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 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 follows a clear communication policy if rental arrears issues arise. This policy includes regular and early written communication with tenants, landlords and the relevant local authority. 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.
The approach taken by the HAP SSC has been very effective with minimal levels of rent arrears arising for HAP tenants. In 2019, the scheme had a 96% 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 2019, HAP support has been ceased for 1,213 tenancies due to tenant differential rent arrears. This represented 1.7% of all tenancies set up during that period.
In line with broader policy approaches on foot of Covid-19, a decision was taken in March 2020 to suspend the HAP Debt Management Process (DMP). Non-payment of differential rent during the Covid emergency period did not, therefore, affect payments to HAP landlords, although tenants that were not financially impacted by the COVID-19 measures were expected to continue to pay their HAP differential rent.
However, the payment of HAP in respect of those tenancies that had already entered the cessation stage of the DMP prior to the suspension of the process in March remained suspended, and local authorities were advised to proceed in ceasing those tenancies. In 2020, 18
tenancies have had their HAP support ceased for non-payment of differential rent, after the debt management process was fully completed.
In October 2020, I approved the recommencement of the DMP, with extended timeframes incorporated into the process to assist HAP tenants in clearing their arrears over a longer period of time. Since recommencement, over 2,000 households have been removed from the DMP and this has safeguarded the HAP support and landlord payments in those cases.
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 "live" operating system. 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.
HAP tenants in arrears should contact their local authority and the HAP SSC to discuss the options that are available to them to ensure the continuation of their HAP support.