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Service charges

What is a service charge?

A service charge is a charge made for services we provide to your block or home that are not covered by the rent such as caretaking and communal lighting. It covers communal services and, in some cases, individual services such as heating, hot water and servicing home adaptations. 

We operate a variable service charge system. This means we will only charge you the actual amount it costs us for the services you receive. We aim to provide services in the most reasonable and cost effective way and to a standard acceptable to you, our residents. The same charges are made to all homes and residents who receive or benefit from them.

The same charges are made to all homes and residents who receive or benefit from the services.

Why are you sending out a service charge statement?

The service charge statement shows you the difference between the actual costs, compared to what we originally estimated for the period October 2019 to September 2020. This period is called the ‘look back period’.

We have to estimate how much your service charge will be for the following 12 months. By law, if we make this charge, we have to make an adjustment when we know how much the services actually cost. We want to be open and transparent with you about these costs and the adjustment.

The estimate might be different from the actual cost due to things like changes in inflation or different products being used to provide services. Once we know the actual cost, we either add or deduct the difference from the estimated cost of the services for the next year (starting April 2021) to give your new service charge.

What is the ‘look back period’ and how does this work?

Each year we will estimate the sum we are likely to spend in providing services to you over the coming year. That will be the service charge we will ask you to pay for the year.

The estimate will run from 1st April - 31st March.

At the same time, we will work out how much we have actually spent on providing services for you in the previous period.

The previous period we look back on covers 1 October - 30 September.

The difference between what you have paid for this period and the actual cost of the services will then be made as an adjustment to what we will ask you to pay for the following April to March.

If we have overcharged you we will reduce your service charge for the coming year. If we have undercharged you, we will increase your service charge.

We plan to send your statement (covering October - September) and your bill for the following year (covering April - March) at the same time – this will normally be in February or March along with your rent letter.

All annual charges will start in April unless a new service is introduced during the year.

The diagram below illustrates this.

Service charges explained

Is there any reduction in my service charges due to Covid?

PCH are committed to only charging residents for the services provided, in line with the variable service charge system we operate, and also our Service Charges Policy and Service Charges Strategy.

At the outset of the Covid pandemic a number of services were significantly reduced as we took measures in line with government guidance to protect our residents and staff. Where services have been reduced we will reduce the charge made to residents.

Services were significantly reduced from the week beginning 23 March when the first national lockdown was announced, until the week beginning 25 May when we were able to return to full delivery of service chargeable activity. When services did return, they were done so in line with national Covid guidance and local risk assessments to protect residents and staff. To provide a safe environment we needed to source additional cleaning materials, specialist services and personal protective equipment (PPE), and this has resulted in an increase of costs in some areas, however it is still expected that most residents will see a net reduction in their service charges due to reduced service delivery.

The look back period of this year’s charge covers the period October 2019 to September 2020, meaning that the impact of charges effected by the Covid pandemic in more recent months will form part of next years’ service charge calculations. As an example, our common room areas available in a few of our blocks have been closed since March 2020 so will not be charged for, however, the look back period only covers to September 2020 so only 6 months would be reduced in this year’s charge, with the remaining reduction in subsequent years.

Reductions to charges due to reduced service delivery and additional service costs incurred due to Covid response are shown within the service charge statement included within your annual rent and service charge letter.

How does the affordability cap work?

PCH has an affordability cap for some tenants who pay service charges.

This cap only applies to you if you were a tenant before April 2011 and is due to the introduction of variable charges. We have tried to keep this information as clear as possible but if you have questions then please contact your Housing Officer.

If this applies to you, we have adjusted the service charge so you will not pay any more than what was your ongoing charge at 2011, uplifted by inflation +1% +50p for each year since April 2011. The cap will be applied until all properties in your block pay the same service charge, after which the cap will no longer apply.

Why should I pay for a lift, laundry or door entry control in my block if I don’t use them?

If you live in a block of flats with communal services, everyone in the block has access to the facilities. Whether you choose to use it or not, all residents in the block share the cost of communal services and the cost is shared between all properties in the Block, hence reducing the cost to you, the resident.

I am in a block and I know someone in another block who pays a different amount for the same service. Why is this?

Each block, however similar, will have costs that can vary. For example, one block may have more flats than another so the costs are spread among more residents. This makes the cost per resident lower. Some blocks have more grounds to maintain or larger courtyards to clean so the costs may be higher.

What is a management charge in my service charges?

There is a cost in running and managing the services provided to your block. These costs are covered by the management charge.

This includes calculating the charges and adjustments, managing the contracts, making payments to our providers, providing information and consulting with residents.

The management charge is based on recovering the total overhead costs of managing the services and equates to 16p per service per week, and will not be more than 15% of the total cost of your service charges.

Will I get a refund if I am owed money for the period October 2019 to September 2020?

If we overestimated your service charge, any extra money you have paid will be taken into account by reducing your service charge for the year starting from April 2021.

 

Information about benefits

Bedroom Tax

If you are below pensionable age, receive Housing Benefit or Universal Credit and you have one or more spare bedrooms, the amount you receive will be reduced. You need to pay the difference, commonly known as the Bedroom Tax (or spare room subsidy), yourself. If you are having difficulty paying this, please contact us as soon as possible and we will do our best to help you and provide advice.

We are able to help anyone who wants to move to a smaller home and we have already helped many residents move to accommodation that suits their needs. If you would like to move to a smaller home please contact us.

Universal Credit

Universal Credit was introduced in Plymouth in 2016 as part of the national roll out by government. Universal Credit is the new single payment for people who are looking for work or on a low income. It replaces a range of working-age benefits including Job Seekers Allowance, Income Support, Employment and Support Allowance, Child Tax Credits, Working Tax Credits and Housing Benefit with a single calendar monthly payment.

If you currently receive Housing Benefit, this is paid directly to us as your landlord. Under Universal Credit, this will be paid to you with all your other benefits and you will then need to pay us your rent.

We realise that this is a big change but we will do everything we can to make this as easy as possible for you.

We contact people who we think may be affected to see if there is anything that they are concerned about or if they need any additional support.

If we speak to you about Universal Credit, we will need to ask you a lot of questions about your income, your outgoings and any debts you have – this information will be held in complete confidence. It is important that you are honest with us so that we can give you the right advice and help if you need it.

If you would like to find out more about Universal Credit and how it may affect you, contact our Income Recovery and Financial Inclusion Team on 0800 028 0350 or (01752) 388121.

Benefit Cap

There is a limit in the total amount of welfare benefits that people of a working age can receive – this is called the Benefit Cap.

The Benefit Cap is £20,000. There are exemptions if you are in receipt of Personal Independence Payment / Disability Living Allowance/Support Group Employment and Support Allowance, Industrial Injuries Benefit, War Disablement Pensions, War Widow/Widowers benefits or if you work enough hours to get Working Tax Credit.

If you have any queries concerning the Benefit Cap and how it may affect you, please call the Income Recovery & Financial Inclusion Team on 0800 028 0350 or (01752) 388121.