Social Policy Bulletin January 2011
New Regulations for Sale and Rent Back Schemes
In July 2010 we wrote of the problems with sale and rent back companies. For example, clients being put under pressure to sign contracts with these companies and then finding these were short term contracts and they were being forced out of their property.
A sale and rent back agreement is where a company offers to buy a person’s home, usually at a discounted price, and then rents it back to them.
From 30th June 2010, the Financial Services Authority changed the way it regulated the schemes run by private companies.
The new regulations specify:
1. Firms are required to ensure that people are able to afford to enter into agreements and to check to see how this may affect any benefits the person may be getting.
2. Firms are required to provide an independent valuation of a property where the valuer owes a duty of care to the seller.
3. Firms must ensure better security of tenure by providing fixed term tenancies of at least 5 years duration.
4. A 14 day cooling off period must be given to allow people more time to decide whether to accept the offer.
5. Firms are to be stopped from sending promotional leaflets to people’s homes.
Home Repairs Research Project
The Office of Fair Trading (OFT) is looking into problems in the home repairs and improvement market, regarding issues consumers have with traders and bad workmanship. In light of this the OFT approached Citizens Advice to ask if they could provide any evidence of clients’ problems relating to this. One piece of evidence given was from the Gateshead Advice Centre relating to a client who had engaged a builder to convert a garage and room into a bedroom and en-suite bathroom. Everything was agreed verbally and so far the client has paid the builder £6,700 in cash. However a dispute arose over what the agreed price was going to cover E.g. new roof, bathroom fittings etc. The builder now refuses to come back and finish the work. The client cannot afford to get another builder to complete the work and has therefore been left with an incomplete and potentially dangerous extension.
This problem highlights the need to use reputable traders.
Employment and Support Allowance Appeals
In last February’s Bulletin we reported that the Gateshead Advice Centre was seeing a growing number of clients who had failed medical examinations for Employment and Support Allowance (ESA) and were successfully appealing these decisions.
CABx up and down the country, including Gateshead Advice Centre, gathered evidence to send to the Department of Work and Pensions (DWP) to show the increasing number of cases that had to be taken to a tribunal to get the correct result.
As a result of this evidence, the DWP has now admitted that there are too many cases being sent to tribunal unnecessarily. They have decided to reconsider all the ESA decisions which have been appealed and are awaiting hearing dates at the tribunal service. This is a very welcome step and suggests there is to be a serious attempt to rectify this situation.
Work Capability Assessment Review
An independent review of the Work Capability Assessment conducted by Professor Malcolm Harrington has proposed substantial changes to make it a “fairer and more effective tool” to determine whether or not someone is capable of working.
Some of the changes recommended are: that there should be mental health experts present in all assessment centres, that there should be more support for those being assessed, better communication of what the test entails and for tests to be filmed on a pilot basis. The report did not find any evidence that the assessment process was being driven by financial targets.
Prior to the launch of the Work Capability Assessment the Government expected around half of claimants being tested would be declared fit for work, whereas the figures that have been published show that between October 2008 and February 2010, 6% of those tested were found unable to work either now or in the future, 15% were deemed unable to work now but could do so in the future with appropriate help, 39% were deemed fit to work straight away while a further 39% tests had either not been completed or the person had moved off ESA.
Gateshead Advice Centre’s experience is that many of the claimants approaching the Centre who had been deemed fit for work had the decision overturned at tribunal, so we welcome changes in the way these tests are to be carried out.
Gateshead Advice Centre opposes legal aid cuts through “Justice for all” campaign
Plans to slash legal aid will leave many people with nowhere to turn for expert help with urgent and serious problems. Gateshead Advice Centre is worried that many people, particularly those who are vulnerable or on low incomes, will be cut off from free, accessible advice and help on legal problems involving important family issues, welfare benefits, employment, housing, education and debt as a result of the Government’s proposals to cut legal aid by £350 million.
If the plans go ahead, most of the areas of law listed above will no longer be covered by legal aid except in very limited circumstances, and people on low incomes will find they are going to have to pay to get the legal advice and representation they need.
These concerns have prompted the Advice Centre to join the ‘Justice for All’ campaign to try to ensure everyone is treated fairly under the law, no matter who they are, how much money they have or where they live. The campaign is a coalition of legal and advice agencies, charities such as Mind, Scope and Kids’ Company, trade unions, community groups and members of the public.
Gateshead Advice Centre manager Libby Hinson said:
“Every year the Advice Centre helps thousands of people at moments of real need and crisis, thanks to funding from civil legal aid. If people can’t access legal help, the consequences can be dire –spiraling debt, homelessness, family breakdown, domestic violence, depression.
Withdrawing legal aid with no alternative on offer will deny access to justice to some of the most vulnerable people in our community, leaving them overwhelmed by problems with nowhere to turn.
What’s more, this really is a false economy. The entire legal aid budget is equivalent to only two weeks’ worth of public funding to the NHS. Yet the savings to the tax payer are on a scale of up £10 to every pound put in. If people get legal advice early enough it can save costs to other public services further down the line.”
Typical examples of clients who the Advice Centre has helped include:
A client struggling financially, who has a learning difficulty, is illiterate and was having problems obtaining housing. With the Advice Centre’s help he secured a home, care and support to assist him to maintain the property and was awarded Disability Living Allowance to increase his income.
A social housing tenant and young single mother who had fallen behind with rent payments. This was due to a relationship breakdown and mental illness while pregnant, which forced her to take time off work. She had tried to claim benefits, but her inexperience of the benefits system and the difficulty she had managing her affairs as a result of her illness and the stress she was under, her claims were refused. She was being charged full rent while living on Crisis Loans from the Department of Work and Pensions. The Advice Centre helped her obtain the benefits to which she was entitled, which reduced the rent arrears that had built up. This ensured she could keep her home and had money to live on. As a result, her mental health has also significantly improved.
To find out more, or to join the campaign, visit – www.justice-for-all.org.uk
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