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.
Visit our What’s the Benefit? page for more information or sign our petition to support the campaign.
View results 10 per page | 20 per page | 50 per page
Have your say
You must sign in to make a comment
Readers' comments (30)
Melvin Bone | 26/07/2010 10:52 am
Many of these claimants saw increases in there benefits when labour was in power due to endless increases in allowances for things such as child maintenance and the freezing of non-dependant deductions for years upon end.
The LHA party that Labour started is over and reality strikes. Many of the claimants that will have benefit cut had benefit increased in the last few years that Labour messed around with LHA.
So in real terms they have not actually had any cuts just a re-adjustment back to where they were a few years ago...
I wonder if any claimants saved the LHA windfall they had from Labour in the last few years...
Unsuitable or offensive? Report this comment
Melvin Bone | 26/07/2010 10:52 am
Many of these claimants saw increases in there benefits when labour was in power due to endless increases in allowances for things such as child maintenance and the freezing of non-dependant deductions for years upon end.
The LHA party that Labour started is over and reality strikes. Many of the claimants that will have benefit cut had benefit increased in the last few years that Labour messed around with LHA.
So in real terms they have not actually had any cuts just a re-adjustment back to where they were a few years ago...
I wonder if any claimants saved the LHA windfall they had from Labour in the last few years...
Unsuitable or offensive? Report this comment
Alpha One | 26/07/2010 11:05 am
Or, instead of bankruptcy or debt, they could just find a job and earn money like the rest of us!
I agree, people who can't work should get their rent paid, but too many people can work and choose not to because they can live on benefits.
These families will not be LOOSING £600 per year, they just won't be entitled to claim it, there is a difference.
If you loose something, the implication is you were entitled to it in the first place.
Too many people on benefits have this sense of entitlement, and this needs to stop. Benefits are a safety net, and whilst they are necessary especially in a capitalist society, they need to recognised as a safety net, and not an alternative way of life.
Until we end this sense of entitlement, we can never solve this problem.
Unsuitable or offensive? Report this comment
Sidney Webb | 26/07/2010 11:09 am
MB - tenants can not claim beyond the value of the rent charged. Are you suggesting that they conspired with their private landlords to massively hike up the rents?
Tenants have not gained one penny over the period you mention, that has not gone directly into their landlords pocket. The gainers in this taxpayer rip off has been those landlords and not the tenants, so why punish the tenant. Capping rents will achieve the required reduction in benefit without the social impact upon tenants.
Unsuitable or offensive? Report this comment
Sidney Webb | 26/07/2010 11:10 am
Bob - tenants do actually work too. Speak to some, you'll be amazed how little they can be paid.
Unsuitable or offensive? Report this comment
Anonymous | 26/07/2010 11:15 am
Every tenant will be paying more for their rent from their own pockets to subsidise the rich PSLs.
It is the high levels of LHA being paid that makes it unaffordable for HB claimants to work, or more correctly to afford to work. Unless the LHA levels are reduced this state of dependency and inaffordability continues and wont change.
Reduce the levels of LHA payments to social housing levels and we still will have the projected massive rise in homelessness, but we will take away the afforadbility issue and we bring the HB bill under control. To carry on as propose simply rewards PSLs and penalises everyone else and that is morally and financially wrong!
Unsuitable or offensive? Report this comment
Melvin Bone | 26/07/2010 11:46 am
'Progressive Solutions Required | 26/07/2010 11:09 am
MB - tenants can not claim beyond the value of the rent charged.'
Private tenants can if the LHA they are awarded is up to £15 above their rent. Were you not aware of this ridiculous piece of legislation?
Please stop harping on about capping rents, it is not going to happen. Really. Labour might have been daft enough to consider it but the ConDems are not.
Unsuitable or offensive? Report this comment
Anonymous | 26/07/2010 12:16 pm
The housing benefit caps are being proposed to make savings on housing benefit paid. Most agree that the caps will increase homeless numbers. The homeless then apply to the LA for housing, they are housed in temporary accommodation like bed and breakfast and the tax payer picks up the bill. Where are the savings?
Unsuitable or offensive? Report this comment
john bull | 26/07/2010 12:51 pm
So the reduction in entitlement is the same as two pks of fags or six pints of beer, will they notice out of the very generous benefits paid.
Only if those who benefit from the benefit culture wind them up.
Can someone tell me the amount paid per week in housing benefit in the USA, Canada, Japan ? If I dont hear I'll bet its zero.
Time we tunned our benefit addicts to the real wide world we live in.
We can no long to buy off the unemployable and work shy, from the profits of our imperial past.
Unsuitable or offensive? Report this comment
gordon thompson | 26/07/2010 1:47 pm
We will all be worse off under this government - whether on benefit or not. But we are all in it together, according to the millionaire David Cameron
Unsuitable or offensive? Report this comment