This was written in 2015 & remains relevant today.
The purpose of this Briefing is:
- To explain what Exempt and Specified Accommodation is and to make clear my view that most “Specified Accommodation” is actually “Exempt Accommodation”
- To explain the Welfare Reform Act implications of Exempt and Specified Accommodation
- To give comprehensive examples of Additional/Intensive Housing Management tasks and functions
- To examine the future for Enhanced Housing Benefit and Additional/Intensive Housing Management
In recent months there has been much discussion about Exempt Accommodation and Specified Accommodation and a great deal of confusion about the difference between “Exempt” and “Specified” Accommodation.
The purpose of this briefing is to define what these definitions really mean and to make the very important point that most supported and sheltered housing, hostels and refuges currently being defined as “Specified Accommodation” but not “Exempt Accommodation” are actually Exempt Accommodation. This is very important for providers and local authorities from a financial point of view and to tenants/licensees from a Welfare Reform protection perspective.
As you may know the UK Government had said in 2012 that tenants in Exempt Accommodation would have the housing component of their Universal Credit administered outside of Universal Credit according to the Exempt Accommodation rules and would be protected from elements of the Welfare Reform Act (described below). Lord Freud, the UK Government Welfare Reform Minister, also subsequently said (September 2012) that there are some supported and sheltered housing services that “don’t meet the precise definition of Exempt Accommodation”. Such schemes, it is argued, might include agency-managed services and services providing “insufficient care, support and supervision”. We believe very strongly that, in the vast majority of cases, agency-managed schemes may well be Exempt Accommodation, and certainly can be established as Exempt Accommodation with some minor adjustments to the documentary arrangements in place.
The DWP then proceeded, in consultation with parts of the sector, to devise a widened definition that would capture both Exempt Accommodation and also those schemes that it claimed “don’t meet the precise definition of Exempt Accommodation”. This widened definition is known as “Specified Accommodation”.
So What Is Specified Accommodation?
There are 4 categories of “Specified Accommodation” as follows:
Category 1: Exempt Accommodation.
The term “Exempt Accommodation” came into being in 1995 as a means of identifying types of accommodation that were exempt from what was known at the time as “Local Reference Rents”, which capped the amounts of rent that private landlords could charge.
For an Exempt Accommodation scenario to exist ALL of the following 4 criteria must be fulfilled:
- The landlord must be a non-metropolitan county council; voluntary organisation, charity or Registered Provider (housing association)
- The landlord must have legal interest in the properties concerned (ownership or lease)
- The tenants concerned must need “care, support & supervision” (in case law terms this means “more than normal property management functions)
- The additional services to meet those needs (“Additional/Intensive Housing Management”) must be provided by the landlord or an agent on its behalf
- Entitles a social landlord to recover the costs of providing additional services to tenants/residents with additional needs via Housing Benefit.
- Enables local authorities to fund enhanced levels of Housing Benefit, subject to a properly evidenced claim which shows that the money claimed equates to the cost of eligible additional services provided.
- Enables local authorities to reclaim the money from the DWP via their Subsidy Claim. 100% where a Registered Provider (Housing Association) is involved but less where one is not.
Exempt Accommodation protects tenants from Welfare Reform Act provisions such as:
- Spare Room Subsidy (“Bedroom Tax”)
- Benefit Cap
- Direct payment of rent
Exempt Accommodation applies, subject to the 4 qualifying criteria above, to:
- Most supported Housing
- Most sheltered Housing
- General Needs Housing where the tenant has additional needs (Tenancy Sustainment)
Category 2: Supported housing where a third party (not the landlord) provides the “care, support & supervision”
Typically this would include agency-managed supported housing and schemes where tenants have personal budgets and purchase care packages from a third party provider.
As a consequence of this definition and some of the advice that has been provided within the sector, many providers have assumed that agency-managed schemes and accommodation within which tenants use personal budgets to buy care packages from third parties are not Exempt Accommodation. However, this assumption is very often incorrect.
We have to ask ourselves the question “what is care, support and supervision”? The case law definition (see Bristol City Council vs. AW  and CSH/250/2104) is “more than normal property management functions”. So where a tenant has additional needs that require additional/intensive housing management and the landlord or an agent on its behalf provides the additional/intensive housing management, it is Exempt Accommodation, not Specified Accommodation category 2.
When we think about, it in most of the schemes wrongly classified as Specified Accommodation category 2, the landlord and/or the agent on its behalf provide Housing Benefit eligible additional/intensive housing management services in addition to and irrespective of any Housing Benefit ineligible care and support services that might also be provided. The fact that these additional/intensive housing management services are provided by the landlord or by an agent on the landlord’s behalf means that the scheme/service is Exempt Accommodation.
