The Income-related Benefits (Subsidy to Authorities) Amendment Order 2018

Made: 6th September 2018

Laid before Parliament: 10th September 2018

Coming into force: 15th October 2018

In accordance with section 176(1) of that Act[^f00003], the Secretary of State has consulted with organisations appearing to the Secretary of State to be representative of the authorities concerned.

Citation, commencement and interpretation

1

• (1) This Order may be cited as the Income-related Benefits (Subsidy to Authorities) Amendment Order 2018 and comes into force on 15th October 2018.

• (2) Article 3(2) and Schedule 1 have effect for the purpose of determining subsidy payable for the relevant year beginning with 1st April 2017.

• (3) Articles 3(1)(a) and (3) and 4 and Schedules 2, 3 and 4 have effect for the purpose of determining subsidy payable for the relevant year beginning with 1st April 2018.

• (4) Articles 3(1)(b) and (4) and 5 have effect from 1st April 2018.

• (5) In this Order—

• “the 1998 Order” means he Income-related Benefits (Subsidy to Authorities) Order 1998[^f00004];

• “relevant year” means the period of a year beginning on 1st April in the calendar year in respect of which a claim for subsidy is made.

Amendment of the 1998 Order

2

The 1998 Order is amended in accordance with articles 3 to 5.

The amount of an authority’s subsidy

3

• (1) In article 12(1) (amount of subsidy)[^f00005]—

• (a) after sub-paragraph (b), insert—

(bza) the additional amount specified by Schedule 1ZB (additional amount of subsidy: verify earnings and pension alerts service); and

• (b) omit sub-paragraph (ba)[^f00006] and the “and” immediately after it.

• (2) For Schedule 1 (sums to be used in the calculation of subsidy)[^f00007] substitute the Schedule 1 set out in Schedule 1 to this Order.

• (3) After the substituted Schedule 1 insert the Schedule 1ZB set out in Schedule 2 to this Order.

• (4) Omit Schedule 1ZA (additional amount of subsidy: right benefit initiative)[^f00008].

Rent rebate deductions from an authority’s subsidy

4

• (1) Schedule 4A (rent rebate limitation deductions (housing revenue account dwellings))[^f00009] is amended as follows.

• (2) In Part 2 (England), in paragraph 3 (amount of deduction), for sub-paragraph (3)[^f00010] substitute—

(3) The rebate proportion for 2018-19 is 0.756.

• (3) For Part 3 (weekly rent limits for purposes of Part 2: authorities in England)[^f00011], substitute the Part 3 set out in Schedule 3 to this Order.

• (4) For Part 5 (amounts for purposes of Part 4, paragraph 4: authorities in Wales)[^f00012], substitute the Part 5 set out in Schedule 4 to this Order.

Subsidy claims made by authorities in England

5

• (1) In article 2 (interpretation of Parts 2 and 4), insert in the appropriate places the following definitions—

• “HBAP” means the Housing Benefit Assurance Process published by the Department for Work and Pensions on 29th March 2017 and last updated on 27th March 2018[^f00013];

• “report of factual findings” means the report completed by the reporting accountant in accordance with HBAP setting out the details of, and the relevant matters arising from, the test;

• “test” means a test of the claim for final subsidy by the authority and the reporting accountant in accordance with HBAP and “tested” shall be construed accordingly.

• (2) In article 3A (electronic communications)[^f00014], in paragraph (1)—

• (a) for “or auditor” substitute “a reporting accountant or an auditor”

• (b) after “claim,” insert “test,”.

• (3) In article 4 (requirement of claim)[^f00015], in paragraph (3), for the words from “the authority’s auditor” to the end of the paragraph substitute—

— (a) in the case of an authority in England, the authority’s reporting accountant; (b) in the case of an authority in Wales or Scotland, the authority’s auditor, by 30th April in the following year

• (4) In article 5 (requirement to keep records and provide information)[^f00016], in paragraph (2)—

• (a) before sub-paragraph (a) insert—

(za) in relation to an authority in England, the claim is in accordance with the report of factual findings and with the relevant articles of this Order;

• (b) at the beginning of sub-paragraph (a) insert “in relation to an authority in Wales or Scotland,”.

