Housing Benefit and supported accommodation
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. 93
By Andreas Cebulla et al.
Supported accommodation schemes provide services to tenants, which are not normally available in the mainstream housing sector, such as meals or counselling. Tenants include older people, the homeless, or women escaping domestic violence, who often receive Housing Benefit. Housing Benefit may be used to fund property-related costs of accommodation schemes and some services that relate to the schemes’ maintenance and to administering basic ‘good neighbourly’ tasks. Because these tasks are difficult to identify and to cost, ineligible services have also been funded.
The report presents estimates of the number of Housing Benefit claimants in Britain who were in supported accommodation in 1996/97 and of the amount of Housing Benefit spent on support services considered ineligible for Housing Benefit at that time. The research was commissioned by the Department of Social Security, which was heading a Inter-departmental Working Group investigating the funding of supported accommodation. It was carried out by the Social Security Unit at the Centre for Research in Social Policy, Loughborough University.
- Housing Benefit staff varied markedly in their knowledge of supported accommodation schemes in their area and probably underestimated the number of benefit claimants in supported accommodation.
- On the basis of information provided by a sample of local authorities, there were some 123,500 Housing Benefit claimants in supported accommodation in Britain in 1996/7. An adjusted estimate, derived from official housing statistics, set the figure at 447,000. The difference was most likely due to under-counting of claimants in sheltered accommodation.
- Some of the Housing Benefit paid to between 70,000 and 300,000 claimants was found to be meeting the cost of support services not eligible for benefit. Five to 10 per cent of Housing Benefit claims from people in supported accommodation were judged to be wholly soundly based. A further 12 to 14 per cent were accurate to within £3 per week.
- On the basis of the lower estimate which draws purely on survey data, between £120m and £160m of Housing Benefit was paid out in 1996/7 to cover service charges that were not in fact eligible for support through Housing Benefit. Using the higher population estimate, these figures increase to between £360m and £480m.
- In some cases, Housing Benefit was not meeting the charges for eligible support services in full. On the basis of the survey data for 1996/7, additional Housing Benefit of between £85m and £115m could have been paid towards these services. Using the higher population estimate, these figures increase to between £155m and £245m.
- Most supported accommodation was available equally to men and women, although 27 per cent and 15 per cent of schemes catered solely for men and women respectively. Although age restrictions were the exception, about a quarter of schemes were for residents who were aged 60 or over. Only about four per cent of schemes described the age range of their residents as exclusively 20 years of age or younger.
Introduction
Supported accommodation offers services to tenants with special needs that are not normally provided in the mainstream rented sector. A wide range of accommodation with associated support is included in the term ‘supported accommodation’. It includes sheltered accommodation provided principally for elderly people, hostel and other shared accommodation for people needing 24-hour staffed accommodation, accommodation where people need only occasional social support and assistance. A wide variety of people with special needs are catered for in such accommodation, in particular people with mental health difficulties or learning difficulties and people who are vulnerable as a result of their age or circumstances. In August 1997, the Department of Social Security introduced new interim regulations covering funding of services in supported accommodation through Housing Benefit. The interim regulations were designed to protect the supported accommodation sector pending the outcome of a long-term review of the funding of supported accommodation. It allowed Housing Benefit to continue to pay for reasonable charges for general counselling and support for existing accommodation.
Policy background
The consultation document “Supporting People: A New Policy and Funding Framework for Support Services” was published on 10th December 1998. The paper proposed pooling funding streams for support services into a single budget from April 2003. This would be distributed to local authorities to be applied at the local level. To pave the way to “Supporting People”, the Government proposed a new, time-limited transitional Housing Benefit scheme from November 1999. This would have wider coverage than existing regulations. The Government announced on 31st March its decision to proceed with implementing “Supporting People” from April 2003. It also announced its decision to delay implementing the transitional Housing Benefit scheme until April 2000.
In October 1996, the Department of Social Security commissioned this study to establish the number of Housing Benefit claimants in supported accommodation and the amount of Housing Benefit that was paid for ineligible services.
