Let's think about this issue in the real world.

In housing and debt cases it is BY DEFINITION often the case that the client hasn't actually been paying the mortgage/rent (some even have the cheek to feed their kids first) and if they are approaching you for advice to negotiate preventing repossession on the offer of payments in future, then an interpretation of that rule as meaning actual payments would prevent ALL such work, which is clearly absurd. Now being absurd has never stopped the LSC, but everyone I know doing this work treats such unpaid amounts as payable and deductable.

If, AFTER assessing eligibility on the basis of what's payable and opening a file, you THEN advise the client that, say, there is no point opposing possession cos the borrowing/rent is unaffordable through change of circs (most commonly relationship breakdown) and that the client should concentrate on making a homeless application, or going bankrupt, then that is all still chargeable work. On the other hand, if a client refuses to pay their housing costs against your advice, then the sufficient benefit test means you end the case there, but you can still claim for the matter start.

And what about all the cases where the client comes for advise on poor housing conditions and has understandably or on advice withheld rent where repairs are due? Frankly I don't see how the rule "only what has actually been paid" applies in practice, unless at the start of an interview the client states they have no housing-related issues and can afford their rent/mortgage but choose not to pay it for no good reason. Do you get a lot like that? No, me neither.

Wasn't there a Judicial Review or High Court decision, or some such, on this very issue somewhere in the not-too-distant past? The LSC had nil assessed some files because on CW1s advisers had deducted the rent/mortgage actually due to be paid, and the LSC tried to say only what was in payment should be deducted. The LSC lost. I wish I had a better memory, but I am certain there was some battle over this, I'm sure it isn't a false memory (and of course, if your client is paying extra to clear arrears, this too can be deducted as an allowance, but a written agreement on the the arrears additional payment would be helpful evidence). Anybody else have a better memory (and filing system) than me?

Well done Fiona and apar, spot on. You would think I would remember things like this myself seeing as I act as a Project Consultant to CLS Support (!) And, what is totally worse: I wrote the darn thing back in August 2007

I think I must be getting old....

Here is the text of the bulletin (117), which explains the outcome of the JR against the LSC and why the full amount should be allowed, whether the client is paying it or not:

Financial Eligibility: Update on applying the Housing Costs Allowance

CLS Support Contracting email bulletin no. 117

Introduction

This bulletin is relevant to organisations performing means assessment calculations on behalf of clients.
It provides an update to CLS Support Contracting Email Bulletin no. 116: “Financial Eligibility: High Court clarifies meaning of “rent payable””.

What we told you in bulletin no.116

When assessing disposable income, the LSC view had been that you should not make a deduction for housing costs where the client is not actually making the payments they should be

This interpretation – in respect of clients who pay rent - had been successfully challenged by way of Judicial Review

We were going to write to the LSC to ask if it accepts that the same principle applies to clients who are liable for mortgage payments

What the LSC says now

We contacted the LSC and it confirmed that the same principle applies to mortgage payments. The LSC has now updated its website to reflect this change of interpretation in civil means assessment cases:
www.legalservices.gov.uk/civil/cls_news_6107.asp?page=51

Just to recap

A housing costs allowance can be allowed when calculating disposable income

If the client has no dependants eg doesn’t have a partner and/or children, then the maximum that can be allowed is £545

If the client has at least one dependant then the full amount that the client has to actually pay themselves can be allowed

Following the High Court judgement, even if the client isn’t paying the rent or mortgage the amount they should be paying can be allowed (including any payments towards arrears they might or should be making)

But remember

It is only the amount that the client is (or should) be paying that can be used when considering the housing costs allowance. This means that when calculating what the client is/should be paying, in order to apply the allowance, you should first deduct:

Any housing benefit that is being paid on behalf of the client (if the client is receiving full housing benefit then no housing cost allowance can be applied at all)

Any proceeds of sub-letting any part of the premises

Any amounts reasonably attributable to anyone else other than the client, their partner and other dependants, who is accommodated in the premises other than as a sub-tenant.

The LSC was granted right to appeal the High Court decision and is currently considering its position.

Further information and guidance

If you need any further information or guidance on any of the issues considered in this email bulletin, please contact the CLS Support consultancy service on 0870 7700 447 Monday to Friday 1pm to 4pm or email cls.support@asauk.org.uk at any time.
CLS Support email bulletins and briefings can be downloaded from the CLS Support User’s Area on the Advice Services Alliance website at www.asauk.org.uk/clssusers. Please contact us if you do not know your username or password.

Written by Patrick Torsney, CLS Support Project Consultant

Nice one Grahamslater for the heads up. Let us know what happens with the appeals


Rich