Wednesday, 18 January 2017

Benefit claimants exempt from Pay to Stay

Social tenants in receipt of housing benefit will be exempt from the Pay to Stay policy, the government has announced.

A government response to a consultation on the scheme published today, said households claiming housing benefit would escape the new rules, contained in the Housing and Planning Bill.

“It should not be the case that those who are in receipt of housing benefit should be subject to increased rents, as the rent rises would simply need to be covered by the taxpayer,” the consultation response said.

“Households in receipt of housing benefit will therefore be exempt from the policy.”

Under Pay to Stay, social tenants earning £30,000 (£40,000 in London) will be forced to pay up to market rents. The Chartered Institute of Housing in November said the threshold is too low and would hit benefit claimants.

The response also confirmed that there would be a ‘taper’ for Pay to Stay. A total of 89% of respondents to the consultation were in support of a tapered system.

“We would design this so that households at the lower end of income above the proposed threshold will see their rent rise by only a few pounds each week,” the response said.

The policy is voluntary for housing associations, but compulsory for councils, which will be required to hand the additional income to the Treasury.

However, the consultation response said councils would be able to retain a “reasonable” amount to cover the administrative costs.

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