Housing Benefit Reform

The Government is proposing a radical change to welfare benefits. Part of the changes will affect how housing benefit is paid and the amount of housing benefit that some tenants will receive.

There is widespread concern about the impact these proposals will have on social housing tenants. If they are implemented as proposed, then there will be huge consequences. Some of the poorest families will be made poorer if they wish to carry on living in their communities. Or they may be forced to move away from their friends and neighbours. From the housing association perspective, we would expect to see a significant rise in rent arrears, evictions and increased costs in transferring tenants, who ask to move to smaller properties.

There is a considerable effort being made to fight these proposals - and we will keep you informed of developments as they become known to us.

Universal credit

Currently, tenants who receive housing benefit can opt to have the benefit paid directly to the housing association. The Government is proposing that from April 2013, Housing Benefit will be paid directly to new claimants and it will be phased-in for existing claimants by 2016

Under-occupation

The Government is proposing to reduce Housing Benefit for working age tenants in social housing who are underoccupying their homes from April 2013. The government’s reasons for this is to reduce the overall housing benefit bill; make better use of the social housing stock; and improve work incentives for

working age tenants.

Currently, tenants in the private rented sector have their benefit restricted if they are deemed to have too many bedrooms for their needs and it is proposed to apply the same criteria to social housing tenants, like those

of Coastal.

Who will be affected?

• Single working age HB claimants living alone in two (or more) bedroomed properties (even where a second bedroom is needed due to access to children);
• Couples living alone in two (or more) bedroom properties (even where the second bedroom is needed due to disability where there is no outside care, or for grandchildren);
• Families in three (or more) bedroomed accommodation where children could be deemed to share a bedroom i.e. two same gender children aged under 16, or two aged under 10 regardless of gender; and
• Families with foster children will also be affected as foster children are not considered to be part of the claimant’s ‘household’ for the size criteria.

An example of the effect is:

A family including a boy aged nine and a girl aged six will be expected to live in a two-bedroomed property. Similarly, a family with two boys aged 15 and 13 will alsobe expected to live in a twobedroomed property.

We think that the Government will regard ‘working age’ as being the same as the Pension Credit age, which will be 61 years and 6 months in April 2013. This means that any tenant younger than that and receiving housing benefit will have the payment reduced if they underoccupy their accommodation.

How much will the reduction be?

We do not know how the reduction will be calculated, although it looks likely to be on the basis of a fixed percentage for every bedroom that is deemed not to be needed. Again we are uncertain about the actual percentage, but it is speculated that it could be 10% or 15% for every spare bedroom.

What this would mean is that a single person living in a two bedroomed flat where the rent is £80 per week, would have his or her benefit reduced by £8.00 - £12.00. For a couple living in a three bedroomed house where the rent is £90 per week the reduction could be between £18.00 - £27.00 per week.

The Government’s view is that tenants receiving housing benefit who are deemed to under-occupy should either make up the shortfall, which for many on benefits is not possible, or move to smaller accommodation more appropriate to their perceived needs.

If you are concerned about anything you have read in this article and would like to discuss it, please speak directly to your Housing Officer or contact Coastal Housing on 01792 479200.