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1. Problems with Energy Suppliers
2. Incapacity Benefit changes
3. Debt Relief Orders
4. New Banking Code
5. Bank Charges - the latest
6. Income Tax Changes
7. Local Housing Allowance
8. Return to Work Credit

1   Problems with Energy Suppliers

On 1st October 2008 Energywatch will merge with Postwatch and the National Consumer Council to form Consumer Focus, the new champion for consumers’ interests.

 In the first instance, any complaints on energy matters should be raised directly with your energy supplier. If you are not satisfied with the response you receive, you may be able to take up your case with the Energy Ombudsman.

However, at the time of publishing this news, details are sketchy and the Consumer Focus website is still ‘under construction’. Energywatch advise that to prepare for their closure on 30th September and to allow information from their website to be migrated to the new Consumer Focus website, Energywatch have now withdrawn their facility for submitting complaints and enquiries online from their website. Up to 30th September, you will still be able to get help from Energywatch by contacting their Helpline: 08459 06 07 08

Their is little information about these changes as yet on the Consumer Direct website.

2  Incapacity benefits

From October 2008, the Employment and Support Allowance will replace Incapacity Benefit and Income Support claimed on the grounds of incapacity for new claimants.  The new system will consider what an individual is capable of, and what help they need to manage their condition and return to work.

A new test, the Work Capability Assessment will be introduced in October 2008 alongside the new Employment and Support Allowance and will be applied to all those people claiming the new allowance. The new test is intended to be more robust, accurate and fairer.  It will replace the current Personal Capability Assessment, which is weighted more towards a person’s physical disability and bases itself around assessing people’s incapability for work.

For further information go to the Department for Work and Pensions website.

3   Debt Relief Orders are planned to commence in April 2009

These are a new, simple, cheaper, alternative to bankruptcy for those with relatively low debts, few assets and low income and are one result of the Tribunals, Courts and Enforcement Act 2007.

The intention is provide debt relief for people in England and Wales who owe relatively little, have no income and no assets to repay what they owe and cannot afford to make themselves bankrupt.

Debt relief orders are designed to give those who have debts of £15,000 or less, assets of less than £300 and surplus income of less than £50 per month the opportunity to apply for an order that will lead to the debts being discharged after one year. During that period, people who have a debt relief order will be protected from enforcement action by their creditors and will be subject to similar restrictions to bankruptcy. 

For the answers to frequently asked questions on Debt Relief orders click here. But there is nothing yet (24 Sept 2008) about how much they will cost.

4   Key provisions of the new 2008 Banking Code and Business Banking Code:

A key new provision is for banks to provide more help for customers who may be heading towards financial difficulties.  This requires banks to proactively contact customers whom the bank feels (from the information available to it) may be heading towards financial difficulty.  Customers will be encouraged to talk to their bank and given information on sources of free independent money advice.

The new Code also requires banks to lend responsibly using strengthened credit assessment practices. It requires banks to consider credit reference agency data in assessing all applications for credit.  Banks must also consider at least one of: (i) income and financial commitments; (ii) the customer’s previous financial behaviour; and (iii) internal credit scoring techniques.

It requires banks to treat customers fairly and to help customers switch their current account to another bank.

It prohibits banks from closing a current account or savings account simply because the customer has made a complaint.

A copy of the Code can be obtained from any local bank branch or downloaded from 2008 Banking Code. Further guidance see British Banking Association.

5    Unfair bank charges latest - In England

The UK's biggest banks have lost the first stage of a test case about overdraft charges. 

Unauthorised overdraft charges are made when you go overdrawn without an arranged overdraft facility, when you go over any agreed overdraft limit or when there isn't enough money in your account to cover a withdrawal. These charges are often considered to be very high. Many people have complained that they are unfair and have asked for refunds.

Because there have been so many complaints, the Office of Fair Trading (OFT) is taking a test case to the High Court. A judge has decided that the OFT can apply unfair consumer contract regulations to decide if bank overdraft charges are fair or not. However, the banks may appeal against this decision.

There has still been no decision about whether the overdraft charges are unfair. There is likely to be no decision on this for some time.

Most people who have already made a complaint about unfair overdraft charges have had their case put on hold until the outcome of the test case is known. This situation has not yet changed.

For more information about bank charges, see Banks and Building Societies.

6    Income Tax Changes - The government has just announced that measures will be put into place in September to offset the effects of the abolition of the 10% tax band. The changes will be backdated to 6 April.

The way the new measures will work is that personal tax allowances for everyone aged up to 65 will increase by £600. This means that everyone who gets a personal tax allowance and earns up to about £40,835 will gain £120 this year. This will be paid in a lump sum of £60 in your September pay packet, followed by a £10 a month increase for each month until 5 April 2009.

Higher rate tax payers will not gain more. Basic rate tax will stay at 20% and higher rate tax will stay at 40%.

7   On 1 April 2008 the Local Housing Allowance was introduced nationally, following a successful pilot in 18 local authorities. It is the new way of working out Housing Benefit for private tenants. For details on why the Department for Work and Pensions is introducing LHA and how it works see Background to Local Housing Allowance.

LHA is based on rent levels for the area in which a person lives and how many people live with them. Payment will normally be to the tenant, who will then pay the landlord.

The rules for LHA for national roll-out and in the pilot local authoirites are slightly different. You can read the information supporting LHA national roll-out or the LHA pilot local authorities on separate pages of this site. Any queries regarding Local Housing Allowance can be sent to the DWP email address LHAadviceline@dwp.gsi.gov.uk.

See also further information on LHA at Gosport Borough Council’s website and Gosport’s LHA rates (.pdf). 

8   Return to work credit - In England

When you come off certain benefits, you'll be able to get some extra financial help if you start or go back to work.

The Return to Work Credit is available to people on the Pathways to Work scheme. You will be on the Pathways to Work scheme if you have been getting at least one of the following benefits for 13 weeks just before starting work:

• Incapacity Benefit
• Income Support because of incapacity for work
• Severe Disablement Allowance
• Statutory Sick Pay, if you were getting this for at least 13 weeks and are now getting Incapacity Benefit.

The Return to Work Credit is a weekly payment of £40 a week. You can get it for a maximum of 52 weeks, if you work for at least 16 hours a week and earn no more than £15,000 per year.

For more information about the Return to Work Credit, ask at your local Jobcentre Plus

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