INCOME MANAGEMENT POLICY

Transcription

1 INCOME MANAGEMENT POLICY 1. Principles 2. Aims 3. Methods * Arrears Prevention * Debt Recovery * Rent Accounting 4. Statutory and Regulatory Requirements 5. Performance Monitoring 6. Review 7. Date of Policy -.1 -

2 1. PRINCIPLES 1.1 Colne Housing Society is committed to an efficient effective and socially responsible system of preventing, managing and collecting tenancy related debt. The Society recognises that effective control of rent arrears improves the general perception of the Society as an efficient landlord and is of benefit to all tenants of the Society s homes. 1.2 This policy also addresses debts relating to the costs of repairs caused by tenant damage or negligence (former and current tenants) and rent arrears owed by former tenants 1.3 The Society s policy and procedures for the management of current tenant rent arrears is designed to maximise the recovery of arrears during the course of a tenancy, and to avoid situations where arrears remain at the end of a tenancy. However, it is inevitable that there will be instances where arrears are not recovered before the end of a tenancy, for example following an eviction, or where tenants have abandoned a property. 1.4 Where repairs are required due to tenant damage or negligence, these will only be carried out where there is a statutory repairing obligation. The Society will always attempt to receive payment in advance from tenants in these circumstances. 1.5 The Society is committed to maximising the collection of rechargeable repair invoices from both current and former tenants. It is recognised that the costs associated with debt recovery need to be considered when determining the type of actions taken in relation to the amounts owed. 1.6 The Society recognises that there are significant differences in the needs of tenants living in different types of housing. In response to this, the management of arrears for tenants living in sheltered and supported housing, and leasehold properties is dealt with by a specialist officer within the Supported Housing team. All arrears for general needs accommodation and private sector leasing properties are managed by the income management team reporting to the Housing Manager. 2. AIMS 2.1 In the context of this policy, Colne Housing Society aims to: a) Place the emphasis on debt prevention by action and advice at an early stage, where possible before the commencement of a tenancy

3 b) Ensure a payment culture is achieved where the tenant understands and acts upon their responsibility for paying their rent. c) Ensure that tenants who experience difficulty with debt problems are treated in a practical and helpful way. d) Ensure a procedure is in place which achieves the maximum possible collection of debt and treats all tenants consistently. e) Provide a range of convenient and flexible payment methods to maximise the opportunities for tenants to pay their rent and other charges f) Provide regular clear, easy to understand rent statements including the ability for customers to view these on-line. g) Make appropriate arrangements to effectively communicate with all tenants, making special provision for those who suffer communication impairment as a result of physical, sensory, learning or mental impairments and, where applicable, through a third party advocate. h) Maximise tenants income by providing or facilitating appropriate debt management advice, and assisting in enabling HB claims and proactively working with tenants to ensure take up of any other relevant benefits. i) Recover the outstanding debt without resorting to eviction while recognising that eviction may be the ultimate outcome of failure to maintain the rent account in an acceptable fashion. j) Pursue recovery of rent arrears and re-chargeable repair debts while it remains practical and cost efficient do so. k) Minimise rechargeable repair debt by requesting payment in advance and only carrying out rechargeable repairs where there is a statutory repairing obligation. l) Have procedures which ensure that appropriate and effective debt recovery action is taken, and which give clear guidance to staff on the debt recovery actions required in accordance with the amount of the debt, and/or the length of time it has been outstanding, whilst ensuring tenants with diverse needs are appropriately accommodated within these procedures. m) Have effective monitoring systems in place to identify late and missed payments. n) Negotiate agreements to reduce the debt in realistic and affordable instalments over a specific time period

