carry on spending the same amount as previously, and expects the landlord to accept the reduced (capped) amount for housing. They generally do not realise, or do not accept, that they have to now use their Jobseekers Allowance, Employment Support Allowance, Income Support, or Child Benefit, to pay their rent.

I have commented on here several times about the new reduced Benefit Cap, and have reproduced (or linked to) a chart showing the reduced Housing Benefit entitlements for the different sized households.

Some households will be exempt from the Benefit Cap, e.g. those in receipt of Disability Living Allowance / Personal Independence Payments, Carers Allowance, or in the "Support Group" of Employment Support Allowance. Also, households that are in gainful employment (above the minimum hours), are also exempt from the Benefit Cap, and this does include people who are self-employed.

Landlords can help to protect their tenants from the HB reduction (due to the Benefit Cap), and thus also protect themselves from rent arrears, by ensuring that their tenants (or people in the tenant's household) are claiming any disability benefits they may be entitled to, or Carers Allowance (if they are caring for someone who gets disability benefits). Landlords could also discuss with their tenants the possibility of employment and/or self employment (hours spent on either/both can be added together to give the total working hours). Many tenants will not feel confident about being able to get a job, e.g. they may be no good at interviews, or may not have the right skills, or may have childcare responsibilities that limit their available hours, however, this does not prevent them from self employment. Self-employment offers a legitimate and ethical way of becoming exempt from the Benefit Cap, and thus retaining their entitlement to Housing Benefit (subject to the normal tapered reductions if they have excess earnings). There are lots of possible commission only self-employment options, many of which can be done by (just about) anyone who is willing to put in the time and effort (contact me for further details, and contacts), but also these can be combined with work that is specific to the skills and interests of the tenant, e.g. gardening, DIY/handyman, crafting, woodwork, cleaning, etc, etc.

If the tenant (or someone in their household) is not exempt from the Benefit Cap (and cannot become so because they are not entitled to the correct benefits, and/or will not get a job or become self employed), then you are left with the option of Discretionary Housing Payments (DHP). This is a payment the Council can choose to pay to a tenant who is facing particular hardship, BUT it is discretionary, it is for a limited time, and it is a limited pot of money so when it's gone it's gone! - In other words, don't rely on getting this.

Of course, if you serve your tenants with Notice (s21 or s8) and they take this to the Council's homelessness department, the homelessness department may ask the Housing Benefit Dept to give the tenant DHP. Homelessness departments also have "homelessness prevention" funds, which can be used to pay off rent arrears, but they are only likely to do this if the tenancy is then sustainable long-term.

Perhaps an option for some tenants, but cannot be recommended by landlords for fear of "contrivance", would be to split the household so that there are less children, e.g. two kids live with mum, two live with dad, but this would only work in a few circumstances. If the household has adult children, then they could also move out so as to reduce the overall benefit for the household (and thus not be caught by the Benefit Cap). - These options are absurd as they are possible solutions for some families facing eviction due to reduced entitlement to HB, but they add to the overall demand for housing and also add to the overall cost to the Council/Government/Taxpayers. However, if it is a case of a whole family being evicted, or part of a family simply moving elsewhere, then the obvious choice is for the family to split into two households.

It would also be possible for the tenant family to make a homelessness application to the Council on the basis that they should be considered to be "homeless" as it is unreasonable for them to continue to occupy accommodation which is unaffordable to such an extent that if they were to pay the rent then it would deprive them of the necessities of life (food, warmth, clothing, etc). There is caselaw on this to support this position (if anyone needs this then please contact me). If this was successfully argued then the Council would be legally obliged to provide the family with alternative accommodation, in which case the tenants would be re-housed and the landlord would have his/her property back to re-let to a household that can afford the rent.

In relation to landlord letting strategies going in to the future, there are alternative letting strategies which could reduce the Benefit Cap risks to landlords, but changing letting strategies is a whole different topic...............!

Reply to the comment left by "Mick Roberts" at "20/01/2017 - 07:23":

Thanks for that mick some good tips there

Reply to the comment left by "Robert Mellors" at "20/01/2017 - 17:29":

Thanks Robert some more good tips

Reply to the comment left by "Robert Mellors" at "20/01/2017 - 17:29":

Thanks Robert some more good tips

Apparently Channel 4 are interested in interviewing people who have commented on this discussion thread.

If you would like me to put them in touch with you please email your contact details to me - mark@property118.com
.

Non PC comment of course!

Who actually pays for all of this when the only tax rate falling is Corporation Tax!

Ultimately it's another stealth tax on landlords if you ask me!

Section 24 anyone?

It does sound a lot, what some of these DSS tenants get, but when u add their money up, it's just enough to buy Council Tax top up, food, gas, elec, tv license, water, kids stuff etc.
It sounds more when more kids, but then more outgoings.
And the working person does get more if the working person also has kids.

On Universal Credit, I'm actually paying a firm now to do my UC claims & this is coming out my own pocket because I am no Letting Agent, these are my own houses. This UC admin has gone back 20 years like Housing Benefit used to be. What is it now, something like 86% of UC tenants are in arrears?
That's all Taxpayers money that the tenant has had FREE & not spent it on the rent. Why isn't someone taking this up with the Govt?

A thought for the Government here: This benefit cap. If they lowered the tenants benefit direct from them and not the Landlords Housing Benefit. At least then the tenant wouldn't be homeless, because they wouldn't have to physically hand over the money.

And they'd have to learn they're getting less money.

Council tax TV licence water etc get paid direct. Why not the important house?

Reply to the comment left by "Mick Roberts" at "21/01/2017 - 09:40":

I think the 86% figure was for ALMOs but I imagine it's similar in the PRS. I certainly can't envy anyone trying to let to a UC claimant, and I doubt the extra cuts coming in April are going to improve things.