UC and service charges

HI i was reading through the regulations and the three points of what constitute a service charge in the first draft i.e “fabric of the accomadation” has disappeared and under Paragraph 31 of schedule 4 contains a rule which disqualifies any payment included in the charge which “ (b)relates to the supply to the accommodation of a commodity (such as water or fuel) for use by any member of the renter’s extended benefit unit”

So does this means that all services charges for the social sector, which are part of the tenancy will be taken into account apart from the rule above as their seems no definition in the regulations? i must be missing something so if anyone can enlighten me that would be great!

Para. 31 is in Part 5 of Sch. 4 and only applies to social housing.

You need to look at Sch. 1 Para. 7 and Para. 8 for general service charges rules.

They’re broader than in the first draft but you will notice that service charges for those in tents are excluded.

My recollection is that tent costs have been met by DWP benefits up to now, whereas caravans were met by HB, so there is obviously a crusade against tent dwellers.

I agree with Gareth.  The service charge rules have been completely recast.  My reading is that the whole of the cost of meals is eligible in private sector housing for example.

I’m told that there was a lot of horse trading between the DWP and groups like the National Housing Federation.  The service charge regulations are the result.

A DWP survey of 20 local authorities showed that they had been asked by social landlords to meet about 400 different “service charges” between them, so we can hardly blame the DWP for wanting to rationalise the system.

We now have a set of regs which could be said to include a wider range of things than the draft, but a lot will depend on the guidance.  I suspect staff (or the computer) will be given a list of services which the DWP intends should be eligible and everything else will be disallowed.  There will no doubt be lots of appeals which will keep all us consultants in work.

“There will no doubt be lots of appeals which will keep all us consultants in work.”

But we won’t get paid??

The regs even define a tent, amongst other things, as not being a caravan.

Chris makes an interesting point about meals.

Owners and social tenants have such charges specifically excluded by Sch. 1 Para.8(6)(c) but there doesn’t seem to be an equivalent for private tenants.

In Para. 7 the basic rules are set out as

(1) “Service charge payments” are payments which—
(a) fall within sub-paragraph (2);
(b) are not excluded by sub-paragraph (3)

(2) says

The payments falling within this sub-paragraph are payments of amounts which are, in
whole or in part—
(a) payments of, or towards, the costs of or charges for providing services or facilities for
the use or benefit of persons occupying accommodation; or
(b) fairly attributable to the costs of or charges for providing such services or facilities
connected with accommodation as are available for the use or benefit of persons
occupying accommodation.

It would seem that meals would fall within 2(a) as a service or facility of benefit to occupiers.

(3) says

Payments are excluded by this sub-paragraph where—
(a) a loan that falls within paragraph 5 was taken out for the purposes of making the
payments; or
(b) the services or facilities to which the payments relate are provided for the use or benefit
of any person occupying—
(i) a tent,
(ii) approved premises,
(iii) a care home, or
(iv) exempt accommodation.
(4) It is irrelevant for the purposes of sub-paragraph (2)—
(a) whether or not the payments are separately identified as relating to the costs or charges
referred to in sub-paragraph (2);
(b) whether they are made in addition to or as part of any other payment (including a
payment that would otherwise be regarded as a rent payment within the meaning of
paragraph 2);
(c) whether they are made under the same or a different agreement as that under which the
accommodation is occupied.

None of those conditions seems to apply to exclude meals.

The previous draft had said

Excluded service charges

Charges of the following description are excluded from Part 1.
4.—(1) Charges in respect of day-to-day living expenses including, in particular, all provision of—
(a) meals, including the preparation of meals or provision of unprepared food;
(b) laundry;
(c) leisure items (but see sub-paragraph (3));
(d) cleaning of rooms and windows charges;
(e) transport.
(2)Sub-paragraph (1)(b) does not apply to charges for the provision of premises or equipment to enable a person to do his or her own laundry.

Which mirrored, largely, the HB regs.

The questions are:

a) Have they hidden the limitations somewhere else?
b) Is it a drafting error?
c) Do they mean it?

I think that the idea is to keep private sector claims simple, so there is not going to be a lot of having to ask information from private landlords who are not necessarily exactly sure what they are charging for, especially in board and lodging places.

Instead they will rely on the LHA limits.  However the interesting thing is that, at the moment, there is no LHA for boarders, so far as I can tell.  Instead claims are determined using the old reference rent system, which otherwise only applies to those housing association rents that are referred to the rent officer.  The government has said that it will get rid of the reference rent system, since it is nearly redundant, so somewhere there ought to be new arrangements for limiting board and lodging charges.  But I haven’t found it yet.

I’d be interested in any light people can shed on rent limits in

* private sector board and lodging
* caravan site rental
* mooring charges for a houseboat

Any ideas?