Tuesday, 17 January 2017

Social landlords win direct payments battle

Social landlords will continue to receive housing benefit payments directly under the government’s new welfare reforms.

The Welfare Reform Bill, unveiled this morning, includes a provision for the housing element of the new universal credit, which will combine all in-work benefits into a single payment, to be paid direct to the landlord.

Housing associations had been concerned that they would see a rise in arrears if payments to cover rent went straight to tenants. They had warned that any rise in arrears would damage lender confidence in the sector.

‘Little has shocked me more since coming into office than the state of housing benefit.’

David Cameron

Two weeks ago, welfare reform minister Lord Freud told a property conference that he did not support paying housing costs directly to landlords. But a spokeswoman for the department said today that officials had understood concerns around security of income for landlords and the bill would retain a ‘facility’ for direct payments.

Launching the bill this morning, work and pensions secretary Iain Duncan Smith also confirmed that he would not press ahead with plans to cut housing benefit by 10 per cent for claimants who have been on jobseeker’s allowance for more than a year.

Speaking on BBC Radio Four’s Today programme, Mr Duncan Smith said: ‘We won’t see this in the bill for one very good reason. The more we looked at this, the more I reviewed the interplay between that reduction at 12 months and the universal credit and work programme meant that all of these people were going to move into the work programme anyway, so they would be having intensive help to get back to work.’

The bill still includes sanctions for those who refuse offers of employment or training, which could see a claimant losing their benefits for three years if they persistently turn down work.

Prime minister David Cameron said this morning: ‘Little has shocked me more since coming into office than the state of housing benefit. We inherited a system that cost £20 billion a year, with some claimants living in property worth £2,000 a week.’

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