Income management policy

Last reviewed: July 2025

Scope
Purpose and objectives
Policy statement
Definitions
Policy
Equality, diversity and inclusion
Related documents
Legislation and regulation
Review

1 - Scope

This policy applies to all customers residing in properties owned or managed by Sovereign Network Group (SNG).

2 - Purpose and objectives

This policy outlines how SNG manages income collection in a sustainable and ethical way, ensuring rent, service charges, and other payments are made in accordance with tenancy agreements, leases, or licenses. Our approach prioritises preventing homelessness and keeping customers out of debt by actively and meaningfully working with them to sustain their agreements.

The rent and service charges we collect are essential for maintaining our services, improving our homes, delivering new services, and supporting our communities. This policy ensures we balance financial responsibility with a compassionate approach to income management.

Objectives:

Maximise Income Collection: Ensure full and timely collection of all charges while reducing arrears through proactive strategies.
Promote Financial Inclusion: Provide resources and guidance to support customers in managing their finances.
Support Housing Stability: Help customers maintain their homes with targeted support.
Empower Customers: Provide advice and opportunities for training, employment support, and financial independence.
Ensure Legal Compliance: Follow all relevant laws and best practices in income management.

3 - Policy statement

SNG is dedicated to fairness, equity, and sustainability in income management. This policy prioritises engagement and support over enforcement, with legal action considered only as a last resort.

4 - Definitions

Former tenants - Customers who no longer have an active tenancy or licence agreement with SNG.

Homeowners - This term includes shared owners, leaseholders and freeholders who own the leasehold or freehold of their home outright.

Arrears - Any unpaid charges such as rent, service charges, or recharges that a customer owes to SNG beyond the agreed payment date.

Current tenant - A customer who holds an active tenancy or licence agreement with SNG and resides in a property we manage or own.

Debt collection agency - An external third party contracted by SNG to recover outstanding debts from former tenants or homeowners.

Economic abuse - A form of domestic abuse involving control over a person’s access to financial resources, undermining their ability to be financially independent or maintain housing.

Final welfare visit - A final attempt to visit and engage with a customer at risk of legal action, to assess support needs and explore alternatives to eviction.

Former homeowners - Includes shared owners, leaseholders, and freeholders who previously owned or occupied properties managed by SNG.

Legal action - The formal process taken to recover unpaid debts, which may include serving notices, initiating court proceedings, or pursuing eviction.

Licence agreement - A legal contract that grants permission to occupy a property without tenancy rights, often used in supported or temporary accommodation.

Major works - Significant repairs or improvements to a building or estate, which may be charged to customers particularly leaseholders or shared owners as part of their agreement.

Payment plan - An agreed schedule of repayments that allows a customer to gradually reduce arrears over a set period.

Reasonable adjustments - Modifications to standard practices or communication methods made to meet the needs of customers with disabilities or vulnerabilities.

Recharge - A charge applied to a customer for specific costs not covered by rent or service charges, such as damage, lost keys, or unauthorised alterations.

Rent account - The account maintained for each customer to record rent and related payments due and received.

Rent in advance - Rent paid before the start of the rental period, as required under tenancy, licence, or lease agreements.

Service charges - Charges that cover the cost of services provided to a property or estate such as communal cleaning, lighting, or maintenance billed in addition to rent or ownership costs.

Shared ownership - A tenure type where the customer owns a share of the property and pays rent on the remaining share owned by SNG.

Support charges - Additional charges related to the provision of housing-related support, usually in supported housing or accommodation schemes.

Tenancy agreement - A legal contract outlining the rights and responsibilities of a tenant and SNG, including payment terms, conduct, and ending the tenancy.

Universal Credit - A government benefit that replaces several legacy benefits, including Housing Benefit. It is paid directly to claimants (unless alternative pay arrangements are in place).

Vulnerability - Any factor such as financial hardship, mental health issues, disability, language barriers, or domestic abuse that may affect a customer’s ability to manage their housing or maintain payments.