• (5) After article 5 insert—

(5A) (1) In relation to an authority in England and subject to article 9(4), the third condition is that the authority shall— (a) inform the Secretary of State in writing of the identity of the authority’s reporting accountant by 1st March in the year before the relevant year; (b) procure the test of the final claim by the reporting accountant; (c) send the report of factual findings to the Secretary of State by 30th November in the year after the relevant year; and (d) comply with the following provisions of this article. (2) The authority shall— (a) provide such information in written or electronic form; (b) keep, and where asked to do so, produce records in written or electronic form with a bearing on its claim, as may be required by the reporting accountant to enable the reporting accountant to test the claim and to complete the report of factual findings. (3) Where the authority does not inform the Secretary of State in writing of the identity of its reporting accountant by 1st March in the year before the relevant year, the Secretary of State may withhold payment of subsidy until the authority— (a) informs the Secretary of State in writing of the identity of its reporting accountant; or (b) provides reasons for the delay which the Secretary of State regards as satisfactory. (4) No final subsidy shall be paid until— (a) the authority’s reporting accountant has confirmed in writing that the claim has been tested; and (b) the Secretary of State has received the report of factual findings.

• (6) In article 6 (requirement of audit)[^f00017]—

• (a) at the end of the heading insert “: authorities in Wales and Scotland”;

• (b) in paragraph (1)—

• (i) at the beginning insert “In relation to an authority in Wales or Scotland, and”;

• (ii) omit sub-paragraphs (iza) and (ia).

• (7) In article 8A (payment of subsidy before audit complete)[^f00018]—

• (a) before “audit”, in each place where that word occurs (including the heading), insert “test or”;

• (b) in paragraph (1), after “yet been” insert “tested in accordance with article 5A or”.

• (8) In article 9 (payment of subsidy for the relevant year)—

• (a) in paragraph (1)—

• (i) after sub-paragraph (a) insert—

(aa) in the case of an authority in England, the report of factual findings has been properly completed;

• (ii) at the beginning of sub-paragraph (b) insert “in the case of an authority in Wales or Scotland,”;

• (b) in paragraph (3), after “occurred” insert “or, as the case may be, once the report of factual findings has been sent to the Secretary of State”.

• (9) In Schedule 6 (electronic communications)[^f00019]—

• (a) in paragraph 2, after “An authority”, in each place where those words occur, insert “, reporting accountant”;

• (b) in paragraph 3(b), after “authorities” insert “, reporting accountants”.

SCHEDULE 1 — Schedule to be substituted for Schedule 1 to the 1998 Order

SCHEDULE 2 — New Schedule 1ZB to 1998 Order

SCHEDULE 3 — Substitution of Part 3 of Schedule 4A to the 1998 Order

SCHEDULE 4 — Substitution of Part 5 of Schedule 4A to the 1998 Order

Signed

Signed by authority of the Secretary of State for Work and Pensions

Justin Tomlinson — Parliamentary Under-Secretary of State, — Department for Work and Pensions — 6th September 2018

We consent.

Paul Maynard — Craig Whittaker — Two of the Lords Commissioners of Her Majesty’s Treasury — 6th September 2018

Explanatory note

(This note is not part of the Order)

EXPLANATORY NOTE

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 which administer housing benefit. 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 3 (2) substitutes Schedule 1 to the 1998 Order with a new Schedule 1 prescribing the sums to be used in the calculation of subsidy for the year beginning 1st April 2017.

Article 3 (1)(a) and (3) and Schedule 2 insert a new Schedule 1ZB which has effect for the purposes of determining additional amounts of subsidy payable for the year beginning with 1st April 2018. In particular, the new Schedule prescribes a system for the making of additional payments of subsidy to authorities administering alerts relating to the earnings and pension entitlement of claimants for housing benefit (“the VEP alert Service”), as notified by the Secretary of State to local authorities on 2nd May 2018.

In the VEP Alert Service, authorities are given funding to carry out activities to enable them to verify earnings and pension information based on their use of real time information. Some or all of the funding may be recovered if the Secretary of State is satisfied that the funding is not being used in connection with those activities. The amendments at article 3(1)(b) and (4) revoke provisions relating to the previous incentive scheme.

Article 4 has effect for the purposes of determining subsidy payable for the year beginning with 1st April 2018. Paragraph (2) amends paragraph 3 of Schedule 4A to provide that the rebate proportion figure for 2018/2019 is 0.756. Paragraph (3) 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, paragraph (4) 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.

