local housing allowance presentation sept 2011
TRANSCRIPT
Local Housing Allowance Progress to date
Dr Philip AgulnikEntitledto
I am....• An economist specialising in social security • Before Entitledto I worked for DWP and
other central govt. departments• Entitledto supply a free public benefits
calculator performing over 2 million calculations a year
• We provide a range of products for local authorities
• We supply a LHA calculator for the Royal Borough of Kensington and Chelsea at www.rbkc.hbupdate.co.uk
Why reform Housing Benefit?
LHA reform timetable From April 2011• No excess payment where rent is less than LHA • Maximum of four bedrooms • Cap of £250 per week for 1 bedroom, £290 for 2
bedrooms, £340 for 3 bedrooms and £400 for 4 bedrooms
• Rates set at the 30% rent level for the local area rather than the median (50%) rent level.
From January 2012• Single people under 35 get shared accommodation
rate From April 2013• Rates will be increased in line with CPI inflation
Impact on LHA rates: London4 Bedroom LHA Rate:
Impact On LHA rates: national4 Bedroom LHA Rate:
Indicators of successCuts will take the form of
• Landlords reducing rents• Tenants moving house (downsizing and/or new
area)• Tenants having a reduced income after paying
rentPolicy success =
• Reducing rent on current property • Moving house to lower rent
Increased homelessness indicates failure: tenants did not receive message that cuts would affect them
Have rents come down?
January
Febru
aryMarc
hApril
MayJune
July
August
Septem
ber
October
November
December
January
Febru
aryMarc
hApril
May96.00
98.00
100.00
102.00
104.00
106.00
108.00
110.00
112.00
114.00
116.00
Avg HB award: LHA tenants Avg HB award: Non-LHA private tenants
Have rents come down? 4 Bedroom LHA Rate:
Have people moved? LHA stock
Aug Sep Oct Nov Dec Jan Feb March April May80,000
90,000
100,000
110,000
120,000
130,000
140,000
150,000
160,000
170,000
180,000
Inner London private sector HB Outer London private sector HB
Have people moved? HB inflows
Janu
ary
Febr
uary
March
April
MayJu
ne July
Augus
t
Sept
embe
r
Octob
er
Novem
ber
Decem
ber
Janu
ary
Febr
uary
March
April
May4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
13,000
14,000
Outer London Inner london
What does current data suggest?• Too early to tell much: some evidence of
people moving away from inner London?• But only new claims have been affected by
main changes – so not surprising that little change
• Only change affecting some existing claimants is withdrawal of £15 excess
When will changes affect current tenants? On anniversary date (April 2011 – March
2012)• Excess payment if rent under LHA
amount
On anniversary date + 9 months (Jan – Dec 2012)• Single person restriction on under 35s• Maximum of four bedrooms • Caps on inner London LHA rates• Rates set at the 30% rent level
Other changes
Increase in Discretionary Housing Payment funds - but increase of £40 million is only 2% of cuts to LHA
Extra bedroom allowed for a non-resident carer where overnight care needed
Increase in non-dependant deductions Room entitlement calculation for all for
working age HB claimants from 2013 HB cut by 10% after 12 months on JSA
Work Incentives: an asideUniversal Credit: small improvement in
incentives• Lower deduction rate: 65%/76% (if ignore Council
Tax)• Simpler administration (hopefully)• But same disregards and no boost at 16/30 hours
Council Tax Benefit reform: effect unknown
Cap on overall benefits: big stick but few affected
Housing Benefit reform: lower rents mean high benefit deduction rates taper out sooner
Rent levels in different sectors
Avg HB award: LA tenants
Avg HB award: HA tenants
Avg HB award: LHA tenants
Avg HB award: Non-LHA private
tenants
0.00
20.00
40.00
60.00
80.00
100.00
120.00
May-09May-10May-11
HB is working! 80% increase in employed claimants since 2009
Janu
ary
Febr
uary
March
April
MayJu
ne July
Augus
t
Sept
embe
r
Octob
er
Novem
ber
Decem
ber
Janu
ary
Febr
uary
March
April
MayJu
ne July
Augus
t
Sept
embe
r
Octob
er
Novem
ber
Decem
ber
Janu
ary
Febr
uary
March
April
May2,000,000
2,200,000
2,400,000
2,600,000
2,800,000
3,000,000
3,200,000
3,400,000
3,600,000
3,800,000
Workless HB claimants age <65 In work HB claimants
