Direct payments face axe in benefit review
The government is considering a u-turn over direct payments of the local housing allowance.
A consultation paper on housing benefit suggests tenants could choose whether or not their benefits are paid directly to their landlord, reversing the policy that payments should go to tenants, which came into force in April 2008
Launching the consultation in the House of Commons yesterday afternoon, work and pensions secretary Yvette Cooper stressed any change must primarily benefit tenants. She said: ‘I think this is important that the choice should be with the tenant and not simply with the landlord.’
The paper also suggests excluding the most expensive properties in an area when calculating rents to prevent payments being distorted to the extent that tenants can afford ‘luxurious’ accommodation at the taxpayers’ expense.
There would be also be greater incentives for landlords to improve the quality of homes rented out to housing benefit claimants. Under the new proposals, benefits would only be paid for homes meeting certain minimum standards for quality, energy efficiency and carbon footprint.
The National Landlords Association welcomed the decision to look at LHA payments. It believes the system of direct payments has contributed to around £220 million of arrears, as tenants spend the money on items other than rent.
Chairman David Salusbury said: ‘This consultation is by no means perfect but the issues which affect LHA can no longer be ignored. The NLA’s response on behalf of landlords across the UK will focus on ensuring that tenants are truly empowered by having the option of being allowed to have rent payments made directly to their landlord if they wish.’
Shadow work and pensions minister Theresa May attacked the document for simply re-stating government policy. She said: ‘The review of housing benefit was first announced in 2008, down for publication in the first half of 2009.
Referring to delays to plans to cut a £15 weekly excess payment to LHA recipients who shop around for a good deal on their rent, she added: ‘Perhaps the secretary of state needed more time to consider the u-turn she has made on removing the excess payment.’
The excess payment was introduced when the LHA came into force in April 2008, but in the Budget earlier this year chancellor Alistair Darling said it would be scrapped from April 2010. In the pre-Budget report last week he announced this has been put off until April 2011.
View results 10 per page | 20 per page | 50 per page
Have your say
You must sign in to make a comment
Readers' comments (23)
Harry Lime | 16/12/2009 9:20 am
Personally I believe that the payments should be direct, I agree with the concept why it should go to the tenant but history has shown the issues, those tenant who have the ability to budget gain nothing anyway as the money they handle has to go to the landlord anyway. I accept the £15 over is an incentive to these type of tenants. What I take issue with on this is the idea that this will give the tenant the option of receiving direct payments or not. In reality landlords will make it a condition of accepting them for a tenancy that they ensure HB/LHA is paid directly to them, so it will be no choice at all.
Unsuitable or offensive? Report this comment
vh | 16/12/2009 9:59 am
no Harry the tenent has the choice, landlords cannot make it a condition as this breaches unfair terms
Unsuitable or offensive? Report this comment
Harry Lime | 16/12/2009 10:46 am
You're correct vh, but my point is it will be the case as it will be inferred by the landlord, as in "let me help you fill out your HB form, if i'm happy with what you put down about direct payments, then I'll let you sing the tenancy agreement" should the tenant refuse, they won't get the property or should the tenant change their mind, they'll find their 6/12 month AST won't be renewed. Totally unfair, illegal even, but I know it'll happen.....
Unsuitable or offensive? Report this comment
RLP | 16/12/2009 11:23 am
I am currently in recepit of the LHA as I fell ill last year and I am currently recovering from a illness. When I was taken ill I was sharing a flat and I applied for LHA. Because I shared a flat I got less LHA and I couldn't afford to stay sharing , I even applied for discressionary housing benifit as I would prefered to stay sharing my rent was £300 a month. I was told I would be better off in my own flat as I would get more LHA. I found that the council would rather give me more more money for having my own place than they would for sharing which would of worked out cheaper. I do think the LHA needs to be reviewed and I did shop arround but I do contribute towards my rent aswell . I currently recieve dirrect payments and I am able budget my money and I keep my LHA in a seperate bank account . However there are thoose that do struggle to budget and yes get into arrears. So I think you should have a chioce as to weather the payment goes to you or your landland.However if you end up in a situation with overpayment that can cause problems weather it you or the landlords recieves the dirrect payment. I do think LHA needs to be reviewed as to the ammounts paid , the timescales of sorting out LHA payments , dirrect payments systems. I should add that I untill I fell ill I worked in supporting housing I have supported clients throu the process but also had the personnel experince of recieving LHA. Also I do think that if they are going to review LHA they should speak to clients in recept if it.I appologise if this is a rather long comment. There is loads I could say on the subject of LHA and the benifits system from the clients piont of view and from working with clients. It will be intresting to see what happens .
Unsuitable or offensive? Report this comment
Melvin Bone | 16/12/2009 12:13 pm
I agree the claimant should have the choice to pay their own landlord direct LHA but it should never be allowed to be a condition of a tenancy.
The £15 top up was a terrible idea from the off and should be scrapped by the next government ASAP.
Unsuitable or offensive? Report this comment
Joe Halewood | 16/12/2009 1:31 pm
The framing of this argument as one of 'choice' is nonsense, in theory, practial and political terms. All paying to claimant does is increase choice for te claimant not to pay, whereas paying direct to landlord just takes that choice away.
Hence the only issue of 'choice' is the choice not to use HB for what is its targetted intention.
If tenants dont pay they will likely be evicted and that costs the public purse more in higher temporary housing costs and also costs the tenants more in rental costs and/or worse standards of accommodation.
The real choice is (a) pay HB direct to landlord and have less evictions and less cost to public purse (but deny tenants choice not to pay), or (b) keep the principle of making tenants responsible to choose and budget (laudable aims) but risk and incur more evictions - with all the suffering and uncertainty this brings - and more public purse costs.
RLP is doing what government wants and meeting commitments and managing yet many others are not for whatevr reason - design or inability to manage for a huge number of reasons. The system is fundamentally flawed and needs change. Even the govts intention of LHA if that is to drive down costs and save money is not working as more and more evictions are taking place costing public purse more, and because of LHA and private landlords increasingly not taking HB claimants because of LHA, there is LESS choice of accommodation open to tenants.
So in both cost and choice terms the LHA doesnt work
Unsuitable or offensive? Report this comment
Melvin Bone | 16/12/2009 2:32 pm
Giving the claimant a choice...is not a choice...brilliant point. I withdraw from my position and bow to your superior mind.
You be all for withdrawing JSA and giving everyone bus tokens and food stamps next. I'd imagine you'd be up for the return of the workhouse next.
LHA needs evolution not revolution.
Scrap the top up, give claimants a choice of where the LHA goes, remove the highest rents from the LHA formula and it will be a much better system than the one we have.
Unsuitable or offensive? Report this comment
Pat Faille | 16/12/2009 2:42 pm
I understand the issue of receipients receiving benefit and also the temptation of keeping the benifit cheque. but to keep a roof over their heads means L/L's need to recieve payment for rent. Otherwise the LA has to pick them up. Re-house them. This makes no sence to me.
Unsuitable or offensive? Report this comment
kass | 16/12/2009 3:16 pm
Joe Halewood | Wed, 16 Dec 2009 13:31 GMT
",,,,So in both cost and choice terms the LHA doesnt work"
It does work in both terms: It stops landlords holding onto millions (billions over the years) of overpayments; It gives tenants choice.
Unsuitable or offensive? Report this comment
Bernard Townroe | 17/12/2009 6:37 am
Whether directly or not, no payment should go to any landlord that provides substandard or even dangerous accommodation. Public money should go only to those prepared to maintain their properties in a proper condition.
Unsuitable or offensive? Report this comment