Income Policy

1. Purpose

1.1 This policy outlines mhs homes approach to the collection of income due to us. Effective income collection enables us to provide high-quality housing services to our customers.

1.2 We recognise that debt prevention is more effective than debt recovery. We aim to provide help, support, and guidance to assist our customers in paying their charges in advance, as per their contractual agreements.

1.3 We will adopt a supportive approach when dealing with customers who are unable to meet their payment obligations. 

1.4 mhs homes are committed to taking effective action and using the powers available to us, where we consider they can provide effective remedy.

2. Who does this affect? 

2.1 This policy applies to customers of all tenures living in homes owned or managed by mhs homes, including general needs, sheltered housing, and market rent properties. It also applies to customers in leasehold and shared ownership properties. Where necessary, we may take legal action under the terms of the lease and other relevant legislation.

2.2 The terms “we” and “our” refer to mhs homes unless otherwise stated.

2.3 This policy also applies to properties managed by mhs homes on behalf of Clarion Housing Association and Heart of Medway Housing Association.

3. Legislation and Regulation 

3.1 Relevant legislation includes:

  • Housing Acts 1985, 1988, and 1996 – provides grounds for possession and seeking injunctions

  • Landlord and Tenant Act 1985

  • Landlord and Tenant Act 1985 (as amended), Sections 18–22

  • UK General Data Protection Regulation (UK GDPR) and Data Protection Act 2018

4. Policy Statement

To ensure effective income collection, we will

4.1 Ensure our staff are trained and confident in handling customer queries.

4.2 Promptly notify customers of arrears using a range of contact methods to prevent debt escalation.

4.3 Handle sensitively cases involving the death, long-term or permanent hospitalisation, or imprisonment of a customer.

4.4 Proactively refund credit balances that exceed the amount required by the contract, unless the customer requests otherwise.

4.5 Encourage payment by Direct Debit as the most cost-effective method, while offering alternative payment options where appropriate.

4.6 Provide advice and guidance to help customers maximise their income and meet financial commitments.

4.7 Offer budgeting support where appropriate.

4.8 Signpost customers to external agencies for debt, welfare, housing, and legal advice.

4.9 Follow a staged recovery process and record all communications clearly and accountably:

a) General Needs: Customers in arrears (net of expected Housing Benefit) will be contacted regularly. If a customer is awaiting a benefit claim decision, arrears action may be suspended for up to four weeks.

b) Homeowners: Customers in arrears will be contacted at least monthly. If the property is mortgaged, we may contact the lender to request payment on the customer’s behalf. 

c) Garages: Customers in arrears will be contacted regularly. If arrears exceed four weeks, the licence will be terminated.

4.10 Use Alternative Payment Arrangements to collect Universal Credit housing costs directly from the DWP when customers are in arrears. These arrangements will be reviewed regularly.

4.11 Ensure that eviction, lease forfeiture, or termination of tenure is used only as a last resort when all other preventative measures have failed.

4.12 Except in exceptional circumstances, we will not rehouse, transfer, or allow mutual exchanges (subject to legislative requirements) for customers with rent arrears unless at least 50% of the debt is paid and a repayment arrangement has been maintained for a minimum of six months.

5. Arrangements

5.1 Payment plans will be based on affordability.

5.2 With customer consent, we will complete income and expenditure assessments to ensure affordability.

5.3 Long-term arrangements:

a) General Needs: Repayment plans should not exceed six years unless directed by a court.

b) Homeowners: Repayment terms are limited to 12 months. We reserve the right to charge interest as outlined in the lease.

c) Market Rent: Repayment terms are limited to 12 months. 

d) Garages: Repayment terms are limited to two months.

6. Former Tenants

6.1 We may use tracing agents to locate former customers when it is cost-effective, to refund credits or recover outstanding debts.

6.2 Legal action will be taken to recover former tenant debt where cost-effective. Debts may be written off if recovery costs exceed the debt. 

6.3 Legal action may negatively impact a customer’s credit score.

6.4 Where a former customer offers to repay an outstanding debt, we may accept a percentage (usually no less than 65%) in full and final settlement, rather than entering a long-term repayment plan exceeding six years. 

6.5 If a written-off or written-back account is later queried by the customer, we may reverse the transaction and proceed with refund or recovery.

7. Compliance

7.1 This policy aligns with the requirements of the Rent Standard 2020.

7.2 We will only share information in accordance with the UK GDPR and Data Protection Act 2018. Confidentiality and impartiality will always be maintained.

8. Equality Statement

8.1 This policy applies to all customers living in homes owned or managed by mhs homes. We are committed to ensuring that no person receives less favourable treatment on the grounds of age, disability, gender reassignment, marriage or civil partnership, pregnancy or maternity, religion or belief, race, sex, or sexual orientation.

8.2 This policy will be reviewed in three years’ time or earlier if required by legislation, new significant guidance or in response to specific incidents.