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    Prioritising engagement to get ahead of the Universal Credit challenge

    Big changes are coming for many working-age households who receive Housing Benefit, Tax Credits, Income Support and Jobseeker's Allowance. By September 2024, tenants and residents who still claim this legacy benefit will be given a notice to make the switch over to Universal Credit as part of a mass ‘managed migration’. Of course, the use of Universal Credit to help tenants pay rent isn’t anything new. Soon, though, it will be the only method available for those claiming rent support as the Department of Work and Pensions carry out a ‘sweep’ to migrate any working-age customer from their legacy benefit claims if they haven't done so naturally or voluntarily. (Note: Those who are residing in Temporary / Supported Exempt accommodation, will still claim / remain on Housing Benefit for their housing cost entitlement, but may still claim Universal Credit / be Migrated to Universal Credit for the other elements of their entitlement)

    Tenants will have three months to switch to Universal Credit from the day they receive a managed migration notice. Failure to do so by the end of the given time period will result in the termination of their legacy benefits as well as no benefit being granted.

    So, how can you identify which of your households have been served a managed migration notice? This information isn’t readily available, meaning the onus is on you to find out who in your communities has received them and offer support to those who need it. Proactive tenant engagement is essential here if you are to provide early migration assistance, protect your tenants’ income, protect your income, prevent arrears escalations, and ultimately keep tenants in their homes. 

    Expert insights from our Implementation Specialist

    If you haven’t already, meet Carly Harling! Carly may be a relatively new face at Voicescape, but with 16 years of local authority experience under her belt she’s no stranger to Income Management and Universal Credit – in fact, she has been directly involved with the system since its inception. She plays an active role in both a trustee capacity for Citizens Advice and helping housing associations and their tenants navigate challenges with the right solutions. 

    There’s nothing Carly doesn’t know about the current Universal Credit challenge, so we set up a quick Q&A to get her expert guidance. Here are the key considerations and proactive steps you can take to get ahead of the changes and get in front of those who need it most… 

    What are some of the key challenges that tenants may need support with when switching to Universal Credit?

    Unlike the legacy benefit system with various payment frequencies, Universal Credit is paid monthly in arrears. This will then require a manual rent payment to the landlord – a previously direct-to-landlord process with the legacy benefit system. This will be unfamiliar ground to many migrating, as well as the many differences to entitlement – such as the Benefit Cap, Self-Employed and Capital Limits, and the 53-week rent year for those on a weekly rent debit in 2024/2025.

    Whilst manually calculating means up to 55% of claimants may be better off and the taper rate for employment is 63% instead of 65%, claimants may find their recovery rates for historical debts, fines, loads, and overpayments deducted from their entitlement at up to 25%. Contextually (not including rent), for an average couple with a standard allowance of £617.60 per month, this is a deduction of up to £154.40. This leaves £463.20 for one month to live on and pay for other core bills, food and living expenses such as inflated utility charges. Claimants may need additional support to navigate these deductions.

    Will tenants receive transitional protection?

    Those who have completed a ‘natural’ or ‘voluntary’ migration – that is, switched to Universal Credit independently without being served a notice – will not receive protection. It is really important that they receive specific benefit advice, and any historic debts within the debt centre are considered before doing so. For ‘managed’ migration, however, tenants will get monthly transition payments to cover any financial shortfall – but this is eroding, not permanent, and does not cover the debt centre deductions of up to 25%.

    Do landlords need to be proactive, and how can they get ahead?

    I cannot stress enough how essential proactivity is on this matter – from both a collections and wellbeing perspective. Information on which or how many of your households have been served managed migration notices is up to you to find out. I therefore recommend focusing on the following areas:

    • Identify residents of working age and residents receiving Housing Benefit.
    • Identify working-age claimants not on Housing Benefit and Universal Credit for your potential tax credit cohort.
    • Engage with your working-age cohort to ascertain support requirements.
    • Signpost residents to community resources for Universal Credit advice and support to spread some of the advice burden, such as Citizens Advice Help to Claim. These can help up to receiving the first payment and can support with the debt centre for deductions too.
    • Reach out with advice and support around how residents should deal with Universal Credit underpayments expected from the 53-week rent year.
    • Adopt solutions that facilitate the above with efficient and effective communication. 
    • Recognise the change in the way calculations for Universal Credit differ from Tax Credits. Despite not being part of the Tax Credit calculation, the Housing Costs will form part of the Universal Credit claim for those migrating – as will deductions. 

    Proactivity like this will enable you to better determine who is affected by a managed migration deadline. From there, you can identify who might be vulnerable and need extra support – whether that’s through effective budgeting, debt support, help to claim, or requesting that money goes directly to you as a landlord to protect tenancies.

    How Voicescape can help you engage

    Navigating this mass managed migration doesn’t have to be a struggle. Using Voicescape Engage, social landlords are taking away the manual burden of outbound calling, prompting tenants to get in touch and making it quicker and easier to identify those in need of support. Learn more here...

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