Moving into work: briging housing costs
A hard copy of this report summary can be obtained by contacting Paul Noakes [E-Mail: Paul.Noakes@dwp.gsi.gov.uk] or by writing to him at the 'Social Research Division, Department for Work and Pensions, 4th Floor, Adelphi, 1-11 John Adam Street, London WC2N 6HT'.
Research Report No. 79
By Bruce Stafford, Claire Heaver, Nicola Croden, Anne Abel Smith, Susan Maguire and Jill Vincent
This report examines the implementation and operation of the Housing Benefit/Council Tax Extended Payments and Fast-track Incentive Schemes. and their impacts on claimants. These schemes were designed as work incentives to ease the movement into employment: claimants' Housing Benefit and Council Tax Benefit are paid for the first four weeks following a return to work (Extended Payments), and the subsequent payment of any in-work claim for these benefits is 'seamless' (the Fast-track Incentive Scheme). The research, by the Centre for Research in Social Policy at Loughbourgh University, was commissioned by the Department of Social Security. Fieldwork, conducted in 1997, involved group discussions and depth interviews with staff from local authorities, the Benefit Agency and the Employment Service, and depth interviews with welfare rights officers, claimants of Extended Payments and eligible non-claimants. The main findings are:
- The Extended Payments Scheme was considered by both claimants and staff to facilitate the transition from out-of-work benefits to work. It acted as a financial buffer without which some claimants said they would have had to reconsider their decision to return to work, or would have ended in rent arrears.
- However, the scheme did not influence claimants' decisions or behaviour “prior to” accepting a job or increasing their working hours.
- Local authorities did not report any difficulties in processing fast-tracked claims within the target limits.
- The implementation and ongoing operation of the Extended Payments Scheme were hampered by a lack of publicity, and the staff training in the agencies which did not sufficiently raise staff awareness and knowledge. There was relatively little liaison between local authorities, the Employment Services (ES) and the Benefits Agency (BA), with little shared ownership of the scheme.
- Never the less, respondents tended to have a straightforward transition from out-of-work benefits through Extended Payments to In-work benefits.
1 Introduction
The transition from receipt of out-of-work benefits to unemployment can be problematic for some people. Worries about paying rent and council tax are likely to act as a barrier to taking jobs (Bottomley, et al, 1996 and Shaw, et al, 1996b). The Extended Payments and Fast-track Incentive Schemes, whereby claimants' Housing Benefit and Council Tax Benefit are paid for a further four weeks and the subsequent payment of any in-work claim for these benefits is 'seamless', were designed as work incentives to ease the movement into work.
The operation of the Extended Payments Scheme involves local Benefits Agency offices, Employment Services Job centres and local authorities.
The Department of Social Security commissioned the Centre for Research in Social Policy to undertake a qualitative evaluation of the Housing Benefit/Council Tax Benefit Extended Payments and Fast-track Incentive Schemes. The objectives of the research were: to examine the implementation and operation of the schemes; and to explore the impact of the Extended Payments Scheme on claimants.
There were four main strands to the research, which was carried out between mid-February and July 1997:
- in three case study districts, 37 in-depth face-to- face interviews with staff from the Benefits Agency, Employment Service and local authorities and five telephone interviews with welfare rights officers;
- 83 telephone interviews with Benefits Agency, Employment Service and local authority staff from nine other districts;
- four group discussions held with staff from the Benefits Agency, Employment Service and local authorities; and
- 27 in-depth face-to-face interviews with claimanst and 13 interviews with people who were eligible for Extended Payments but who did not make a claim
2 Implementation issues
The Extended Payments and Fast-track Incentive Schemes became operational on 1 April 1996. Staff respondents identified five main issues arising from the implemation of these schemes:
- implentation was hindered by other policy and adminstrative changes, for example, the introduction of Jobseeker's Allowance and local government reorganisation in Scotland, having a relatively higher priority;
- the level of publicity given to the schemes was perceived as insufficient in both absolute and relative terms with publicity for Extended Paymnts, in particular, seen as being lost amongst the “'noise'” of the promotion of other schemes and initiatives;
- the type of training received, especially by staff in the Benefits Agency and Employment Service, did not sufficiently raise staff awareness and knowledge of the scheme. As a consequence, the initial delivery of the Extended Payments Scheme to claimants was not as envisaged. For example, claimants might have been informed of the scheme afer the the eight day deadline for submitting the application form, and Benefits Agency and Employment Service staff might not date stamp claim forms before passing them to the relevant local authority;
- service delivery was further undermined in some districts by an initial shortage of application forms and, in a few districts, by problems with processing claims on local authorities' computer systems; and
- the degree of inter-organisation liaison. In six of the 12 districts there was some form of liaison (typically between the local authority and the local office of the Benefits Agency) about the launch of Extended Payments. There appears to have been no liaison over the Fast-track Incentive Scheme, probably because Benefit Agency and Employment Service staff are not directly involved in processing fast-tracked in-work Housing Benefit/Council Tax Benefit claims.
