Thursday, 28 March 2019

Questions (211)

Eoin Ó Broin

Question:

211. Deputy Eoin Ó Broin asked the Minister for Housing, Planning and Local Government the number of households that had HAP payments ceased due to arrears; the average length of time the households were in arrears before payment was ceased; the average rent owed by households at the time rent was ceased in each of the years since the scheme was introduced; the steps taken by local authorities to address the arrears issue while maintaining the tenancy; and the guidance provided to both a centre (details supplied) and the local authorities to deal with such arrears while at the same time sustaining the tenant. [14556/19]

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Written answers (Question to Housing)

Tenants in the Housing Assistance Payment (HAP) scheme are required to sign a rent contribution agreement to pay a weekly rental contribution to the relevant local authority, in line with the local authority’s differential rent scheme. As set out in the rent contribution agreement, this weekly rental contribution must be paid by them so that they remain eligible for the HAP scheme. HAP recipients are required to set up automatic electronic rent payment arrangements.

The rent contribution agreement stipulates that "the HAP claimant acknowledges that the Local Authority will immediately suspend or cease making the Housing Assistance Payment to the landlord on behalf of the HAP Claimant in respect of the tenancy at the Property. Upon the Local Authority ceasing to make the Housing Assistance Payment the HAP Claimant shall immediately become liable for all and any rent payable to the landlord." In practice, however, suspension would not normally take immediate effect and engagement with the tenant is initiated.

The HAP Shared Services Centre (SSC) manages the collection of all HAP tenants’ differential rents, on behalf of the relevant local authority, and the payment of all HAP rents to landlords on behalf of tenants supported by the HAP scheme. The HAP SSC applies a very clear communication policy if rental arrears issues arise. This policy includes regular and early written communication with tenants, landlords and the relevant local authority.

Apart from issuing the formal notification letters, there would always be attempts to contact the tenants by phone and by email to settle accounts and avoid escalation of the debt process. Depending on the particular arrears in question, both the relevant local authority and the landlord are informed when an account has not been cleared and of possible suspension and/ or cessation of the HAP payment. However, in the vast majority of cases a payment plan to deal with the arrears is agreed between the tenant and the local authority, before there is any necessity to advise the landlord.

If the tenant does not contact their local authority or does not enter into a payment arrangement within 8 weeks of the arrears commencing, both the landlord and the tenant are informed that the HAP payment may be ceased.

My Department is satisfied that the practice of the SSC is appropriate, measured and effective and that local authorities, as housing authorities, have the expertise and resources to discharge their responsibilities towards social housing households including consideration of changed financial positions for households in HAP. There is no requirement for guidance from my Department to be issued regarding implementation of the debt collection process which is a matter for Local Authorities and the SSC operating on their behalf.

In relation to the average time in, and amount of, arrears outstanding at the time of cessation, the SSC advise that this information is not readily available from their system as they operate from a live system. They have not historically extracted specific information at the exact point at which the tenancy is ceased and what the balance is at that point in time. Information is only recorded on the current balance which will more than likely have changed since the tenancy was ceased if a write off of the amount outstanding had been approved or if the tenant began to pay off the arrears.

To date, the approach taken by the HAP SSC has been very effective with minimal levels of rent arrears arising for HAP tenants. In 2018, the scheme had a 98% differential rent collection rate, with minimal arrears arising for tenants or local authorities. Therefore, only a very small number of tenants have fallen into difficulty with their differential rent. Since HAP was rolled out in 2014 to end 2018, HAP support has been ceased for 665 tenancies due to tenant differential rent arrears. This represents 1.2% of all tenancies set up during that period.

Tenancy sustainment is a very important factor in relation to keeping households in their homes. This is why the SSC operate, on behalf of the 31 local authorities, a graduated approach to cessation rather than the immediate cessation outlined in the rent contribution agreement. There are a number of avenues for a tenant experiencing financial difficulty including early engagement with the relevant local authority or the Community Welfare Officer. Notwithstanding the assistance available to tenants, there is a fundamental need for a tenant to acknowledge and make the maximum effort to fulfil their personal responsibilities and requirements in relation to contributing to their accommodation costs and to engage early when difficulties arise. The rent contribution that a household is asked to pay is calculated by the local authority having regard to the financial circumstances of the household and affordability. The HAP scheme is funded through a combination of the contributions from households and exchequer funding, so it is absolutely critical that additional unnecessary burden is not placed on the exchequer to offset non-payment of differential rent.

As the HAP scheme grows, the SSC are continuously working to improve systems and processes, including debt management processes. My Department, with the assistance of stakeholders, including the Housing Agency, HAP Practitioners from local authorities and also the Department of Employment Affairs and Social Protection, will continue to work with the SSC to ensure that the debt management process is reasonable and effective and that the appropriate tenancy sustainment options are in place.