UC Housing Costs Element: Service Charges

DanielDeronda

I have been on Universal Credit since March 2018 & I am a leaseholder of a 1 bedroom flat (I own it outright), so I have no mortgage to pay back.  I do though have to pay service charges for the general upkeep of the building, the gardens & to pay for any maintenance projects that may arise.

As part of my UC allowance, I fully receive my service charges so I can pay the managing agent & I'm currently up to date with payments.

However, very recently (for my April 2021 payment), my payment was declined.  I have been told the following via my case manager

"**The claimants service charges are being paid in error - service charges for owner occupiers are subject to the same waiting period as Support for Mortgage Interest"

I had this mentioned to me by Citizens Advice a couple of weeks ago, but I didn't take any notice of this, as my claim for service charges has been current for nearly 3 years & is not a new claim.  However, DWP are withholding payment but I am querying this with my case manager.

Am I right to be worried that I will not continue to receive my service charge payments?  If this happens, I'm very likely to go into arrears very quickly & worst case scenario is that I have to sell my property, as it is my biggest outgoing per month bar food.

I thought the 9 month qualifying period was for Support for Mortgage Interest, and not for support for Housing Costs as well.  The Support for Mortgage Interest is a loan that has to be paid back.  As I mentioned above, I don't have an outstanding mortgage, as I own my property.

Please can anyone advise how best I can move forward to get this situation resolved? as I am very worried that I will lose the service charge support I currently get. 

NedS

That is correct. If you own your own property, you are not eligible for help with housing costs including service charges. You would potentially be entitled to SMI after 9 months, but this is a repayable loan.

If they have paid you housing costs (service charges) incorrectly, they are entitled to recover these as an overpayment.

DanielDeronda

When did this change?  I've been claiming & receiving Universal Credit - Housing Costs since 2018.  If they are saying they've paid me my serrvice charges in error, it will be thousands of £ that I might have to pay back.

I'm not going to get SMI as I own my property outright, so there is no outstanding mortgage.

Nothing was posted in my journal (or I never received any letters) saying that I had been paid my service charges in error, only until I raised it yesterday that my latest UC payment had been withheld.

This will potentially put me in a lot of trouble financially, maybe even leading to me having to sell my property.

Rubyroobs

I'm surprised 3 years has gone by without them noticing. Surely this must be an error on their part. i would challenge it if they try to reclaim money already paid. 

calcotti

NedS said:

That is correct. If you own your own property, you are not eligible for help with housing costs including service charges. You would potentially be entitled to SMI after 9 months, but this is a repayable loan.

If they have paid you housing costs (service charges) incorrectly, they are entitled to recover these as an overpayment.

That isn't correct. A homeowner with or without a mortgage is eligible for the housing element in respect of service charges. 
Refer to https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/864905/admf4.pdf

There are restrictions
No housing element will be included if there is any earned income.
There is, as for SMI, a nine month qualifying period and there is  further nine month wait for further housing cost element if payment is interrupted for any reason (such as an AP which includes earnings). The rules around earnings are particularly absurd in my opinion.

OP, this means that if you were paid housing element from the start of your claim this was incorrect and you have been overpaid.

Do you have any earnings?

Assuming you are not excluded from receiving help due to earnings I think DWP are wrong to stop including the housing element. They should continue to include but advise you of an overpayment for the first nine months which will then be recovered by deduction from future payments (at a rate of 25% of your standard allowance).

poppy12345

Rubyroobs said:

I'm surprised 3 years has gone by without them noticing. Surely this must be an error on their part. i would challenge it if they try to reclaim money already paid. 

It's my understanding that all overpayments are recoverable, including those that are caused through DWP's error.

DanielDeronda

I have received no earnings in any assessment period since my UC claim started in 2018.

I knew that SMI had a 9 month qualifying period, but not for the housing cost element of UC, has this changed recently?

9 months of service charges would be over £1k & I've already got a repayment plan for an overpayment in 2018 relating to JSA.

I'll wait to see what the case manager has to say before deciding what my next course of action is.  

maisie_cat

It makes sense that service charge on leasehold property is not included in housing costs. Surely a claimant owning a freehold property without mortgage would not get help with buildings insurance, maintenance, gardening etc specifically and service charge is simply all of these.

calcotti

DanielDeronda said: I knew that SMI had a 9 month qualifying period, but not for the housing cost element of UC, has this changed recently?  

I believe it’s been like that since the start.

calcotti

maisie_cat said:

It makes sense that service charge on leasehold property is not included in housing costs. Surely a claimant owning a freehold property without mortgage would not get help with buildings insurance, maintenance, gardening etc specifically and service charge is simply all of these.

As already advised owner occupiers can receive housing element for allowable service charges in their UC after a nine month wait without earnings.

Allowable service charges are fully detailed here
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/969171/admf2.pdf

NedS

calcotti said:

NedS said:

That is correct. If you own your own property, you are not eligible for help with housing costs including service charges. You would potentially be entitled to SMI after 9 months, but this is a repayable loan.

If they have paid you housing costs (service charges) incorrectly, they are entitled to recover these as an overpayment.

That isn't correct. A homeowner with or without a mortgage is eligible for the housing element in respect of service charges. 
Refer to https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/864905/admf4.pdf

There are restrictions
No housing element will be included if there is any earned income.
There is, as for SMI, a nine month qualifying period and there is  further nine month wait for further housing cost element if payment is interrupted for any reason (such as an AP which includes earnings). The rules around earnings are particularly absurd in my opinion.

Thank you - learn something new every day!