Study method
The estimates were based on an analysis of the service charges paid by a random sample of Housing Benefit claimants in supported accommodation in England, Scotland and Wales. The sample was drawn in 36 local authorities. Representatives of over 500 providers of supported accommodation were interviewed, and a detailed breakdown of the charges obtained from nearly 200 schemes. The fieldwork took place between autumn 1997 and spring 1998.
Housing Benefit claims were re-calculated using real cost estimates of rent and service charges derived from the breakdown of charges and information about the incomes and expenditures of the supported accommodation schemes. These ‘eligible’ claims were compared to actual Housing Benefit payments to establish the amount of ‘over-‘ and ‘underpayment’.
The supported accommodation sector
Half of the supported accommodation schemes that were surveyed by telephone had been set up after 1989, the year in which Parliament passed new community care legislation. However, there was no evidence that full implementation of community care after 1992 had led to a growth in the supply of supported accommodation schemes.
Housing Associations, statutory bodies and local authorities provided most of the supported accommodation although voluntary organisations and charities were also major providers. The private sector played only a minor role, accounting for eight per cent of schemes and about four per cent of residents.
Tenant profile
Most provisions were equally available to men and women, although 27 per cent and 15 per cent of schemes catered solely for men and women respectively. Schemes typically provided accommodation to a wide range of age groups. Explicit age restrictions were the exception, although the type of provisions and services available at a scheme would have attracted some age groups and excluded others. About a quarter of schemes were for residents who were aged 60 or over. Only about four per cent of schemes described the age range of their residents as exclusively 20 years of age or younger.
Housing Benefit and service charges
Housing Benefit is awarded to claimants to help meet the cost of renting. For claimants living in supported accommodation, the rent may include a service charge, which may or may not be eligible for Housing Benefit in whole or in part. Charges that are not met through Housing Benefit must be deducted from benefit payments. Where this is not done overpayments are incurred. Underpayments are also possible when the full eligible cost for services is not included in the Housing Benefit payment. This can occur if the claimant or the provider understate the true figure or if the local authority underestimates the eligible amount and deducts too much benefit. The research estimated the amount of both overpayment and underpayment.
Under regulation prevailing at the time of the survey, service charges in supported accommodation were eligible for Housing Benefit as long as they related to the ‘fabric’ of the dwelling: for example, lifts, emergency alarms and special adaptations for physically disabled people. Other services included under this provision were the cleaning of tenants’ rooms and windows, which was eligible when neither the tenant nor any member of the household were able to perform the task. Ineligible services included specialist tasks such as counselling and support of tenants on an individual or group basis, and the provision of meals. The so-called ‘50 per cent rule’ allowed some otherwise ineligible service charges to be covered through Housing Benefit when a landlord and/or his/her employees spent the majority of their time in which they were providing services, providing services to tenants which were eligible for Housing Benefit.
Housing Benefit claimants and expenditure
Two sets of estimates of the extent of over- and underpayment of Housing Benefit are presented. The first is based on the information collected from local authorities. However, follow-up case studies in eight local authority areas, which had participated in this research revealed that local authorities had not identified all supported accommodation schemes in their areas. Therefore a second estimate was constructed utilising estimates of the population of claimants in supported accommodation in Britain provided by the Department of the Environment, Transport and the Regions in collaboration with the Department of Social Security. The estimates were used to re-weight the original breakdown of charges derived from the interviews with providers.
Survey evidence
On the basis of the information provided by local authorities, the total number of Housing Benefit claimants in supported accommodation in Great Britain in 1996/7 was estimated at around 123,500 which included 47,300 claimants in sheltered accommodation. The total annual overpayment of Housing Benefit was estimated to range between £120m and £160m(1). Less than 10 per cent of claims were found to have been soundly based, and the underpayment was calculated to be between £85m and £115m. The total overpayment to Housing Benefit claimants in sheltered accommodation alone amounted to between £25m and £36m, the underpayment to between £6m and £14m.
