The Income-related Benefits (Subsidy to Authorities) Amendment Order 2015

EXPLANATORY NOTE

(This note is not part of the Order)

This Order amends the Income-related Benefits (Subsidy to Authorities) Order 1998 (S.I. 1998/562) (“the 1998 Order”) which provides for the calculation and payment of housing benefit subsidy to local authorities in England, Wales and Scotland who administer those benefits. Section 140F(2) of the Social Security Administration Act 1992 (c.5) authorises the making, revocation or varying of an Order before, during or after the year to which it relates.

Article 2(2) and (3) have effect for the purpose of determining subsidy payable for the year beginning with 1st April 2014 and any subsequent year beginning with 1st April. Article 2(2) substitutes article 12(1) of the 1998 Order with a new paragraph (1) which sets out how the amount of an authority’s subsidy for the relevant year is to be calculated. In particular, it allows for additional payments of subsidy to be made in certain circumstances to local authorities who participate in the Fraud and Error Reduction Incentive Scheme (“FERIS”), as notified by the Secretary of State to local authorities on 24th November 2014. Article 2(3) makes a consequential change to article 13(1) of the 1998 Order.

Participating authorities are given funding to carry out activities with a view to reducing fraud and error in relation to the payment of housing benefit. The Secretary of State then sets a threshold for expected performance in reducing fraud and error in a specified period for each such authority based on the authority’s performance in making such reductions in a previous equivalent period. Additional payments are then made to the authority, the amounts depending on the extent to which the authority exceeds the threshold for reducing housing benefit payments in each such period by virtue of those activities. Provision is also made for a further additional payment to be made to the authority based on performance in reducing housing benefit payments over the entire course of the scheme.

New Schedule 1A to the 1998 Order, which is inserted by article 2(5) and set out in Schedule 2 to this Order, sets out how the additional payments of subsidy in respect of FERIS are to be calculated.

Hard copies of the circulars explaining FERIS and the amounts of the administration subsidy on which payments are based are available from the Department for Work and Pensions, Caxton House, Tothill Street, London SW1H 9NA.

Article 2(4) sets out new figures to be used in the calculation of subsidy payable to an authority for the year beginning with 1st April 2014 by substituting Schedule 1 to the 1998 Order with Schedule 1 to this Order.

Article 3 has effect for the purpose of determining subsidy payable for the year beginning with 1st April 2014 and any subsequent year beginning with 1st April. It inserts new paragraphs (6ZB), (6ZC) and (6ZD) into article 18 of the 1998 Order which provide that where a local authority receives real time information in respect of an overpayment and makes a revision or supersession decision within 4 weeks (subject to extension where further information is required), that overpayment will not be treated as an authority error overpayment or administrative delay overpayment for the purposes of calculating additional amounts of subsidy payable to an authority.

Article 4 has effect for the purpose of determining subsidy payable for the year beginning with 1st April 2015. Article 4(2)(a) amends paragraph 3 of Schedule 4A to provide that the rebate proportion figure for 2015/2016 is 0.746. Article 4(2)(b) substitutes Part 3 of Schedule 4A to the 1998 Order in respect of weekly rent limits for authorities in England. With respect to authorities in Wales, article 4(2)(c) substitutes Part 5 of Schedule 4A to the 1998 Order which sets out the specified amount “O” and the guideline rent increase “P” used when calculating deductions from subsidy under paragraph 4 in Part 4 of that Schedule.

Article 5 removes references to community charge benefit from the 1998 Order which are now obsolete as it was replaced by council tax benefit in 1993.

An impact assessment has not been produced for this instrument as it has no impact on business or civil society organisations.