The transfer of the rent abatement scheme to Social Security

1240/5(3979)

WRITTEN QUESTION TO MINISTER FOR HOUSING BY DEPUTY G.P. SOUTHERN OF ST. HELIER

ANSWER TO BE TABLED ON TUESDAY 1st JULY 2008 Question

Following his answer given during questions without notice on 29th April 2008 –

1. W o uld the Minister informMemberswhat difference the transfer of the rent abatementscheme from the Housing Department to IncomeSupportthroughSocialSecurity has madeto his Department'srevenue stream?

Answer

The transfer from Rent Abatement to Income Support has not made a significant difference to the Department's revenue stream in so much as the Department continues to charge rent at the same level as when the abatement scheme closed.

The key difference in the two schemes is the capacity for Income Support to pay the full cost of the tenant's rent including utility charges whereas under the abatement scheme tenants even those on maximum abatement always paid a minimum sum plus their utility charges.  The advantage to the tenant with Income Support is that benefit level permitting the full cost of their home is paid for them direct.  Where any arrears exist, it enables the tenant to focus on reducing the amount they owe to the States, without the added pressure of weekly rental charges. Fundamentally, the process supports those in greatest need.

Question

2. C o uld he further inform Members what conversation, if any, has taken place between the Housing Department and the Social Security Departmentover the discretion to pay rent directly to the Housing Departmentorthrough the tenants?

Answer

The Housing and Social Security Departments worked closely together in the run up to the implementation of the Income Support scheme to ensure that there was minimal impact or inconvenience to the Housing Department's tenants at the point of transition. Under the abatement scheme the rent subsidy was credited directly to the tenants' account. No payments were made by the Department to the tenant. That principle was carried forward to Income Support. In addition, significant thought was given to making the interface between the two Departments as efficient and robust as possible.

The following advantages are achieved by making payment direct:

1. Payment is made direct to the tenant'saccountproviding them with significant assistance in managing their accounts; particularly where they are having all of their rent paid byIncomeSupport.
2. Funds are transferred betweentheDepartmentsby electronic interface and the rent is paid in to the tenant's account whendue. This saves time andmanpower resources in pursuing latepayments from tenants whomaynot have had time to collect their money from their bank to make their rent payment to the Department.
3. The transfer offunds in this waygives the taxpayer certainty that benefit claimed undertheschemeis directed to its intended purpose. If this wasnottohappentherisk exists that thepaymentwouldnot reach the Department. This would conflict with the effective governanceoffunds for the Statesas a whole.

4. This electronic process,carriedout internally saves expenditure in transaction fees at organisations such as the Post Office in taking rent payments over thecounter from tenants. It wasestimated that bymaking payments directly to tenants, the States of Jersey could potentially have been exposed to increased transaction charges in excess of £100,000.per annum.
5. Article 38 ( 2b ) of the Public Finances ( Jersey ) Law 2005 requires that the Accounting Officer of a Department ensures that all money owed to the Departmentis promptly collected. Article 38 ( 2e ) of that Law also requires that theDepartmentis administered in a prudent and economicalmanner.The current mechanism supports these statutory obligations.
6. Where a claimant can demonstrate that there is a clear need for the rental componentof their Income Support benefit to be paid to them and not to the Department then the Social Security Department can elect to permit exceptions to the protocol.
7. Anecdotal evidence suggests that the direct payment system has been welcomed by tenants and according to theSocial Security Department there have beennomore than half a dozenrequeststoopt out.

The overall objective was to deliver an efficient effective system which provides value for money and benefits the customer. We believe that working closely together in this way the two Departments have achieved this.

Question

3. W ill the Minister undertake, as a matterof urgency, to ensure that the HousingDepartment'swebsiteis updated, as the Publications' section still contains a guideto the RentRebate/Abatementscheme dated 2005, whichwasscrapped in January 2008?

Answer

All sections of the Housing Department's website, including publications', have been checked and where necessary updated.