4 3. METHODS 3.1 In order to achieve these aims the Society will use the following methods Debt Prevention a) Contact the tenant or their advocate as soon as possible once the tenant falls into arrears to discuss the cause, financial circumstances and entitlement to housing benefit and the repayment of the arrears. b) Have protocols in place in order to refer tenants with debt problems to Citizen Advice Bureaux or other relevant agencies for money advice counselling and where possible Colne staff to also provide such relevant debt and money advice at any stage throughout the tenancy. c) Tenants in need of floating support will be referred to the support provider promptly and prior to tenancy commencement wherever possible. d) Contact with housing benefit departments is made at an early stage and where possible prior to commencement of a tenancy. Tenants will be asked to sign a permission to share information form at the start of their tenancy to assist with the process and where provision is in place with the relevant local authority, to work with them at the tenancy sign up to facilitate any HB claim at that time. e) Estimates of housing benefit entitlements will be notified to new tenants, and existing tenants where there is a change in financial circumstances. Payment levels should be agreed accordingly. Tenants will be offered assistance in claiming housing benefit. f) Advice will be given at tenancy sign up on payment methods, (Including Allpay and setting up direct debits) submitting housing benefit claims and setting up agreements to pay. A payment regime will be agreed at the commencement of the tenancy and the appropriate payment collected at that time, based on estimated entitlement to Housing Benefit. g) Provide quarterly rent statements showing rent due and payments made for the previous 13 weeks. h) Provide on-line facilities through the My Tenancy website for viewing rent statements. i) Provide on-line and text facilities to facilitate payment of rent

5 3.1.2 Debt Recovery a) Have procedures to ensure that appropriate and effective debt recovery action is taken. b) Have a sensitive approach to dealing with arrears of tenants who may be vulnerable, for example, because they are elderly, have mental health problems, or learning or language difficulties. The appropriate statutory and voluntary agencies will be contacted in these cases, with the tenants consent. Contact with tenants will be appropriate to their needs, and protocols and staff training put in place to ensure best use of personal client information, together with an awareness of use of sensitive data. c) Have effective monitoring systems in place to identify late and missed payments. d) Negotiate affordable agreements based upon the tenant s income and expenditure, to reduce the arrears in realistic and affordable instalments over a specified time period. In appropriate cases, the Society will arrange with the Department for Work and Pensions for the arrears to be paid direct from the tenants benefit. Applications for Attachment of Earnings Orders will be made where tenants are in permanent employment. e) Keep records of action taken at each stage in the debt recovery process, in particular attempts to contact the tenant, interviews and conversations with the tenant and details of repayment agreements, in accordance with the prescribed pre-action Court protocol for possession claims. f) Make use of all the available options for debt recovery and have clear procedural guidelines as to what the Society considers to be the appropriate use of the various recovery methods, including the use of Ground 8 Notices Seeking Possession where there has been no contact with the tenant, or the debt is persistent over a long period of time. g) Deal with debt resulting from delays in housing and other benefits sensitively, but in a manner consistent with the process used for all arrears. Possession proceedings should not be started if the tenant has provided the local authority with the evidence required to process a housing benefit claim, and has a reasonable expectation of eligibility for housing benefit, and has paid the balance of the rent not covered by housing benefit which it is anticipated will be received. h) Delegate authorisation of evictions to the Chief Executive or in his/her absence another Director, to allow adequate control of process. i) Utilise and telephone text messages to make contact with tenants, in addition to letters, the telephone and personal contact

6 3.1.3 Rent Accounting and IT Systems a) Ensure the rent accounting and debt recovery information system is capable of providing appropriate and accurate operational, management and performance data and interfaces with other aspects of the IT system. b) Ensure that the rent accounting system is able to: i) Produce rent accounts quarterly. ii) iii) iv) Produce individual rent statements on request. Produce details of the payment history of each tenant. Record details of steps taken to try and recover the arrears and be capable of producing a flexible range of reports. v) Produce up to date statistics about tenants in arrears. vi) Produce standard letters and documents which form part of the arrears recovery procedures Re-chargeable repairs and other sundry debts a) Repairs caused by resident damage or negligence will not be completed unless it is a statutory repairing obligation or the resident pays the full cost in advance. b) Where a repair is identified as rechargeable after being carried out (usually by the contractor) the resident will be sent a letter telling them that the repair will be recharged and the reason. Full payment will be requested but affordable repayment plans will also be accepted. c) Tenants may also be liable for charges made for breaking repairs appointments without prior notice, or for misuse of the emergency repairs service. There may also be a liability for charges made in connection with the Society s efforts to gain access to their home to carry out the annual gas safety check, such as court costs and solicitors fees. c) In the event of non-payment after two contacts from the Society, an emergency-only repairs service will be authorised by the Housing Manager or Supported Housing Manager. The resident will be advised in writing and that full payment will result in a full repairs service being reinstated. The resident will also be advised of their right to dispute the re-charge or other debt (such as legal costs incurred in attempting to gain access to carry out a gas safety check) -.6 -