Write-off - When a debt is formally removed from SNG’s accounts because it is no longer considered recoverable – See our Former Customer Arrears and Credit Write off Policy

5 - Policy

5.1. Principles

Comprehensive Contact Methods: Use all communication options, including next-of-kin contact if necessary.
Flexible Appointments: Offer virtual, phone, and in-person meetings.
Scheduled Appointments: Agree on specific times and dates when possible
Partnership Engagement: Collaborate with partners to better support customers.
Individual Consideration: Address each customer's specific needs and vulnerabilities, conducting proportionality and public sector equalities duty assessments before legal action.
Specialist Support: Ensure customers are supported to access expert advice and assistance – either directly or through signposting to trusted external agencies.
Suspend Legal Action: Pause legal proceedings when agreements are upheld and payments sustained.
Final Welfare Visit: Conduct a final welfare visit to the property where there’s no contact before initiating legal action.
Local Authority Consultation: Engage with Local Authorities’ homelessness services as part of ongoing case management, particularly when the case escalates or the customer’s home is at risk.
Record Keeping: Document the outcomes of all interactions comprehensively. Notes must be detailed as they can be used for legal evidence and in line with ‘Record Right’ guidelines.
Legal Action as a Last Resort: Pursue court actions only when all other efforts fail.
Responsible Write-Offs: Debts will not normally be considered for write-off where they result from non-payment or customer actions, unless it is clear that the debt arose wholly or partly due to service failure or organisational error.

5.2. Additional Commitments

Clear Expectations: Clearly communicate our expectations, including the requirement for customers to pay their rent or charges on time and in advance, in line with their tenancy, licence or lease agreement terms.
Supportive and Flexible: Be supportive and flexible, while ensuring customers understand the consequences of not paying their rent or charges as agreed.
Payment Options: Offer a range of payment methods, including online access to rent accounts.
Tailored Solutions Where Needed: Where customers have already fallen into arrears, we may agree short term, time limited payment arrangements to help them catch up and return to paying in advance, in line with their Agreement. These arrangements are not credit agreements but a supportive mechanism to help clear existing debt.
As we are not regulated to provide consumer credit, any such arrangements must be for less than 12 months and should not result in ongoing debt between payments.
Digital Access: Provide a digital platform for customers to access their account information or make payments 24 hours a day.
Active Engagement: Ensure no customer who is actively and meaningfully working with us to maintain their tenancy, licence or lease agreement terms is made homeless.
Accommodation Flexibility: Offer social rented customers, who are struggling to afford their current home due to changes in benefit entitlements (like the bedroom tax), the option to relocate to more affordable housing where local authority arrangements and stock availability permit us to do so at our discretion.

5.3. Advice and Support

SNG is committed to providing comprehensive support to customers to help them sustain their homes and address financial challenges. We will:

Provide guidance on financial management and transitions to Universal Credit.
Offer clear, accessible information about Universal Credit, Housing Benefit, and other welfare benefits.
Explain the importance of building up rent in advance.
Recognise the impact that debt and financial stress can have on mental health and well-being and strive to keep arrears at a minimum through early intervention and support.
Prioritise support for customers whose homes are at risk
Assist vulnerable customers in maximising their income through tailored advice and support.
Enable customers to build resilience and sustain their homes
Connect customers with our Employment and Training service for job and business start-up support.
Offer access to our debt advice team for help with budgeting and managing debt.
Refer and signpost customers to independent advice and support agencies for specialised assistance
Refer customers to any other appropriate internal support offers that may be available, ensuring a coordinated approach to meeting their individual needs.
Take proactive steps to identify potential cases of economic or financial abuse, working to safeguard customers and referring them to appropriate support agencies, such as domestic abuse charities, financial counselling services, or safeguarding teams.
Be aware of and report concerns related to safeguarding issues beyond domestic abuse, including hoarding, neglect, or other vulnerabilities, ensuring timely referrals to relevant services to support customer welfare.

For specific issues related to domestic abuse, please refer to our Domestic Abuse Policy.

