Cuts to Housing Benefit in Autumn Statement

At Westminster today the Chancellor, George Osborne, laid out his plans for public spending in his Spending Review and Autumn Statement.

The biggest surprise of the day was the Government’s U-turn on cuts to tax credits, but there was also cuts to Housing Benefit announced, as well as plans to help people buy a home. Despite the fact that the tax credit cuts won’t be introduced, the Government still needs to find £12bn in cuts to social security spending by 2020.

Housing Benefit will no longer cover the full rent of social housing renters

The amount of rent that Housing Benefit will cover in the social rented sector will be capped to the relevant rate of Local Housing Allowance. This will include extending the Shared Accommodation Rate for single claimants under the age of 35 to social renters. This major change will mean that Housing Benefit will no longer cover the full rent of social housing renters.

The proposal for single people aged under 35 is particularly worrying as the current Shared Accommodation Rate for Local Housing Allowance in NI ranges from just £42.15 - £45.70. The Government has said that this measure is aimed at tackling the amount of public spending on Housing Benefit and to align payments to social and private renters. This change will be implemented from 1 April 2018, but will only apply to tenancies entered into after 1 April 2016.

Payment of Housing Benefit for 4 weeks for those outside the country

From April 2016, the Government will also limit the payment of Housing Benefit and Pension Credit to 4 weeks for claimants who are outside the country. At present, Housing Benefit recipients can go abroad for up to 13 weeks while continuing to receive Housing Benefit.

Helping those wanting to own their own home

The Chancellor’s statement places a big emphasis on home ownership with plans for 400,000 new starts by 2020/21, including:

• The provision of more ‘affordable’ starter homes i.e. sold at 20% discount of market value which is still out of reach for many people looking to get on the housing ladder.
• An increase in the number of homes under Help to Buy whereby people can buy a share in a property and save towards a further stake.
• Further provision for tenants to save for a deposit while they rent.

Concern for those accessing accommodation

Housing Rights is concerned about the potential impact that the Government’s planned cuts to Housing Benefit will have on some of the clients we deal with. One of the biggest areas of enquiry to our advice line is around accessing accommodation; both in the social rented sector and the private rented sector. Affordability is a problem for many people in the private rented sector with having to pay upfront fees and shortfalls between their contractual rents and the level of help available through Local Housing Allowance.

Up until now, social rented tenants have been on a much more secure footing with Housing Benefit treating their contractual rent as ‘eligible rent’ for the purposes of calculating Housing Benefit.

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