Benefit cuts will cost families £600 a year
Cuts to the local housing allowance will hit almost everyone claiming the benefit, with an average loss of £12 a week.
A government impact assessment on the changes, the bulk of which were announced in the June Budget, has concluded 936,960 of the 939,220 local housing allowance claimants will lose out.
The largest cuts will come in London, as the amounts claimed are highest in the capital.
Here the average cut would be £22, from an average claim of £204. In Yorkshire and Humber the average drop would be £9 from £93.
‘The government must review these cuts immediately.’
Leslie Morphy, Crisis
Claimants with larger homes would also suffer higher penalties. Under the new rules households with five-bedroom homes would lose £57 a week. For smaller homes the cuts range from £7 a week for a shared room to £22 for a four-bedroom house.
The measures proposed to come in next year include capping the amount that can be claimed under the LHA at between £250 and £400 a week depending on property size, setting rents based on the 30th percentile of private sector rents rather than the median, and removing a £15 a week excess payment for tenants who find a good deal on rents.
Charities working with vulnerable people called on the government to rethink the cuts.
Leslie Morphy, chief executive of homelessness charity Crisis, said: ‘A million households face an uncertain future. Many will no longer be able to pay the rent. They will be forced into debt, unsuitable accommodation or even end up homeless.
Liz Phelps, housing policy officer at Citizens Advice, said: ‘We would urge the government to reconsider these changes to ensure it meets its own test of ensuring fairness and protecting the most vulnerable, at the very least applying the proposed cap to new claims only.
‘There can be no doubt that the combined effect of these cuts will lead to a sharp increase in rent arrears and homelessness, with the potential to spark a housing crisis in places such as London where the cuts will have the biggest impact.’
Inside Housing is running a campaign, What’s the Benefit?, calling on the government to find a fairer way of reducing the £21 billion housing benefit bill.