3 Service delivery issues
There were a number of common themes and issues which emerged from the ongoing delivery of the two themes. First, there was the belief that the Extended Payments Scheme was not adequately publicised and promoted. Secondly, that training in the Agencies had not sufficiently equipped staff to promote the Extended Payments Scheme, or to ensure that procedures for correctly processing applications were followed. Thirdly, and related to the two previous points, the Extended Payments was “'one of many'” schemes and its take-up was diminshed because it was not distinctive enough to be noticed by either staff or claimants. Fourthly, staff perceived the 'eight day rule' for the submission of Extended Payments application form (NHB 1EP) to be unfair because there was no appeal allowed on ground of 'good cause'. Finally, there was relatively little liaison between the three organisations with respect to the administration of Extended Payments. Indeed, there was effectively no shared ownership or responsibility at local level for the Extended Payments Scheme.
Generally, local authority staff did not report any difficulties with processing fast-tracked claims. However this might be because of the low volume of cases they had to process. In a few local authorities respondents reported making interim benefit awards in order to ensure that the claims were processed within the set time limits.
Staff suggested that operation of the Extended Payments scheme would be improved by better publicity and advertising and increased staff awareness of the scheme.
4 Staff and welfare rights officers' awareness and knowledge of the schemes
Staff and welfare rights' officers had varying levels of awareness and knowledge of the two schemes.
Benefits Agency and Employment Service staff are not directly involved in processing fast-tracked in-work Housing Benefit/Council Tax Benefit claims and consequently they tended to be unaware of the existence of the fast-track Incentive Scheme. Local authority respondents knew the scheme's eligibility criteria and could accurately describe the in-work benefit claims process.
Similarly, local authority respondents had the best understanding of the Extended Payments Scheme. Within all three organisations, front-line staff had a better knowledge of the scheme than their managers. Neverless, staff could get details of the Extended Payments Scheme wrong.
Welfare rights' officers were similar to the agencies' and local authorities' staff respondents in their understanding of the two schemes. They knew some of the features of the Extended Payments Scheme, but had to check details in a guide or manual. Only one of the advisors was aware of the Fast-track Incentives Scheme.
5 The Schemes as Work Incentives
Generally staff respondents saw Extended Payments as a 'work incentive'. By this they meant that Extended Payments facilitated or assisted the movement into work. It helped recipients to budget and plan for the future, and it was a financial “'buffer'”. However, the scheme was not perceived as affecting most potential claimants behaviour and decisions about work prior to their decision to return to work. Typically, the scheme was seen as a financial “'bonus'” for claimants. This view coincides with claimants' own claimants' own perceptions of the value of the scheme.
Staff respondents believed that the design of the Extended Payments Scheme could be improved by: more flexible eligibility criteria (especially by amending the eight day time limite), simplifying the claims process (including making the payment automatic); widening the scope of the scheme to other claimant groups; changing the nature of the payment (for instance, making it for a longer period of time); and means-testing the extended payment.
6 Returning to work
Fifteen of the 40 claimants and eligible non-claimants knew of Extended Payments prior to their decision to start a new job or increase their hours of work. A further 13 were informed about Extended Payments when they notified the Benefits Agency or Employment Service that they were coming off out-of-work- benefit and moving into work. Yet their knowledge of the eligibility rules was poor, for example, whilst some respondents were aware that there was a time limit for submitting claims, few knew that the deadline was eight days.
Whilst most of the claimants and eligible non-claimants in this study knew something about in-work benefits in general, only one knew that in-work Housing Benefit and Council Tax Benefit claims could be fast-tracked.