Such additional or intensive housing management services include, but are not limited to:
- General needs housing management functions that are more intensively provided as a consequence of the additional needs of tenants
- Additional or intensive housing management functions and tasks that would not be provided in general needs accommodation where no additional needs exist. Such tasks and functions include but are not limited to:
- The provision of an alarm (even though alarms are not HB eligible) or the Housing Proactive system (which is HB eligible and is also entirely free to providers and tenants who are HB eligible)
- Controlling access to the premises (concierge type services)
- Ensuring rent is paid regularly and on time.
- Explaining the occupancy agreement and assisting people to abide by it.
- Organising inspections of property and arranging for any repairs or improvements to be carried out, including the replacement of furniture.
- Ensuring that people are aware of their rights under their occupancy agreement.
- Offering advice and guidance on keeping property to a reasonable standard of hygiene.
- Assisting people to access other support providers as required.
- Liaising with all relevant agencies, both statutory and voluntary, on the tenant’s behalf.
- Assisting people to reduce rent arrears.
- Dealing with nuisance issues.
- Ensuring that people know how to use equipment safely.
- Providing people with advice and facilitating a move to alternative accommodation as required.
- Assisting people to claim Housing Benefit and other welfare benefits.
- Helping to keep people safe by monitoring visitors, including contractors and professionals, and by carrying out health and safety and risk assessments of property.
Please see Appendix 1 for the technical definition of what constitutes an HB eligible service charge where people have additional needs. This is very useful where you are told “there’s no such thing as “Intensive Housing Management”, which of course misses the point by focusing on an informal phrase that describes services that people with additional needs might require in connection with the provision of adequate accommodation.
Category 3: refuge provision
Refuges for people subject to domestic violence and abuse are in an identical situation to Category 2 Specified Accommodation (above), which is that in the significant majority of cases they are Exempt Accommodation and not Specified Accommodation category 3.
The fact that people in refuge accommodation don’t also need to be in receipt of “care, support or supervision” by way of 3rd party funding is immaterial in this context as they will almost inevitably be in receipt of “more than normal housing management functions” anyway and therefore fulfill the case law definition of “care, support and supervision” for the purposes of Exempt Accommodation compliance.
Category 4: local authority hostels
Support Solutions UK has recently undertaken a lot of work with local authorities that have their own direct provision. Most local authorities are registered as registered social landlords with the appropriate regulatory bodies depending on which UK nation they are located in.
The fact of being a registered social landlord (and assuming compliance with the other 3 of the 4 Exempt Accommodation criteria, which is likely in the case of hostels and other accommodation for people with additional needs) means that local authority hostels are exempt Accommodation, not Category 4 Specified Accommodation.
Specified Accommodation categories 2, 3 and 4 means:
- Protection from Benefit Cap & direct payment of rent but NOT Spare Room Subsidy (unlike Exempt Accommodation, which protects tenants/licensees from Spare Room Subsidy).
- No guarantee of enhanced Housing Benefit if the rents are deemed “unreasonably high” as the local authority may refer the rent to the Rent Officer (unlike Exempt Accommodation, with which the local authority has to have regard for the costs of suitable accommodation elsewhere on a like for like basis if considering a restriction on rent or service charge)
- Rent levels restricted to Local Housing Allowance where no Registered Provider is involved
If it is the case, as we strongly believe, that services that really are Exempt Accommodation (or “Specified Accommodation Category 1”) are being misdefined as Specified Accommodation Categories 2, 3 or 4 then we are guilty of failing to challenge an incorrect view of services that “don’t meet the precise definition of Exempt Accommodation” and consequently restricting Welfare Reform Act protection from tenants with additional needs and we are guilty of foregoing the opportunity to properly fund services for tenants with additional needs.
The Future for Enhanced Housing Benefit
I have worked since 2005 to assist organisations to allocate Additional/Intensive Housing Management costs into Housing Benefit where it is right and proper to do so. Most commonly this occurs where provider organisations have lost revenue from Supporting People but also where providers have not recovered their full eligible costs from Housing Benefit, irrespective of whether they receive Supporting People funding.