5.4. Compensation payments and service charge refunds

If for whatever reason we need to make a compensation payment, or service charge refund, any outstanding debts will be deducted before the payment is made. Exceptions can be made on a case-by-case basis, below is an illustrative but a non-exhaustive list:

Compensation payments ordered as a determination from the Housing Ombudsman Service must be paid directly to the customer and not to the customers rent account
Where the compensation payment is for the replacement or repair of damaged white goods this can be paid to the customer
Where the compensation is as a reimbursement for other essential bills such as gas, electric or food and not reimbursing the customer would result in financial hardship
Where the payment is a reimbursement under the New Shared Ownership annual internal repair allowance. (Customers living in a Shared Ownership home which has been build using Homes England Grant Fund 2021-2026)
Where the compensation payment is a disturbance payment to cover moving costs. These payments are intended to assist with the practical costs of relocating and must not be used to reduce arrears.
Where the compensation payment includes a home loss payment as part of a regeneration scheme. These payments are provided when a tenant is permanently displaced due to redevelopment. Using them to offset arrears could cause financial or social distress and prevent the customer from securing a new home. These situations should be assessed on a case-by-case basis.

5.5. Former tenant arrears

Former tenants are customers who no longer have a tenancy or licence agreement terms with us. We expect customers who are ending their tenancy or licence to pay any outstanding arrears and debts before they leave their home. This means:

If there are arrears or charges outstanding when the tenancy or licence ends, we’ll agree a repayment plan
If the arrears aren’t repaid, we may refer to a debt collection agency.
In exceptional circumstances, we may agree to a move for a customer with arrears, provided that any former arrears are written into the new tenancy agreement and continue to be repaid.
All former debt must be paid before a former customer can move back into one of our homes, we may however make an exception where a customer has made and sustained a meaningful payment plan to address their debts.
Where a former tenant has moved out as part of a regeneration scheme and has the right to return, we will consider their arrears on a case-by-case basis. If they have arrears from their original tenancy, we may allow them to return, provided they have demonstrated a commitment to repaying their debt through a structured and sustained payment plan.

5.6. Former homeowner arrears

The term ‘homeowners’ includes shared owners, leaseholders and freeholders who own the leasehold or freehold of their home outright.

Before a sale is completed the solicitor acting for the purchaser will usually make sure that the account is paid up to date and there are no arrears.

If there are arrears, we won’t provide a certificate of compliance. The certificate may be required by the Land Registry so that the new owner can be registered.

If a sale does complete and there are former owner arrears, we’ll try and get the arrears paid in full through the solicitors acting for the purchaser. If this isn’t possible, we’ll consider referring the arrears to a debt collection agency.

5.7. Allocation of payments

When a customer has more than one type of debt with us, such as Rent Arrears, Major Works, Court Costs or Recharges, and they make a payment, we’ll allocate the money in the following order:

Main Rent Account (including service charges, support charges, and major works)
Court Costs
Garages/Parking Charges
Former Tenant/Homeowner Debts
Recharges
Other Charges

5.8. Review

If a customer feels we haven’t kept to our Income Management Policy, they can ask us to review our decision.

A manager will carry out this review and we’ll only do this once.

6 - Equality, diversity and inclusion

We will apply this policy consistently and fairly and will not discriminate against anyone based on any protected characteristics, including those set out in the Equality Act 2010.

At Sovereign Network Group (SNG), our commitment is to make sure that no individual or group experiences unfair, discriminatory, or prejudicial treatment in recruitment, pay or promotions, housing, or any other service we provide, such as lettings, tenancy advice, repairs, or income collection.

SNG strives to be an open, inclusive, and diverse organisation where everyone has a right to be treated with dignity, fairness, and respect. As an organisation, we value the diversity and talents of all individuals and the richness that brings to our culture.

We understand the varying needs of our customers and communities and promote equality of opportunity in employment and service provision. We deliver appropriate, accessible, and flexible services, being tolerant, understanding, and non-judgmental of others or their lifestyle choices. We stand up to and challenge prejudice, discrimination, and harassment in all its forms.

6.1. Application of Equality, Diversity, and Inclusion Principles

SNG considers equality, diversity, and inclusion in delivering this policy by:

Reasonable Adjustments: Providing reasonable adjustments for customers with specific needs, such as tailored communication methods or alternative payment arrangements.
Support for Vulnerable Groups: Identifying and offering additional support to individuals with vulnerabilities, including those experiencing financial hardship, mental health issues, or language barriers.
Cultural Sensitivity: Ensuring staff are trained in cultural awareness to address the diverse needs of our customers respectfully.
Proactive Engagement: Actively seeking feedback from underrepresented groups to improve service accessibility and inclusivity.
Policy Accessibility: Making this policy available in multiple formats and languages upon request to ensure accessibility for all.

