Anna
An interesting topic.
No, we don’t have multi-tier charging, except for varying floor-area and/or number of bedrooms.
The correct and fiscally sensible thing to do is to charge every resident the appropriate rate for their particular size of accommodation. The ‘appropriate rate’ has to be:
At or below the relevant LHA,
and
When multiplied by the number of your residents, cover your costs.
(Yes, I know that some costs may not be paid for by WMC).
These WMC rates x 52 x the number of residents they apply to should match what it costs to run the charity for a year.
You appear to have 3 categories of payer:
The Rich – those who can pay in full from their own resources.
The Poor – those who can’t pay from their own resources and are subsidised by the State through LHA.
The (too) Proud – those who can’t pay in full from their own resources but ‘won’t be subsidised by the State’.
The question is – who is the ‘somebody’ that then pays the subsidy for them?
The Charity?
The Rich?
The State?
If it is to be the Charity, you will need to have Reserves you are prepared to use for this (somewhat like a bursary fund). If you do this, you’re likely to run out of funds before too long.
It’s unfair to expect the Rich residents to contribute every year to such a ‘bursary’ – by paying, effectively, a surcharge. One might expect this in a London-based independent school with lots of well-heeled clients – but not in an almshouse context.
If it is the State that has to pay the ‘bursary’, then presumably you would have to inflate the true cost of the WMC by the amount of the subsidy, so the State overpays what is given to the Poor.
I think that this is, frankly, dishonest.
And I don’t think this ‘moral circle’ can be squared by saying you’re merely ‘claiming legally due LHA by another route’. To my mind, this is just not allowed.
Meanwhile, a thought – I suppose the (too) Proud residents who won’t claim LHA are also too proud to receive WFA and their State Pension?
So what to do?
I think you have to speak to each of the (too) Proud residents. Point out that the only equitable, financially sound and legal course of action is for the Charity to charge the same WMC rate to all residents (varying only because of their unit’s floor area, for example).
If they demur, for reasons of misplaced pride, then invite them to refuse their WFA and State Pension as well.
And see what they say!
Nick Stiven
clerk@stjohnswilton.org.uk