7 d) A range of methods will be used to collect outstanding repairs recharges and other sundry debts, including letters and telephone calls, referral to debt collection agencies, and action through the small claims Court. e) Repairs recharges and other sundry tenant debts where all reasonable efforts for collection having taken place are written off by Operations Director at least once a quarter Former Tenant Debt a) At the commencement of a tenancy, full household details are recorded together with former addresses, next of kin and the national insurance numbers, which could assist with recovery of debts outstanding at the end of the tenancy. b) In the event of eviction for rent arrears, the rent debt will be immediately passed for write off and offered to a debt collection agency on a commission only basis. c) When notice is given on a tenancy, the resident will receive a letter giving details of their actual debt and its likely level at the tenancy end date. Attempts will be made to recover the full debt or enter into an affordable repayment plan. Details of forwarding addresses will be sought. d) If the debt is not paid within a week of the tenancy ending, immediate contact will be made advising that referral to a debt collection agency or legal action will follow. If the tenant s address is not known reasonable enquiries will be made to ascertain their whereabouts. After 3 months a trace will be instigated for all debts over 250. If the trace is unsuccessful the debt will be immediately written off. Debts under 250 will be written off if a forwarding address is not known. e) If a trace is successful, further contact will be made. Failure to clear the debt or enter into a repayment plan will result in the case being referred to a debt collection agency. Should no payments be received within 6 months, the debt will be written off. Former tenants with debts will be advised that the Society will take legal action if they fail to pay. However, legal action will only be considered where there is a reasonable chance of achieving a positive outcome. f) The Housing Manager and Supported Housing Manager will have discretion to authorise one-off agreements with residents to pay a proportion of their debt and have the remainder written off. g) All requested write offs must receive the sanction of the Housing Manager or Supported Housing Manager. The Operations Director has delegated authority to write off former tenant debts up to 500. The Chief Executive has delegated authority to write off former tenant debts up to 1,000. All debts over 1,000 are referred to Finance & General Purposes for write off

8 h) After write off, details of debts will be held in perpetuity and where contact is later made with a former tenant, it may be written back and agreements made. Consideration will not be given to rehousing former tenants with debts until either a repayment schedule has been complied with for an agreed period of time, or the debt has been cleared in full. i) Where the Society has written off debt relating to rechargeable repairs, application will be made to recover VAT on these invoices. 4. STATUTORY AND REGULATORY REQUIREMENTS 4.1 Through this policy and the procedure attached at appendix 1, the Society aims to comply with the TSA s Regulatory Framework and with the pre-action protocol for possession claims based on rent arrears issued by the Ministry of Justice. 5. PERFORMANCE MONITORING 5.1 The Society will carry out systematic performance monitoring of the efficiency and effectiveness of all aspects of services associated with debt recovery. This includes reporting the following indicators to the Operations, and referral of write offs to the Finance & General Purposes :- Arrears as % of annual debit current and previous years for all activities and general needs. Average arrears (12 month rolling) as % of annual debit current and previous years for all activities and for general needs. Value of former tenant arrears collected. Value of outstanding former tenant arrears and other sundry debt (repair re-charges and legal costs). Recommendations for former tenant arrears write offs cases over 1,000. Value of former tenant arrears write offs under 1,000. Quarterly to Operations Quarterly to Operations Annually to Operations Twice Yearly to Operations Twice Yearly to Finance and General Purposes Twice yearly to Finance and General Purposes -.8 -

9 6. REVIEW 6.1 The Society will formally review its Income Management Policy through the structure once every three years taking into account any changes and making amendments accordingly. 6.2 In addition to this, amendments considered of sufficient magnitude or importance will be implemented in between review dates where appropriate, in particular where there are relevant changes in housing or benefit legislation. 7. DATE OF POLICY 7.1 June