7 - Related documents

SNG policies and procedures provide additional guidance for implementing this policy effectively:

Tenancy, Licence, or Lease Agreement: These documents outline the specific terms and conditions that customers must adhere to, including payment obligations. Always refer to these agreements to ensure clarity and compliance.
Arrears Management Procedures: Detail steps for managing arrears for all tenures both current and former.
Insolvency Procedure: Outline support for customers in formal debt processes.
Complaints Policy: Explains how customers can raise concerns about income management practices.
Vulnerability and Reasonable Adjustments Policy: Ensure additional support for customers with specific needs.
Equality, Diversity and Inclusion Policy: Reinforces fair treatment in line with the Equality Act 2010.
Domestic Abuse Policy: Addresses support for customers experiencing domestic abuse.
Data Protection Policy: Ensure GDPR compliance in handling customer data
Lettings Policy: Outlines processes for letting properties, including payment arrangements.
Safeguarding policy: explains what safeguarding is, the types of harm and response steps.

8 - Legislation and regulation

The legislation listed in this policy is not intended to cover all legislation applicable to this policy. To comply with clause 1.1 of the Regulator of Social Housing’s Governance and Financial Viability Standard, which requires adherence to all relevant law, SNG will take reasonable measures to ensure compliance with all applicable legislation by reviewing policies and procedures and amending them as appropriate. Any queries relating to the applicable legislation should be directed to the policy owner.

The following legislation and regulations relate to income management for managing social rented, supported, temporary accommodation, keyworker, shared ownership, leasehold, freehold, and market and intermediate market rented homes:

Rent Act 1977: Protects tenants in regulated tenancies.
Housing Act 1985: Establishes legal frameworks for secure tenancies.
Housing Act 1988: Introduced Assured, Assured Shorthold Tenancies (ASTs) and grounds for possession.
Housing Act 1996: Adds further grounds for possession, including arrears thresholds.
Welfare Reform Act 2012: Governs Universal Credit, impacting income management.
Housing and Regeneration Act 2008: Provides possession measures for shared ownership.
Law of Property Act 1925: Covers property law, including forfeiture relief.
Protection from Eviction Act 1977: Requires landlords to follow notice and court procedures before eviction.
Equality Act 2010: Protects customers from discrimination in arrears management and evictions.
Landlord and Tenant Act 1985: Ensures transparency in rent and service charges.
Consumer Rights Act 2015: Prevents unfair terms in tenancy agreements Homelessness Reduction Act 2017: Places duties on landlords and authorities to prevent homelessness.
Regulator of Social Housing Standards: Mandates adherence to rent and tenancy standards.
Data Protection Act 2018 (GDPR): Governs handling of tenants' financial data.
Immigration Act 2016: Introduces Right to Rent checks.
Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020: Provides temporary enforcement protections for customers in financial distress.
Pre-Action Protocol for Possession Claims by Social Landlords: Establishes steps landlords must follow before initiating possession proceedings, encouraging resolution of arrears without court action.
Insolvency Act 1986: Outlines procedures for debt recovery in bankruptcy and voluntary arrangements.
Domestic Abuse Act 2021: Recognises domestic abuse, including economic abuse, and provides protections and support for victims.
Mental Capacity Act 2005: Establishes the legal framework for making decisions and providing support where a person may lack the capacity to make decisions for themselves.

9 - Review

This policy will be reviewed every two years or sooner if there are significant changes in the legal or operational landscape. The review process includes:

Business Relevance: Ensuring the policy aligns with current practices.
Legal Compliance: Updating the policy to meet new legal requirements.
Organisational Goals: Evaluating the policy's effectiveness in supporting SNG objectives.
Outcome Effectiveness: Measuring success against intended goals and objectives.
Stakeholder Feedback: Incorporating input from affected or involved parties