Tuesday, 17 January 2017

U-turn looms over Freud pledge on bedroom tax

Peer’s plans to exempt vulnerable tenants may derail entire policy

Lord David Freud may be forced to row back on his pledge to protect vulnerable people from welfare reforms because of political opposition to letting more people avoid paying the bedroom tax.

Under current rules, some supported housing - known as exempt accommodation - is protected from the bedroom tax, benefit cap and universal credit. However, accommodation is not exempt if the landlord is not the provider of care or when a landlord is a council.

The welfare reform minister said last April that officials at the Department for Work and Pensions were working to ensure supported accommodation not meeting the current ‘exempt’ definition would be protected from the ‘unintended consequences’ of welfare reform.

This had been welcomed by landlord such as Habinteg, a supported housing provider with only 516 of its 1,200 wheelchair accessible properties exempt from the benefit changes.

But the DWP has now admitted there may be no way to exempt all supported accommodation from welfare reforms.

In a letter sent to housing organisations including the National Housing Federation and the Chartered Institute of Housing, the DWP said that while it still wants to protect supported accommodation from universal credit and the benefit cap, it no longer wants to protect non-exempt accommodation from the bedroom tax.

A source said the government was opposed to the move because creating more protections from the bedroom tax would cause political embarrassment.

Civil servants cannot change the exempt accommodation definition without also adding extra protections for the bedroom tax. This means all plans to protect non-exempt supported accommodation from welfare reform are on ice.

The NHF has written to the government calling for it to protect supported housing without political embarrassment when it amends housing benefit rules made before 1996 to correct a technical error which means thousands of people could have been wrongly hit by the bedroom tax.

Sue Ramsden, policy lead at the NHF, said: ‘As ministers will be amending the housing benefit regulations to close the bedroom tax loophole, we would urge them to take the opportunity to also extend the definition of exempt accommodation to ensure that it covers supported housing where there is a split between the landlord and the support provider.’

A DWP spokesperson said: ‘We remain committed to working with supported accommodation providers and refuges to ensure that they can provide strong services and are protected from any possible unintended consequences of essential welfare reform.’

To read more about the bedroom tax click here.

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