Saturday, 29 August 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Duncan Smith hopes this will ensure claimants will be better off in work than on benefits as their benefits will be withdrawn at an even rate.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.

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