Saturday, 07 March 2015

Government revises benefit cuts for unemployed

The government is expected to change a controversial cut to housing benefit when it reveals sweeping reforms to welfare later today.

Inside Housing understands that ministers have decided to amend a 10 per cent cut to housing benefit for tenants who have been claiming jobseeker’s allowance for more than a year. The deeply unpopular cut was due to be included in the Welfare Reform Bill, due this morning, but it is understood ministers have accepted last minute changes.

The nature of the changes are not yet clear, but the decision represents a major victory for Liberal Democrat backbenchers and peers, who have been campaigning against the cut alongside housing and homelessness charities. They had argued that it would indiscriminately punish unemployed people who might be doing everything in their power to secure a job.

One peer who has been closely lobbying ministers, said: ‘There has been a significant change of direction, a door has been opened and we now need to do a bit more pushing to get even more changes to this.’

Government sources said they were also prepared to amend the cut at the committee stage of the bill.

MPs still hope that the cut will disappear from the bill entirely once it has passed through its committee stage in the House of Commons. A number of the cuts to housing benefit, including ones for private tenants, have already been laid in secondary legislation.

Richard Capie, deputy chief executive of the Chartered Institute of Housing, said: ‘We would be very pleased if this cut was dropped.’

The bill will combine the majority of benefit payments into a single ‘universal credit’, which will be rolled out to new claimants from 2013. Work and pensions secretary Iain Duncan Smith hopes this will ensure claimants will be better off in work than on benefits as their benefits will be withdrawn at an even rate.

The Department for Work and Pensions said the reforms would mean around 2.7 million households would be better off under the universal credit, with over 1 million households receiving more than £25 a week more than they are paid under the current system.

As well as tough sanctions for claimants who fail to accept offers of jobs or training, it also includes measures to keep couples together by ensuring they can claim more benefits living together than apart.

Social landlords will also been keen to learn whether the bill will protect direct payments of the housing element of the credit. The DWP’s white paper on the reforms had originally promised that this would be the case, but ministers have since suggested they favour all elements of the credit going directly to tenants.

Readers' comments (26)

  • Chris Webb

    So poor Mr Shapps has been over-ruled on part of his push to social cleansing; but the bulk of his measures remain to inflict financial hardship and home loss upon many of our poorest working people as well upon those seeking work.

    Kill the Bill to save the people.

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  • Common sense prevails if this is true.
    Next step - direct payments of LHA to landlords if the tenant aks.
    Universal Credit lurks.....lets make sure this works properly - The LHA/Council Tax element SHOULD be kept as a seperate element run by the Councils.

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  • Arthur Brown

    This is turning into a week of U-turns!

    Backtracking on the benefit cuts, changing the policy on selling off the national forests, indecision about the imposition of the increased fuel duty levy ........................

    Perhaps Cameron's lot arn't as clever as they thought?

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  • Melvin Bone

    'Universal Credit lurks.....lets make sure this works properly' I'm sure it will be as smooth as tax credits or the ID card etc etc

    'The LHA/Council Tax element SHOULD be kept as a seperate element run by the Councils.' Yes it should be, but I'm not sure they will see the light...UC is blinding them...

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  • Rick Campbell

    All these U-turns proves the Coalition is for turning unlike a certain ex-Prime Minister.

    Perhaps they will turn so much that they may well ending up disappearing... (I am sure you can all work that one out for yourselves)?

    If it really is the case that "consultation" / protest has led to u-turns then perhaps kass could well see the much loved 'revolution' happen following tenants marches?

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  • Rick Campbell

    Maybe if they (the U-turning Coalition) don't sell off the forests then enterprising enforced homeless people might find a way to build tree houses to live in?

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  • Oh dear we all are getting a bit carried away arent we?

    Firstly we havent had the announcement and secondly the 10% cut is just one element of the HB cuts and caps. So even if the 10% issue does prove to be correct then we still have the rest of these outrageous cuts and caps that will have huge negative impact

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  • Jon H

    Whats the bet that 'call me dave' and his friends were never going to implement this and were just using it as a bit of a distraction from the other cuts and then expecting us to be happy as larry when its announced they wont go through with it and forget about the other cuts?

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  • Rick Campbell

    Certain members of the government should be carried away but without them would we have as much to snipe away at?

    Clause 6, Sections 44 and 45 of the Bill seem to suggest that "Universal" may not actually mean "Universal" especially where 'short periods' apply.

    Mr L -- happy as larry? Larry the Downing St cat?

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  • Rick Campbell

    Clause 11: Housing costs
    56. Clause 11 provides for an amount to be included for housing costs. A person’s maximum amount may include an amount for housing costs if the claimant is liable to make payments on their home. This could be in the form of rent, mortgage costs or other housing-related costs. Where the amount for housing relates to a liability to pay rent, it is intended that the amount will be calculated with reference to a claimant’s household size and circumstances as well as their actual rent, as is the case currently in housing benefit. The detailed rules for calculating the amount will be set out in regulations under subsection (4).

    57. Regulations under subsection ( 5 ) may allow for circumstances where an award will not include an amount for housing at all, as well as for an amount for housing not to be included until a prescribed time or for its inclusion to end after a prescribed period. This may, for example, be used to prevent a person from receiving support for mortgage costs for a period at the beginning of their claim, as is currently the case in income support, or to maintain the current limit on how long a claimant may receive support for mortgage costs.

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