The amendments in article 5 reflect new arrangements when local authorities in England claim final subsidy. Those authorities must firstly notify the Secretary of State of the identity of their reporting accountant who must test the claim in accordance with the Housing Benefit Assurance Process (set out on the Department for Work and Pensions website) alongside the authority for compliance with the provisions of the 1998 Order. The reporting accountant must then complete a report of factual findings on the claim which must be submitted the Secretary of State. Article 5 also makes amendments consequential on the new process.

Hard copies of the circulars and guidance referenced in this Order are available from the Department for Work and Pensions, Business Finance and Housing Delivery Directorate, Housing Delivery Division, Room 2.2.R, Peel Park, Blackpool FY4 5ES.

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

Footnotes

[^f00001]: 1992 c.5. Sections 140B, 140C and 140F were inserted by section 121 of, paragraph 4 of Schedule 12 to the Housing Act 1996 (c.52). Section 140B was amended by sections 10 and 22 of, and paragraph 7 of Schedule 1 and Schedule 2 to, the Social Security Administration (Fraud) Act 1997 (c.47) (“the Fraud Act”). Section 189(1) and (4) was amended by paragraph 109 of Schedule 7 to the Social Security Act 1998 (c.14). Section 189(4) was amended by S.I. 2013/252. Section 189(7) was amended by section 103 of, and paragraph 24 of Schedule 9 to, the Local Government Finance Act 1992 (c.14) and paragraph 10 of Schedule 1 to the Fraud Act. Sections 140B, 140F and 189 were repealed, to the extent they relate to council tax benefit, by section 147 of, and paragraph 1 of Schedule 14 to, the Welfare Reform Act 2012 (c.5) with effect from 1st April 2013 and subject to savings and transitional provisions in articles 9 and 10 of S.I. 2013/358.

[^f00002]: Section 189(8) was amended by section 123 of, and paragraph 3(5) of Schedule 13 to, the Housing Act 1996, section 33 of, and paragraph 10 of Schedule 3, and Schedule 4 to, the Social Security (Recovery of Benefits) Act 1997 (c.27), section 51 of, and paragraph 3 of Schedule 4 to, the Tax Credits Act 2002 (c.21), section 5(2) of, and paragraph 29 of Schedule 1 to, the Pensions Act 2007 (c.22) and section 2 of, and paragraph 57(1) and (3) of Schedule 3 to, the Social Security Contributions (Transfer of Functions, etc) Act 1999 (c. 2).

[^f00003]: Section 176(1) was amended by section 123 of, and paragraph 3(4) of Schedule 13 to, the Housing Act 1996 and section 69(6) of the Child Support, Pensions and Social Security Act 2000 (c.19). It was repealed, to the extent it relates to council tax benefit, by section 147 of, and paragraph 1 of Schedule 14 to, the Welfare Reform Act 2012 with effect from 1st April 2013 and subject to savings and transitional provisions in articles 9 and 10 of S.I. 2013/358.

[^f00004]: S.I. 1998/562.

[^f00005]: Article 12(1) was substituted by S.I. 2015/1784.

[^f00006]: Article 12(1)(ba) was inserted by S.I. 2017/900.

[^f00007]: Schedule 1 was substituted by S.I. 2017/900.

[^f00008]: Schedule 1ZA was inserted by S.I. 2017/900.

[^f00009]: Schedule 4A was inserted by S.I. 2004/646.

[^f00010]: Paragraph 3(3) was substituted by S.I. 2017/900.

[^f00011]: Part 3 of Schedule 4A was substituted by S.I. 2017/900.

[^f00012]: Part 5 of Schedule 4A was substituted by S.I. 2017/900.

[^f00014]: Article 3A was inserted by S.I. 2007/26.

[^f00015]: Article 4(3) was amended by S.I. 2007/26 and 2014/1667.

[^f00016]: Article 5 was substituted by S.I. 1998/2865 and amended by S.I. 2007/26.

[^f00017]: Article 6 was amended by S.I. 2004/646, 2007/26, 2009/30 and 2017/900.

[^f00018]: Article 8A was inserted by S.I. 2006/54.

[^f00019]: Schedule 6 was substituted by S.I. 2007/26.