Whitehall to rethink ‘unfair’ benefit regime

The government has agreed to rethink housing benefit levels for hundreds of people across the UK following a landmark House of Lords judgement, dubbed the ‘Heffernan case’.

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Law lords agreed in July that private Sheffield tenant Daniel Heffernan’s benefit had been reduced unfairly because of the way it was calculated under the new local housing allowance regime.

Under the fixed-rate system, his payment was based on an average rent that applied across the whole of the city.

Mr Heffernan argued successfully that this area was too large to be fair, because it pulled down the benefits of those living in more expensive areas. The government’s rent service has now agreed to review 1,000 cases similar to Mr Heffernan’s, according to a circular seen by Inside Housing.

Mark Edmondson, revenue and benefits manager at Ribble Valley Council, said the creation of rental areas had made it more difficult for people to find affordable accommodation in his district.

‘I’m hoping that when they do this review, some of these 1,000 cases will be in our area and that they will then correct the wrongs and everything will be fine and hunky dory in Ribble Valley,’ he said. ‘But there may be another, new, set of losers [in neighbouring areas].’

Controversy over the way the LHA operates created a tabloid storm last week when a family in Ealing was found to receive £150,000 a year to rent a privately owned seven-bedroom home.

The benefit level was inflated because the west London home sat in the same rental area as the central London borough of Westminster.

In a statement, work and pensions secretary James Purnell said he was ‘shocked and concerned’ at the situation.

‘I have already asked my officials to carefully examine this issue as part of our current review of housing benefit and expect them to report to me as a matter of urgency,’ he added.


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