Understanding the Bill Payment Market Place and the Services and Products on offer
The Welfare Reform Act passed through Parliament in March 2012, it will bring about some of the biggest changes the housing sector has ever experienced. For NHC members the majority of their business income derives from tenants rents, under the welfare reform proposals the introduction of Universal Credit and Direct Payments is one of the key concerns and challenges for social housing providers.
The reforms aim to make the welfare system fairer and ensure people in the UK are better off when in employment than they would be claiming benefits. It also seeks to provide support for the 900,000 or so adults and children currently living under the bread line in the UK.
The introduction of the Universal Credit and Direct Payment which comes in from October 2013 will radically change the housing benefit system, which currently sees a significant proportion of this benefit paid directly to social landlords. From October 2013 social housing tenants will receive their benefits directly on a monthly rather than weekly basis, and tenants will be expected to pay their rent directly themselves to their landlord. Landlords are hugely concerned around the impact on their rental income and the increase in arrears they will have, in addition to tenants ability to manage and budget their finances on a monthly basis, and the potential increase in personal debt problems and money management.
The Northern Housing Consortium has prepared a paper to explore some of the detail behind Universal Credit, what this means for NHC members and their tenants, what the sector is doing in preparation for the introduction of Universal Credit and what members need to be aware of when looking at the different options around bill payment services.
Universal Credit: tackling reform through collaboration
allpay and the Northern Housing Consortium (NHC) continue to work closely together to provide the most comprehensive selection of payment services for consortium members, whilst saving them time and money.
As a recommended payment solutions provider on the NHC framework, allpay is focused on delivering economies of scale and value for money and recognises the challenges the new Universal Credit system presents councils and social landlords. More than 3.5m individuals regularly pay their bills using allpay’s services. Many more will need to take responsibility for paying their own rent as a result of Universal Credit.
As the experts in public sector payments, allpay plans to help overcome the challenges by enhancing and developing services that will help landlords protect their rental income and ensure tenants sustain their tenancies.
It’s already the bill payment provider for all of the housing associations involved in the Government’s direct payment demonstration projects which aim to garner best practice information before Universal Credit goes live next October.
allpay already has a number of off-the-shelf solutions to help landlords mitigate the risks of Universal Credit, and has recently launched the allpay app which is a simple and effective way for tenants to pay their rent on the move.
In addition, the company’s Direct Debit (DD) service – which allows DDs to be set up for every date of the month – is the most efficient, cost-effective and convenient way to collect regularly occurring payments from a large number of customers.
For those who don’t have a bank account, an allpay Prepaid MasterCard® Card can receive the household benefits paid directly on to it and can then be used for the rent to pay the landlord – as well as other household bills. This card can be used to receive income from work or benefits; it is available to all (irrespective of credit rating) and can be used by people even after they have moved off Universal Credit.
The company is also investing in further solutions and is working with the DWP and its clients to provide a credible alternative to basic bank accounts and credit union accounts to help individuals budget as well as protect landlords’ income.
With more than 70% of all social landlords as clients, allpay is committed to providing first class support throughout the changes.
solutions@consortiumprocurement.org.uk
Useful information:
Many members are starting to look at the different options available to their tenants to assist them in managing their money and budgeting in light of welfare reform, here is an example across Manchester.
The Northern Housing Consortium are working closely with this group of housing providers and ABCUL to explore the bill payment market, and opportunities for housing providers and credit unions to work together.