The average Housing Benefit payment made to people in supported accommodation was £64.20. The average for claims where an overpayment was made was £71.40 of which the overpayment comprised £27.30, or 38 per cent. However, in 34 per cent of cases an underpayment was made. In such cases, the average payment was £58.70 but should have been increased by an average of £31.80. Claimants in sheltered accommodation received, on average, £49.30 per week in Housing Benefit. For cases of overpayment in sheltered accommodation, the weekly average Housing Benefit was £52.70, including £13.15 of overpayment. The average underpayment was £12.20; the average Housing Benefit of cases found to constitute an underpayment was £43.10.
The survey suggests that, if the current regulations in 1996/97 had been properly implemented, some 70,000 claimants in supported accommodation would have received a reduced level of Housing Benefit. This group would have included a disproportionate number of pensioners and people living in sheltered accommodation, but a below average number of Income Support/Jobseeker’s Allowance claimants.
Housing Benefit claimants whose benefit claim appeared to include an overpayment had a total income from pensions, benefits and earnings that averaged some £21, or 23 per cent, higher than that of other claimants. Their Housing Benefit payments were, on average, £16.50 (30%) higher.
Adjusted estimates
The estimates of Housing Benefit over- and underpayments based on the information provided by the Department of the Environment, Transport and the Regions (DETR) were much higher. This was primarily because these sources indicated that 447,000 people appeared to be living in supported accommodation in Great Britain and claiming Housing Benefit. The adjusted population estimate also suggested that around 80 per cent of these claimants lived in sheltered accommodation, compared to 40 per cent based on the information provided by Housing Benefit staff. Based on this estimate, the total overpayment of Housing Benefit may amount to between £360m and £480m, with underpayments ranging between £155m and £245m. For sheltered accommodation tenants, total overpayment was estimated at between £220m and £380m, total underpayment at between £91m and £117m. Only an estimated 5.5 per cent of cases would have been soundly based.
The average weekly Housing Benefit paid to, or on behalf of, tenants receiving an overpayment amounted to £56.80, including an average overpayment of £16.30. On average, underpayments were £18.30 per week, meaning that the tenants affected by underpayment received only £48.00 in Housing Benefit. The estimation using the adjusted population estimate did not affect the averages calculated for tenants in sheltered accommodation alone (see above).
Overpayments for England alone were between £250m and £340m and underpayments between £100m and £160m.
Some 300,000 Housing Benefit claimants in Britain were estimated to be receiving Housing Benefit in excess of the calculated eligible amount. People on Income Support/means-tested JSA and people living in sheltered accommodation were disproportionately likely to be subject to overpayments.
Claimants whose Housing Benefit was inflated by overpayments had a total post-benefit income that was £25, or 28 per cent, higher than for other Housing Benefit claimants in supported accommodation. However, payments of Housing Benefit were only £1.20, or 2.9 per cent, higher.
Conclusion
Providers of supported accommodation used a diversity of methods to calculate the cost of providing support and accommodation and to determine their charges. Likewise, Housing Benefit administrators applied different measures to assess the benefit entitlement of tenants in supported accommodation. These included using information from providers or rent officers, or independent judgement, to estimate the appropriate amount of deductions for ineligible service charges. The analysis of supported accommodation charges and Housing Benefit payments revealed that, in the majority of instances, charges for ineligible services were not fully deducted. In about one third of cases, however, deductions exceeded the real cost of providing services. Only a small minority of claims was soundly based.
“Views expressed in this report are not necessarily those of the Department or any other Government Department”
Relevant DSS Research publications
Department of Social Security (1998), “Supporting People: A New Policy and Funding Framework for Support Services”, DSS: London
Oldman, C., Quilgars, D. and Oldfield N. (1996) “Housing Benefit and Service Charges ”(DSS Research Report No. 55), HMSO: London.
(1) All ranges at 95% confidence interval.