Tuesday, 04 August 2015

High-earning tenants forced to declare income

High-earning social tenants are to be legally obliged to declare their income under plans to force households that earn more than £60,000 to pay market rent.

Plans set out by the Communities and Local Government department last week state the government will enshrine in law that the onus is on tenants who earn above the threshold to reveal their earnings ‘to ensure they are making a fairer contribution’.

The CLG’s response to a consultation on the ‘pay to stay’ plans confirms the government wants to press ahead with the controversial scheme, and that £60,000 will be the cut-off point. This was announced in this year’s Budget, but no further detail was released at the time.

Sixty-thousand pounds is the lowest of the three limits set out by the government in its consultation on pay to stay, which ran in June and July last year.

A summary of the consultation responses, which were published by the CLG last week, show one third of the 155 respondents ‘had some practical concerns’ and more than a third were opposed to the move.

In its response the department said: ‘We have carefully considered responses to this consultation, and we recognise that there are some specific issues to be addressed in implementing the policy, such as how income is to be defined.’ It said it will provide further details on the intended policy in a forthcoming consultation.

Social landlords will be expected to use the extra money made from the policy to fund new affordable housing.

Responses were received from a range of organisations including councils, arm’s-length management organisations, housing associations and tenants’ and residents’ organisations.

About a third of respondents thought the £60,000 threshold was appropriate, a smaller proportion thought £80,000 should be the minimum and the least number favoured a £100,000 threshold. A ‘significant number’ also felt the threshold should be a more nuanced, taking into account factors such as local affordability, average earnings and household and property size.

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