Income and Debt Recovery Policy

Read our income and debt recovery policy.

Document Author Victoria Curry, Income and Financial Inclusion Manager
Document Owner Kelly Webb, Director of Customers
Legal Advice N/A
Consultation Consultation has taken place with customers 
Approved by Place Committee – 6 December 2023
Review Date October 2026
Corporate Plan Aim  Prosperity
Equality Analysis

A full Equality Impact Assessment was undertaken with the following point to note.

 

While this policy may have a slightly larger effect on protected groups particularly on elderly & disabled people there are a lot of elements of the policy to help people and assist them in gaining financial aid or welfare.

The points in section 5 relating to both the Financial Inclusion team at One Manchester providing help to people facing difficulties as well as the point that we will work with the local council and the DWP to both help people acquire welfare benefits and help them with potential appeals if they have been denied or at risk of losing their welfare benefits are both points that will help people in having some ability to deal with any financial difficulties the collecting of income or recovery of debts may impose on them.
Key changes made

EQIA completed

Additional support consideration section update

Reasonable Adjustment Policy added

  1. Policy purpose

    1. 1.1 One Manchester (OM) aims to implement a fair and transparent approach to income collection and debt reduction without compromising customer care through a combination of:
      1. Prevention - implementing preventative measures that help to minimise the risk of debt occurring
      2. Additional Support Consideration – Identified additional support needs are taken into account during the escalation process and managed in line with our Reasonable Adjustment and Inclusive Access policies
      3. Early Intervention – that will ensure that there are a range of effective intervention measures available to address debt issues
      4. Enforcement - to effectively utilise the range of enforcement powers available
    2. OM aims to assist customers to ensure they receive their maximum and correct entitlement to state benefits. Customers will also be encouraged to communicate with OM especially when difficulties arise. If applicable, customers may be given welfare benefits advice and referred to our specialist Financial Inclusion Team. We will also take into account known support needs and refer to appropriate agencies if customers require additional support.
    3.  We will ensure that any applicable legislative and welfare benefit changes are reviewed and the impact on customers is considered. The ongoing impact of Universal Credit (UC) will be closely monitored assessing both organisational and customer impact.
    4. This Policy will reflect good practice and meets legal and regulatory requirements. We will continually monitor good practice and statutory and regulatory requirements.
    5. This Policy is in place to ensure to maximise rent and service charge collection to help sustain customers in their tenancies.
    6. Our procedures will take account of the Pre-Action Protocol for Possession Claim for rent arrears , the Pre-Action Protocol for Debt (issued under the Civil Procedure Rules)  and Debt Respite Scheme.

  2. Policy Scope

    1. This Policy relates to income collection and debt recovery from OM customers and includes:  
      1. • Rent and/or service charges from current customers of all tenures including leaseholders and garages
      2. Rent and/or service charges from former tenants
      3. Rent and/or service charges from commercial tenures that include market rent, rent to buy, shared ownership and properties managed on behalf of other landlords
      4. Rechargeable costs
      5. Sundry debt including court costs

  3. Policy Statement

    1. One Manchester (OM) aims to have a high performing income management and debt collection service which will be delivered to maximise income and benefits for customers. It will promote a payment culture, preventing homelessness and contributing to achieving sustainable tenancies and communities.
    2. One Manchester is committed to treating all customers fairly whilst at the same time reminding them of their responsibility to pay rent and/or service charges, sundry debt including but not limited to recharges, former tenancy arrears and court costs. Whilst a serious view is taken of outstanding debt, it is recognised that some customers are financially or otherwise disadvantaged and therefore, a preventative and supportive approach will be adopted.
    3. 3.3 Effective management of this policy will be monitored via the corporate KPI’s of Cash Collection and Arrears Percentage, shared monthly with Leadership Team. 
  4. Our Approach
    1. Our approach to income collection and debt recovery is a combination of prevention, consideration of support needs, early intervention and enforcement. Our specific approach for each element is outlined in Table 1: One Manchester's approach to prevention, early intervention and enforcement
    2. One Manchester will pursue debts owed by current, former tenants and leaseholders as part of its income recovery approach.  Where there is only one debt outstanding, then the group will follow the relevant collection procedure pursuant to that debt. 