When I first introduced this idea with Support Solutions and reintroduced the concept of “Intensive Housing Management” it was treated by some with opposition and suspicion but has now become the default position for local authorities and providers, especially where Supporting People funding is being reduced or withdrawn. We were told that it wouldn’t survive the Welfare Reform Act but, on the contrary, Exempt Accommodation and Additional/Intensive Housing Management has become the gateway to proper levels of funding for services for people with additional needs and provides protection for such people from elements of the Welfare Reform Act such as:
- Spare Room Subsidy (“Bedroom Tax”)
- Benefit Cap
- Direct payment of rent
Enhanced Housing Benefit applies to supported and sheltered housing and to general needs social accommodation where tenants have additional needs (Tenancy Sustainment services). But we have to ask the question, as many do, “how long will it last”?
When Lord Freud said in September 2012 that there are services that “don’t meet the precise definition of Exempt Accommodation” as a precursor to the introduction of Specified Accommodation, he also suggested that funding for Exempt Accommodation would be “localised” at some point in future.
We believe that this is likely to happen at some point in future so it is important for providers who are entitled to claim Enhanced Housing Benefit for Additional/Intensive Housing Management services to do so. It is also important for local authorities to agree well-founded and reasonable claims, as these are likely to contribute to local authority legacy funding going forward. To the extent that local authorities discourage such claims is the extent to which they may well limit the size of their own funding pot at the point at which the Exempt Accommodation budget is devolved. The UK Government might consider devolving Exempt Accommodation funding in the same way that it devolved Council Tax funding to local authorities (i.e. by taking the amount each local authority had claimed from the UK Government by way of Council Tax Benefit subsidy in the financial year 2012-13, deducting 10% and then devolving it to local authorities from April 2013).
There is a General Election looming of course, so things may change; however, our belief is that funding for Exempt Accommodation will be devolved to local authorities in England, which doesn’t have its own Government, and possibly to national Governments in Northern Ireland, Scotland and Wales.
We know that the DCLG & DWP have commissioned a review of the scale, shape and cost of the supported housing sector. We hope that it also considers its value! This review has yet to report and the forthcoming General Election will doubtless impact on the timing of its publication and possibly its outcomes. We will keep you posted as to developments when we are made aware of them.
Whatever the nature of any change please consider your organisation’s position, whether you’re a provider of services or a local authority Housing Benefit or commissioning colleague. Providers, both statutory and non-statutory, should ensure that they have reviewed their Housing Benefit revenue and their rent structures to ensure that their claims match the costs of the Additional/Intensive Housing Management services they provide to people with additional needs in supported, sheltered, hostel, refuge and general needs accommodation. I will help you do this and negotiate your claims for you on very, very favourable commercial terms as I always have (i.e. if we don’t successfully increase your housing revenue, you don’t pay us). Local authorities should also consider their strategic positions in relation to the payment of enhanced Housing Benefit for well-founded and reasonable claims and their ability to reclaim through subsidy what they pay by way of Enhanced Housing Benefit; again, I will be pleased to assist in this.
If and when funding for Exempt Accommodation is devolved it is likely to become a cash-limited pot, which may then be paid according to a limited set of eligible tasks. We believe that this is the wrong approach but inevitable whilst government at both central and local level prioritises cost over value and persists with separate funding pots for different types of additional needs (e.g. intensive housing management, support, social care, personal care etc.).
“There is no exhaustive list of what can be defined as an eligible service charge. To be an eligible charge for HB purposes the charge must be connected with the provision of adequate accommodation having regard to the personal needs of that tenant group. Authority for this can be found in the DWP Adjudication Circular A22/2008, which was published in December 2008. Page 18 within Appendix A of that circular states that ‘The Commissioner’s decision in CIS 1460/1995 is authority for the proposition that the individual needs of the residents are relevant to the question of what is adequate accommodation. Arguably the special needs and problems of the residents of the home cannot be ignored in relation to paragraph 1(g)’ Paragraph 1(g) of Schedule 1 is of the Housing Benefit Regulations and relates to the service being connected to the provision of adequate accommodation. This is therefore suggesting that a service can be eligible having regard to a resident’s personal circumstances. The general population within supported housing are vulnerable people all in receipt of care and support and thus encompass a specific set of needs therefore the provision of an intensive housing management service is probably essential to the general tenant population of this specific type of accommodation.
Supported Housing is provided to primarily tenants who are disadvantaged with a wide range of complex and changing needs. There are a significant proportion of tenants whose high support needs, poor housing management awareness and lack of practical skills, mean that there is a requirement for a much more enhanced housing management provision to ensure that the tenants can sustain their tenancy whilst at the same time ensure that the landlord is providing reasonable and adequate accommodation for all tenants”
Please contact Michael Patterson if you’d like help with Exempt Accommodation, Specified Accommodation and enhanced Housing Benefit.
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