welfare reform update. welfare cuts – who hurts most? new tenants lone parents young single people...
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Welfare Reform Update
Welfare cuts – who hurts most?
• New tenants
• Lone parents
• Young single people
• Women
• Disabled people
• Large families
• Social tenants with spare rooms
• Ethnic minority groups
• Private rented sector landlords?
Who is less affected?
Older people...
• Universal credit is for working age only
• Protected from under occupation measure
Total benefit cap
• From 2013 household benefit payment capped at around £500 per week for families and £350 for single adult households
• Excludes Disability Living Allowance recipients and working families equivalent of Working Tax Credit.
• Housing element that gives
Benefit cap – money left for rent?
Number of children (couple, Council Tax Benefit£20 per week):
Rent (pw) at which householdwould be affected by welfare cap:
1 £302
2 £245
3 £187
4 £130
5 £72
6 £15
Private rented and social sectors
• Deductions for non-dependants increased
Tenants living with other adults will begin to see their LHA or HB reduced as non-dependant deductions are increased over a three-year period from April 2011.
Weekly gross income Deduction
2010/11 2011/12
Less than £122 £7.40 £9.40
£122 to £179.99 £17.00 £21.55
£180 to £233.99 £23.35 £29.60
£234 to £309.99 £38.20 £48.45
£310 to £386.99 £43.50 £55.20
£387 and above £47.75 £60.60
No deductions are made for people under 25 on JSA or older people on Pension Credit and some other groups.
Social housing only
Empty Nest Penalty
• HB for working-age families to reflect household size
• Hits existing tenants – under pension credit age; disabled; lone parents
• Hits 680,000 households (372,000 in HA and 308,000 in LA)
• Provision in Welfare Reform Bill – would come into force in 2013
• Expected to be based on LHA standard – percentage cut rather than flat rate cut – eg. One spare bedroom = 10 - 15% HB two bedroom 20 – 25%
• New duty on tenants to report house size? Or Landlords?
Social housing only
Empty Nest Penalty: regional breakdown
Region Estimated households affected
North West 154,400
London 103,800
Yorkshire & Humberside 91,300
West Midlands 86,200
East Midlands 52,800
South East 51,500
North East 50,100
South West 48,000
East 39,700
England 677,800
Mitigating Measures
• HB claimants with disability in private rented sector entitled to funding for an extra bedroom for a non-resident carer – Government estimates will benefit about 10,000 disabled people (April 2011)
• Councils given cash to tackle older under-occupancy (Jan 2011)
• Money for homelessness prevention work protected to spending review
More good news?
Discretionary Housing Payments up
2010/11: £10m
2011/12: £20m
2012/13: £60m
2013/14: £60m
2014/15: £60m
Extra DHP over spending review period = £130m
A further £50m over Spending Review period "to help meet the housing needs of claimants who are affected by the changes”.
Total additional funding: £180m
Where are the discretionary housing payments going? HB cuts HB help
£2.2bn
£180m
HB cuts vs. HB help
Impact on HA sector
• Risk of arrears – HB cuts and wider welfare reform
• Higher management costs
• Can local authorities insist on nominating HB recipients on waiting list to occupy 80% rent homes?
• Will HB cover near-market rents? HAs to “have regard” to LHA bedroom caps.
• Once £26k benefit cap is reached HB will be cut back.
Universal Credit
Universal Credit will simplify the benefits system by bringing together a range of working-age benefits into a single streamlined payment.
It aims to:
• Simplify the system• Make it cheaper to administer• Improve work incentives• Smooth the transitions into and out of work• Reduce in-work poverty• Cut back on fraud and error
UC: Federation concerns
• Long term threat to HA rents. DWP considering new LHA for social housing. Federation calling for HB to match actual rents
• DWP presumption of payments to tenants not landlords.
• Child support usually goes to mother, HB to tenant, workless benefit to individual. Where will the UC go? What about sanctions and conditionality?