      Priority of multiple debts
       
    3. On the occasion where there are multiple debts owed to the One Manchester by a customer, then we will pursue the debt in line with the following priority order:
      1. Current rent and service charge arrears 
      2. Current commercial rent and service charge arrears
      3. Current Leaseholder and ground arrears
      4. Current garage arrears
      5. Former tenant debt
      6. Former leaseholder and ground rent debt 
      7. Former garage debt
      8. Rechargeable repair debt
      9. Sundry debt including court costs
    4. One Manchester will ensure that customers and colleagues are aware of the debt priority order and approach adopted  in recovering these debts.

      Refunds
       
    5. One Manchester will action all overpayments within a reasonable timescale in line with the following:
    6. Overpayments - OM acknowledge that they have a legal obligation to repay any overpayments, which HB/DWP has deemed to be legally recoverable. We also have an obligation to inform the Local Authority(LA) in writing of any change in circumstances of the customer, which may affect their entitlement to benefit.  We will encourage the customer to challenge such overpayments with the LA/ DWP if they considered that the overpayment is not recoverable. Where possible, OM will appeal against the repayment of HB/UC direct from us which, has occurred because of fraud, or due to circumstances OM were unaware of.
    7. Credit Refunds - Should a customer’s account be in credit above the required advance payment as detailed within their tenancy agreement, OM will arrange for a refund to be made within 28 days from the date of application. However before a refund will be approved, we will review the local HB/DWP landlord portal to ascertain if there are any overpayments outstanding. We will also ensure, at this point, that there are no other debt(s) outstanding to OM and will investigate any refund in conjunction with OM Money Laundering Policy. OM will review outstanding credits above £1,000 on a quarterly basis and will process refunds in line with the checks detailed above. 

      Financial Inclusion Team
    8. Research has shown that low income, intermittent work and other financial pressures remain key causes of financial exclusion which can subsequently lead to financial hardship. In recognition of this, OM have a dedicated Financial Inclusion team, who lead on initiatives to tackle financial exclusion. Advice which can be  offered by telephone,  face to face appointments at our community hubs or home visits.
    9. Customers requiring benefit and budgeting advice are referred to The Financial Inclusion Team, ensuring customers can access initial advice within 48 hours, during which emergency payments can also be access via the Thrive Fund. 

  5. Complaints

    1. If a customer is unhappy about a decision in relation to this policy, they should first follow our complaints process. If customers are still not satisfied, they escalate their complaint to the Housing Ombudsman.

  6. Responsibilities

    1. It is recognised that all colleagues have a role to play in safeguarding the income of the business and all colleagues are expected to support the delivery of a high performing debt recovery service as part of their role. 
    2. Where applicable, OM colleagues will receive the appropriate training and support to effectively achieve the objectives of this policy.
    3. The Head Of Neighbourhoods is responsible for ensuring this policy complies with regulatory and legislative requirements.

  7. Equality Impact Assessment

    1. A full Equality Impact Assessment was undertaken with the following point to note.

      While this policy may have a slightly larger effect on protected groups particularly on elderly & disabled people there are a lot of elements of the policy to help people and assist them in gaining financial aid or welfare.

       

      The points in section 5 relating to both the Financial Inclusion team at One Manchester providing help to people facing difficulties as well as the point that we will work with the local council and the DWP to both help people acquire welfare benefits and help them with potential appeals if they have been denied or at risk of losing their welfare benefits are both points that will help people in having some ability to deal with any financial difficulties the collecting of income or recovery of debts may impose on them

  8. Monitoring and Review

    1. Compliance with this policy shall be monitored by the Head of Neighbourhoods. We will review the impact of this policy on customers with protected characteristics.
    2. This policy shall be reviewed every 3 years.
    3. The Income and Financial Inclusion Manager will be responsible for initiating a review of this policy and shall report to the Head of Neighbourhoods and Director of Customers with any recommendations for improvements

  9. Contact Person

    1. 9.1 The  Income and Financial Inclusion Manager has responsibility for the effective delivery of this policy.