People living with partners tended to discuss jointly the decision to return to work. Other respondents took the decision on their own.
Twenty seven of the 40 respondents carried out some form of financial 'better-off' calculation before before they or their partners moved into work. Those not doing a better-off calculation were either determined to obtain employment regardless of the financial consequences, or had been offered employment where the wage was considerably more than the amount received from out-of-work benefits.
Three main types of calculation were performed:
- formal - a detailed assessment of income (including in-work benefits) and expenditure;
- informal - a general comparison of out-of-work benefits and anticipated income; and
- better-off calculations done on the respondent's behalf by the Benefits Agency or Employment Service.
Claimants who made a successful claim for Extended Payments tended to have either conducted a formal calculation or had an Agency-based calculation on their behalf.
The claimants and eligible non-claimant respondents gave one, or more, of the following reasons for returning to work:
- a perceived influence/pressure from the Benefits Agency or Employment Service;
- financial considerations/desire for a higher standard of living;
- changes in domestic circumstances; and
- the social benefits to be derived from working.
Overall, the availability of Extended Payments did not trigger any of the respondents to return to employment. Only three respondents who knew about the scheme before they had taken the decision to accept a job or increase their hours of work said that the scheme influenced their decision. The scheme did, however, assist and facilitate claimants' movement into work. Claimants praised the scheme, they saw it as a “'bonus'” which allowed households to plan and budget, and it helped to reduce any financial stress.
7 The Claimants' experiences of claiming
There were 21 respondents in the study whose claim for Extended Payments was successful. In most cases the process of claiming was straightforward and sufficiently quick for people to have had continuity in the payment of their rent and council tax.
There were six unsuccessful claimants for Extended Payments. Four were turned down because they were too late in claiming (that is, longer than eight days), including one whose form was reportedly lost in the post. Two individuals were rejected because they had not been continuously in receipt of Income Support or Jobseeker's Allowance for at least 26 weeks. (One of these was also a homeowner and so not eligible for Housing Benefit.)
Most of the 13 respondents who were eligible non-claimants did not claim because they were unaware that they could.
It is possible that up to nine respondents were eligible for a fast-tracked in-work Housing Benefit/Council Tax Benefit claim. One of these respondents knew that their claim had been fast-tracked.
A majority of the respondents who claimed in-work Housing Benefit/Council Tax Benefit experienced a straightforward transition from out-of-work benefits through Extended Payments to in-work benefits. A few respondents, however, did incur rent arrears.
8 Conclusions
There is a relatively high degree of congruence between staff, claimant and eligible non-claimant accounts of the Extended Payments and fast-track Incentive Schemes.
Respondents generally saw Extended payments as a work incentive, because it provided a financial bridge between leaving out-of-work benefits and the receipt of the first payslip. To the extent that the scheme was seen by staff, claimant and eligible non-claimant respondents as aiding the transition into work, then it can be considered to have been a success.
However, Extended payments had little or no bearing on decisions made, or on behaviour, before the claimants had arranged job interviews or accepted offers of employment. This is mainly because claimants generally recall only being informed of the scheme for the first time when they signed-off. Although this is a qualitative study, it suggests that the dead-weight costs of the schemes are relatively high.
The research also shows that there is a need for more co-ordination of the scheme at local level in order to secure increased publicity for, and staff training on, Extended Payments.
There is little evidence from this study that the Fast-track Incentive Scheme was effective at incentivising local authorities. This is mainly because some local authorities appear to be able to process fast-tracked claims easily within the target time limits.
9 Relevant DSS research publications
Shaw, A., Walker, R., Ashworth, K., Jenkins, S, and Middleton, S. (1996) “ Moving off Income Support: Barriers and Bridges” (DSS Research report No. 53). London: HMSO
Shaw, A., Kellard, K. and Walker, R. (1996)“ Barriers, Bridges and Behaviour: Learning from Income Support Receipents” (DSS In-house Research Report No. 18). London. DSS.
Bottomley, D., McKay. S. and Walker, R. (1997) “Unemployment and Jobseeking: A national Survey in 1995” (DSS Research Report No. 62). London. TSO
McKay, S., Walker, R. and Youngs, R. (1997) “Unemployment and Jobeseekeing Befire Jobseeker's Allowance”(DSS Research Report No. 73). London. TSO