Fears proposals would reduce the number of private properties
LHA changes to fund £60m reform
Reforms to housing benefit which would fight benefit dependency would cost at least £60 million to implement.
A consultation document, launched on Tuesday, proposed a ‘transition into work payment’, under which claimants would continue to receive housing benefit for three months after starting a job.
This raft of measures is intended to ensure people are better off in employment than claiming benefits. The Chartered Institute of Housing estimated this would cost around £60 million if the benefits were paid over 13 weeks. The top five to 10 per cent of the most expensive rents in one area would be excluded when calculating the local housing allowance rate, where benefits are paid direct to private tenants. Savings from this would provide funds for the transition into work payment.
Sam Lister, policy and practice officer at the Chartered Institute of Housing, said: ‘£60 million would be the absolute bottom line that [recalculating LHA rates] would save.
‘I would guess that they are expecting to get more than that in the longer term, but actually that’s going to have a very small effect in terms of overall housing benefit expenditure.’
John Denny, chief executive of Chester & District Housing Trust, said the association had seen a 10 per cent increase in tenants claiming housing benefit in the past five years. He added: ‘The long-term vision for housing benefit to support our customers into work, prevent homelessness and increase the choice, supply and quality of all housing tenures for our customers truly warrants cross-party support.’
Excluding the most expensive properties would avoid high-profile cases where clamaints have been able to rent luxurious properties, or where benefit recipients started work and found they could not afford the high rents previously covered by LHA.
Alan Ward, chairman of the Residential Landlords’ Association, said the proposals would ‘definitely remove property from the sector’. He added: ‘The government is already concerned about being able to meet the need of local authorities to house people on LHA. This would do nothing to help.’
Landlords and homelessness charities welcomed consultation on giving private tenants choice over having their benefit paid directly to them or their landlord. But Kay Boycott, director of policy and campaigns at Shelter, said: ‘We’re very disappointed that the government hasn’t made the decision to immediately restore choice to tenants.’
The paper suggests LHA payments should be conditional on property reaching minimum standards.
The consultation runs until 22 February 2010.
Single benefit
Housing benefit could eventually become part of a single welfare payment, the consultation paper said.
The paper said the idea of a single benefit for working-age people or a housing tax credit was ‘a long-term aspiration’ but that the other proposals in the paper were the first steps in a ‘long-term vision for housing benefit’.
The paper said a single benefit would simplify rules and administration, and could break down barriers to work by aligning benefit withdrawal rates - the rate at which the benefit drops when someone gets a job.
Duncan Shrubsole, director of policy and external affairs at charity Crisis, said the drop in housing benefits when someone began working was greater than with other benefits.
Carers complain of reform delay
The government has been accused of ‘dragging its feet’ over changing housing benefit rules to pay for a second room for disabled people who have an overnight carer.
Paul Alexander, chief executive of disabled students’ charity The Snowdon Award Scheme, said the government should think of tackling it through means not raised in the paper, such as discretionary payments from councils.
The paper said the government wanted to consult on changes which would not increase costs but would help people who needed extra space. The paper mulls raising the age at which children in other households have their own bedroom paid for by the benefit from 16 to 18, and to use the savings to pay for extra space for disabled people or single parents who have custody of children at weekends
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Readers' comments (2)
JLH | 18/12/2009 10:05 am
Shouldn't the focus be on providing affordable social rented properties for the thousands of people who are working but forced to claim Housing Benefit because of the level of rent being charged in market rent properties?
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Jim Paton | 20/12/2009 9:47 pm
The other side of the coin is that Housing Benefit claimed by people with jobs is a hidden handout to the worst employers who pay less than a living wage. This is nothing new. I recall the issue being raised in the legendary "McLibel" trial, but I've not heard a public peep about it since.
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