  10. ASSOCIATED POLICIES AND DOCUMENTS

    1. Internal documents
      1. Tenancy Management Policy
      2. Safeguarding Adults Policy
      3. Allocations Policy
      4. Inclusive Access Strategy
      5. Reasonable Adjustment Policy
      6. Complaints Policy
    2. External documents
      1. Housing Act 1985
      2. Housing Act 1996
      3. Welfare Reform Act 2012
      4. General Data Protection Regulations 2016
      5. Equality Act 2010
      6. Landlord and Tenant Act 1985
      7. Tenant Involvement and Empowerment Standard
      8. Tenancy Standard
      9. Commonhold and Leasehold Reform Act 2002
      10. Rent Standard
      11. The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020
Table 1: One Manchester's approach to prevention, early intervention and enforcement
Element Approach
Prevention

We will develop a culture of payment pre, during and post tenancy.

We will identify and provide the right level of support for new customers.

At the start of the tenancy we will:

  • Identify the right level of support for new customers
  • Ensure that new customers are aware of their responsibilities for the payment of rent
  • Ensure that new customers know how to pay their rent and access their rent account online.
  • Encourage new customers to use direct-debit as a form of payment
  • Provide appropriate support to those customers claiming benefits for the payment of their rent

We provide a range of accessible and flexible payment methods that are regularly promoted, publicised and reviewed. Such as Direct Debit, recurring card payments, pay by link, rent payment card, online payments via our customer online account, telephone payments via our CRC, Neighbourhoods and Income Teams during opening hours 9:00am - 5:00pm and 24 hour telephone payments via our branded gateway with Alipay.

We aim to achieve maximum Housing Benefit (HB)/housing cost element of Universal Credit take up and accurate assessments and payment of benefit through advice and verification of claims

We will enable customers to manage their rent accounts (and other bills) through the provision of:

  • Our CRC
  • Our Financial Inclusion Service, including affordability and income and expenditure support
  • Annual Tenancy Experience Visits to customers' homes
  • Online access to rent transaction history and payment facility customer information leaflets and newsletters
  • One Manchester's website

We will work closely with the council's benefits section and the Department for Work & Pensions (DWP), providing help and support to customers to claim welfare benefits, request reconsiderations and appeal benefit decisions where appropriate.

We will work collaboratively across the business to ensure effective joint working and information sharing.

We will support customers in applying for and obtaining employment in accordance with our employment and support strategies.
Additional Support Consideration 

Customers are identified with additional support needs via our tenancy application process and tenancy experience visits.  Any identified needs are recorded and adequate amendments to service delivery implemented.

During the escalation procedure income and expenditure assessments completed by the income team with customers, provide opportunity for disclosure of new or previously unidentified support needs. Any such disclosure will be considered as part of the escalation process.

Identified additional support needs will be considered at court approval and warrant approval, with the completion of an Equality Act Checklist submitted to the income and financial inclusion manager as part of the approval procedure.  To ensure that considerations where necessary have been implemented. 

If disadvantaged due to additional support needs not being adequately considered. The escalation procedure will cease to allow any considerations or adjustments to be implemented, enabling the customer to engage with the Income Team.

 
Early Intervention

We will support those who are in arrears and experiencing financial difficulty through offering a referral to our Financial Inclusion Team.

We will make information available to customers on how to pay their rent and what to do if they fall into rent arrears.  

We will set up payment arrangements for arrears after affordability assessments have been set up following analysis of the customer’s financial position. 

We will use income and expenditure assessments when agreeing payment plans with customers experiencing debt. 

We will use personal contact from our Income Collection and Neighbourhood teams to discuss debts with customers to understand special circumstances and any support needs and identify ways OM and our partner agencies can support the customer. 
Enforcement

We will initiate the appropriate legal action without undue delay against customers whose arrears are escalating and are not engaging with us with due consideration to the Court’s Protocol.

We will use income and expenditure assessments when agreeing repayment plans with customers experiencing debt.

We will follow the expectations set out by any form of debt respite scheme (such as breathing space) 

Legal action, above a Notice of Seeking Possession will be sent for approval to the Income and Financial Inclusion Manager.

Applications for evictions will need three stage approval by the Income and Financial Inclusion Manager, Head of Neighbourhoods and the Director of Customers. With customers contacted prior to eviction approval submission via breach of court order letter, eviction warning letter and home visits. Evictions will not be approved without a minimum of three attempts to engage with the customer.