MPs back direct benefit payments
Paying the local housing allowance direct to tenants should remain the default option, an influential committee of MPs has said.
In a report on the LHA published today, the Work and Pensions select committee argues against government plans to reintroduce the payment of housing benefit to landlords.
Paying benefits direct to tenants was introduced in April 2008, to encourage benefit recipients to take greater responsibility for their finances. Opponents of direct payments argue it has led to an increase in arrears, and the government suggested giving tenants a choice of how their benefit is paid in a consultation on benefit reform issued last year.
This also suggested landlords could receive payments of local housing allowance direct if their properties meet certain standards of energy efficiency and decency.
The MPs on the select committee reject this idea. Their report states:
‘We believe that this proposal would undermine a number of important objectives for LHA. It would bring back administrative burdens and benefit complexity just removed by the scheme and, most importantly, would undermine the objective of removing barriers to work.’
Although the MPs back direct payments to tenants, they note there are a number of problems with the system – such as access to bank accounts – and make a series of recommendations for improvements, including a call on local authorities to use discretion on how they make payments.
The committee says the issue of direct payments ‘is the most controversial aspect of the LHA and the one on which the committee received most evidence’.
It also calls on the government to reform the way the benefit is calculated so that claimants seeking work are not priced out of areas with the most job opportunities.
The committee says that while the broad rental market area system works in most areas of the country, the Department for Work and Pensions needs to work with the Valuation Office Agency to identify areas where there is such a variation in rents that claimants cannot afford to live in the more expensive parts of towns and cities.
The committee also says current LHA rules are blocking independent living for disabled claimants who need an extra bedroom for a carer, and urges the government to make reasonable adjustments in the LHA rules for disabled people.
A DWP spokesperson said the department would look at the recommendations within the report as part of its ongoing reforms to housing benefit.
Have your say
You must sign in to make a comment
Readers' comments (9)
Melvin Bone | 30/03/2010 9:35 am
The LHA rules for disabled people need updating asap to allow an extra room for carers who sleep over but live elsewhere.
The ability to pay LHA direct into a Post Office account as mentioned in the report is also a good idea as many people on the breadline have no other accounts.
I still think payment to landlords should be allowed as an option for LHA though...
Unsuitable or offensive? Report this comment
the purple avenger | 30/03/2010 10:24 am
As we are in a recession and expecting cuts, why not have a default position of payment direct to landlord in all cases. This will make the process much more efficient and will contribute efficiency savings. I accept that this undermines the tenant taking responsibility for their finances but my pension and tax is deducted from my wages at source - does that mean I am not responsible for those? I think not - and in any case, bigger issues are at play. It may be nice to try and educate people to be responsible with their money but in our current position the savings are more important.
Unsuitable or offensive? Report this comment
Peter | 30/03/2010 11:55 am
What is this LHA for, if not to pay the rent? Is it an allowance that could used for something else? If the tenants do not pay the rent because he/she have used the LHA for something else, isn't this illegal? Isn't there a parallel view of criminalising subletting and 'criminalising' for not paying the rent which the state has given for this purpose?
Unsuitable or offensive? Report this comment
Simon Stokes | 30/03/2010 12:00 pm
That just shows how seriously out of touch with reality our MP's really are. All housing benefit should be paid directly to the landlord as the default. Housing benefit is taxpayers money and as a taxpayer, I dont want my hard earned money squandered on drink and drugs because of the arrogance and ignorance of those the benefit is there to help! Yes its a good idea to try and make people responsible, but too many of them are in this situation because they clearly are not responsible in the first place or they are just out to cheat the system. We have to get real and stop wasting precious tax payers money.
Unsuitable or offensive? Report this comment
Mark | 30/03/2010 12:09 pm
The point is well made by the purple avenger. Let's take it further. Why not just pay me all my wages without deduction, then I'll be responsible for paying the Government my tax and NI, and sorting out my pension, and any other payments.
That'll be a deafening silence from Westminster and all the other devolved assemblies and governments in the UK then.
No surprises there then. Why treat tenants differently ? Why not, for example, pay their Council Tax benefit direct and let people decide what to do with it ?
Unsuitable or offensive? Report this comment
Eian Mantle | 30/03/2010 1:56 pm
Quite right Mark, how come Housing Associations and Councils get rent direct? why don't we pay the housing benefit direct to them?
Unsuitable or offensive? Report this comment
Melvin Bone | 31/03/2010 11:17 am
Why not go the whole hog and deduct gas/electric from JSA/Incap/Pension payments?
Payments of LHA are direct to the landlord, but only if the claimant is deemed to be vulnerable or is more than 8 weesksin arrears...
Payments to the landlord should, in my opinoin , be an option for the claimant and only compulsary when necessary.
Unsuitable or offensive? Report this comment
Jack Davies | 31/03/2010 3:29 pm
1. Why not make all HB payments direct to all landlords for say the first 6 months?
2. Then pay direct to tenant thereafter but if say 4 weeks arrears accrue then the landlord can claim direct payments again.
This is very simplistic but can solve many of the current problems.
Private landlords would be far more willing to take HB claimants and thus ease the housing lists and ease homelessness. Many PSLs currently serve notice on 6-month ASTs and so create a revolving and costly homelessness application. In return PSLs whose current HB in payment figures are 63% above social rents could reduce rents as their current level includes an amount for bad debt - this proposal takes that away.
Secondly, if after the first 6 months have elapsed and any landlord calls for direct payment due to arrears (and because HB will be in payment even in the tardiest council!) then it is likely to be a tenant issue for arrears. This should flag up with RSLs the need for support and with PSL tenants such a role could be taken up homeless prevention teams - at a fraction of a full homeless investigation that would be due shortly thereafter
Yet overall - and ive left many aspects of this not discussed - such a simple proposal creates greater security for all and still incorporates the onus on the tenant, correctly, to make sure that rent is paid.
Unsuitable or offensive? Report this comment
Melvin Bone | 01/04/2010 9:29 am
What about the vast number of LHA awards where the tenant only gets a partial payment ....
What if the tenant is up to date with their rent?
What if the tenant is in dispute with their landlord?
Direct pay to the tenant should remain the default option. They applied for it...not the landlord!
Unsuitable or offensive? Report this comment