Benefit reforms will cause 'family breakdown'
New rules will leave young benefit claimants struggling to contribute towards their households’ rent, leading to family breakdown, housing bodies have warned.
A consultation on regulations for the universal credit, which will combine a host of means-tested benefits from October 2013, closes tomorrow (27 July).
In its consultation response, the National Housing Federation has voiced concern over a change to rules for ‘non-dependents’. Deductions from benefit are made for non-dependent members of the household, such as grown-up children.
Currently, households with people claiming jobseekers allowance or employment support allowance under the age of 25 are exempt from deductions, while those in work can lose between £11 and £74 a week from their housing benefit depending on their income.
The new system brings in a flat rate deduction of £65 per month for everyone over the age of 21, regardless of their employment status. This means working non-dependents will be better off but those aged 21 to 25 years on benefit will be hit by the deduction for the first time.
The NHF believes this is unfair as people aged under 25 years receive less jobseekers allowance and will receive less universal credit. The NHF believes this will make it more difficult for these non-dependents to contribute to housing costs.
Homelessness charity Shelter has warned the move could lead to family breakdown.
Sam Lister, policy and practice officer at the Chartered Institute of Housing, said the move was ‘regressive’ but does provide better work incentives.
A DWP spokesperson said: ‘It is perfectly reasonable to expect young people living at home to make a contribution towards their parent’s housing costs. But we recognise that those under the age of 21 have lower earning potential and so we will exempt them from this contribution, and, because the contribution will be at a flat rate of just £15 a week, there will be a clear incentive to move into and to progress in work.’
The NHF has also raised concerns over eligibility for service charges and the prospect of shortfalls for tenants because universal credit will be paid five and a half weeks after a claim. It is also worried that some tenants might not have internet access to manage their universal credit claims.
The DWP plans to cut the time households’ are exempt from the bedroom tax following a bereavement from a year when the tax comes in next April to three months when universal credit begins next October. The NHF said this cut is ‘harsh and unnecessary.’
The Chartered Institute of Housing in its submission will raise concerns about plans to abolish extended payments of benefit for claimants finding a job. It will also call for the criteria for items eligible for service charges to be widened.
Once the call for evidence closes the Social Security Advisory Committee will scrutinise the regulations, which are expected to come before parliament in the autumn.