Sinking fund and Universal Credit

Puppy29

Hi,

I currently receive Universal Credit, which has always covered my full service charges in the past. However, this year, my housing provider reported a reduced amount to UC, excluding £33.33 for something called a "sinking fund," which they said UC does not cover.

When I contacted my housing provider about this deduction, they explained that the sinking fund is not eligible for UC coverage. UC said that the decision was up to the housing provider and not related to UC policy.

For the past three years, UC has included the sinking fund in the service charges they covered, and I have statements to support this.

Can anyone clarify if the sinking fund should be considered part of the service charges by my housing provider?

Many thanks.

maisie_cat

Because the sinking fund is essentially a savings fund for yet to be identified but nevertheless expensive items it's not actually a service charge.
A freeholder will have to fund those sort of repairs from their net benefits so it's probably a way of treating leaseholders and freeholders the same.

huckster

Sinking fund is not an eligible service charge for UC.

If your Housing Association has previously included the sinking fund within service charges reported to UC, as UC relies on information from the HA, then it is an error by the HA. I doubt UC would look to recover previous Housing overpayment.

I know that UC does provide a list of eligible service charges to HA's and I suspect they have picked up the sinking fund error this year, so have applied correction.

Puppy29

Thank you for getting back to me huckster and maisie_cat.

Just to check, does this apply to shared ownership properties as well?

huckster

Yes. Same rules regarding service charges applies to shared ownership