LHA and Post Office Accounts

[Esio Trot]

We have a long-term tenant of mature years who has recently moved to ground floor accommodation within the same building as stairs are becoming difficult.

He now comes under the direct payment LHA rules, which he is most unhappy about.

He has a post office account, but has been told by our local council that they can't pay it into this, and he will have to open a bank account.

He finds reading and writing difficult, yet the local council have decided that this is insufficient reason for us being paid direct.

Now, he has a post office account. I thought this government were meant to be supporting the post office network where possible - and I just can't see why the local office are saying this. I don't know too much about post office accounts. Does anyone know why this account can't be used for LHA payments?

[jeffrey]

Post Office does not offer its own accounts and has not done so for about 30yrs.
PO does offer:
a. ex-National Girobank/Alliance and Leicester accounts (now Santander); and
b. ex-Bristol & West accounts (now Bank of Ireland).

These are all 'clearing bank' accounts, capable of receiving incoming Direct Funds Transfers (BACS, CHAPS, etc.)

[Emma1973]

Unfortunatly it is the case that it cannot be paid into a PO account, HB and LHA are paid by BACS (Bank Automated Clearing System) which the PO accounts do not accept, now would he then be able to pay you by Standing Order as the PO accounts dont do these either.

The only way is by opening a bank account, CAB can help with opening these.

[susanne]

i have started to open joint accounts with LHA tenants with me holding the account control (but tenants name has to come first on the account). Halifax do a "pass book" account and i hold the pass book so i take the rent when it comes in and send the tenant a rental statement

[tom999]

Hi Esio,

I know a LL who deals specifically with HB/LHA tenants, and he uses a system where HB/LHA gets paid to tenant. Local authority uses this system as well.

Tenant need to open a specific type of account (for HB only) with a credit union. Its a basic account that has no attached credit/debit cards, and does not allow withdrawals. LL also has an account at the same credit union; a rule is set up, so as soon as funds hit the tenant's account, they are transferred automatically to LL's account, i.e. same day.

[jeffrey]

But that rule is merely a standing order, revocable by T on demand.

[tom999]

This bank account (with v. limited access) is to be used exclusively for rent collection - if monies go awol, it's 'intentional', i.e. T has made the effort to visit the branch & queue up to access the cash (or cancel SO).

So, if issuing a notice (e.g. S8) or applying for direct payments from LA if T gets into arrears, LL has proof of intentional non-payment.

Also, T is liable for HB/LHA clawbacks and not LL as T got HB/LHA, so if a fraudulent claim took place and T gets issued with a 6 month clawback, LL can evict and worst loss for LL is period between when they stop paying LL and the successful possession order (2 months max).

I know an LA that run a lot of their tenancies like this.

[Esio Trot]

Hi Esio,

I know a LL who deals specifically with HB/LHA tenants, and he uses a system where HB/LHA gets paid to tenant. Local authority uses this system as well.

Tenant need to open a specific type of account (for HB only) with a credit union. Its a basic account that has no attached credit/debit cards, and does not allow withdrawals. LL also has an account at the same credit union; a rule is set up, so as soon as funds hit the tenant's account, they are transferred automatically to LL's account, i.e. same day.

A most interesting suggestion.

All I need to do now is find a credit union in our locality - we did have a big one, but one of the main bods ran off with all the money and it folded.

[jeffrey]

Would that have been the Bernard Madoff DisCredited Union?

[tom999]

A most interesting suggestion.

All I need to do now is find a credit union in our locality - we did have a big one, but one of the main bods ran off with all the money and it folded.

You could try here (http://www.bedfordcreditunion.org.uk/) :)

Credit unions are interesting, they are not-for-profit organisations, and "provide an alternative service to the high street banks and the doorstep lenders. Often those on low incomes are dependent on "loan sharks" and high interest lenders."

Their loan rates are good too: "The interest charged on a loan is 1% per month, ...e.g. for a loan of £100 over 12 months the interest would only be £6.50p (APR 12.68%)" !

[havensRus]

All I need to do now is find a credit union in our locality

You could also try the association of british credit unions at http://www.abcul.org/page/index.cfm for a nationwide search.

[havensRus]

This CU offers the service http://www.onesuffolk.co.uk/rsacul but only for tenants who live in the East anglian area that they cover. I am in the process of opening accounts for some tenants.

[citizenz]

I am not sure but I would expect that if the tenant was the lead name on the joint account, they would just be able to proclaim the pass book as lost and get another one issued, changing the address on the account along the way.