This section considers some potential ways of easing or overcoming problems perceived by claimants if HB were to be paid directly to them, namely conscious or inadvertent spending and the hassle of making HB and rent transactions. These possible strategies are based on both claimants’ own comments and inferences drawn from them by the research team.
The young people and families who expressed anxieties about consciously dipping into HB money for things other than the rent present a somewhat contradictory picture, when the widespread strength of commitment to staying up to date with the rent is considered (see Chapter Three). While claimants’ concerns in the context of a hypothetical discussion were undoubtedly real, the outcome of such a
dilemma in practice can only be guessed at. It may be that the importance of keeping the roof over one’s head would override the temptation to spend HB on other things, though this would perhaps depend on how quickly and seriously people believed rent arrears would impact upon them. However, the association between such concerns and less organised money management and bank use suggests that budgeting advice and support in implementing a more structured routine for making bill payments may reduce the possibility of HB money being used to meet other financial commitments.
M A K I N G T H E T R A N S I T I O N T O C L A I M A N T P A Y M E N T
For claimants who felt they would get ‘confused’or that their income streams would get ‘mixed up’, leading to inadvertent spending of their HB, money management advice may again help them to make the change to claimant payment. For some people, managing a larger cashflow was evidently an unfamiliar and daunting prospect. One suggestion was that claimant payment could be introduced in increments for those with little experience of budgeting for the rent, beginning with the claimant taking responsibility for just part of their HB:
‘Do it gradually as opposed to just throwing them all that money and hoping’. Some claimants also noted that they would like more frequent and clearer statements of how much HB had been paid to them, as an aid to monitoring and distinguishing their income streams. Others said that, were they to change to claimant payment, they would use a separate bank account for receiving HB and paying rent. This would provide a means of separating a large and important outgoing from more general day-to-day spending. Indeed, such systems were being operated by some of the claimants in the study group who were already receiving HB themselves, in order to ensure that the money for rent was not ‘spent by accident’or ‘swallowed up’. Universal availability of HB payment by ACT would be a significant factor in easing the transition to claimant payment as the LHA is rolled out. Raising awareness of this option may also contribute to lesser anxiety among claimants, and thus fewer objections, as the scheme is implemented.13Regarding the perceived ‘hassle’of making rent transactions, a change to rent payment by standing order or direct debit might seem a simple solution (cf. DWP, 2004). A minority of claimants were paying rent in cash because their only facility was a POCA, which did not allow for any other method. Some of these people said that they would be happy to pay rent via an automated method if they had the option. However, in exploring people’s reasons for their current choice of rent payment method and their views on bill payment more generally, it emerged that several of the claimants had reservations about the use of automated payments. The reasons for this are described in Chapter Two, and included worries about becoming overdrawn and incurring penalty charges, and a general apprehension about using methods over which the account holder has less immediate control.
An important obstacle in this respect is the problems of HB administration, which often result in delayed or suspended payment of the benefit. HB claimants are necessarily on low incomes. If HB is to be normally paid to claimants, it will be crucial that it arrives in their account on time because many people do not have sufficient residual balances to cover the rent in the absence of the benefit. This was indeed the case for some people already on claimant payment, who explained that they needed to wait for their HB payment to arrive in their account (by ACT or giro) before they were able to pay the rent. It was also noted that problems could be encountered at the beginning of a new claim, in terms of the arrears that people with no alternative resources could build up if an award was not processed
partly depend on HB being deposited into claimants’ accounts in a timely and predictable manner, and not just on claimants’ own money management practices. A useful contribution from the banking industry may be to waive penalty charges where administrative delays to regular benefits result in claimants becoming overdrawn. Alternatively, local authorities could be required to pay the charges where they are the result of official errors or delays in the payment of HB. While not considered specifically among the challenges of adjusting to claimant payment, it is also worth recalling the extent to which claimants on landlord payment saw their benefit payment as belonging to the landlord and ‘…not my money’. A useful contribution to a smooth transition to claimant payment may therefore be to promote understanding of the legal position: that HB is a social security benefitbelonging to the claimant to help them pay their rent and that what the landlord is entitled to is the rent.