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Vulnerable suffering as result of housing welfare reforms

2 April 2014

Reforms to the support provided for housing costs – including the Social Sector Size Criteria (SSSC) (also known as the "Bedroom Tax" and the “Spare Room Subsidy") and the household Benefit Cap – are causing financial hardship to vulnerable people who were not the intended targets of the reforms and are unlikely to be able to change their circumstances in response, say the Work and Pensions Committee in a report published Wednesday 2 April.

The SSSC is having a particular impact on people with disabilities who have adapted homes or need a room to hold medical equipment or to accommodate a carer. The Committee recommends that anybody living in a home that has been significantly adapted for them should be exempt from the SSSC. The Report further urges the Government to exempt all households that contain a person in receipt of higher level disability benefits (DLA or PIP) from the SSSC.

Committee Chair

Dame Anne Begg MP, Committee Chair, said:

"The Government has reformed the housing cost support system with the aim of reducing benefit expenditure and incentivising people to enter work.  But vulnerable groups, who were not the intended targets of the reforms and are not able to respond by moving house or finding a job, are suffering as a result. 

The Government’s reforms are causing severe financial hardship and distress to vulnerable groups, including disabled people. Discretionary Housing Payments (DHPs), which local authorities can award to people facing hardship in paying their rent, are not a solution for many claimants. They are temporary, not permanent, and whether or not a claimant is awarded DHP is heavily dependent on where they live because different local authorities apply different eligibility rules. 

Using housing stock more efficiently and reducing overcrowding are understandable goals.  But 60-70% of households in England affected by the SSSC contain somebody with a disability and many of these people will not be able to move home easily due to their disability. So they have to remain in their homes with no option but to have their Housing Benefit reduced."

The household Benefit Cap

  • The Benefit Cap is having an adverse impact on disabled people and their carers.  This is particularly the case where the carer lives with the disabled person, for example a parent or adult child, but is not considered part of the same household for benefit purposes. The Government should exempt all recipients of Carers Allowance in this situation from the Benefit Cap. [paragraph 106]
  • Local authorities often have no option other than to place homeless households in temporary accommodation. This can be more expensive than permanent accommodation and claimants can then fall within the scope of the Benefit Cap. Local authorities often have to pay the shortfall between rent levels and Housing Benefit for those affected by the Cap so there is no overall saving to public funds. The Government should exempt all households in temporary accommodation from the Benefit Cap. [paragraph 110]

Dame Anne said:

"The Government has stated that the Benefit Cap is not intended to push carers into work. But this may well be its effect unless recipients of Carers Allowance are exempted from the Cap.

Homeless people placed in temporary accommodation have no choice over where they are housed and few options for reducing their housing costs. It seems particularly unjust, therefore, for them to be affected by the Benefit Cap."

Discretionary Housing Payments (DHPs)

  • The Government should review DHP provision when more data are available and increase funding, if necessary, to protect vulnerable people from hardship. [paragraph 148]
  • Local authority discretion in granting DHPs is resulting in access to funding depending heavily on where a claimant lives. Some local authorities are taking income from disability benefits into account in the means tests they apply for determining eligibility for DHPs.  The Government should issue clear guidance to local authorities that disability benefits should be disregarded in any means tests for DHPs. [paragraph 141]
  • People with long term problems such as disabilities, who are unlikely to be able to move house or find work as a response to the reforms might need longer term DHP awards. The Government should issue new guidance to local authorities making explicit that it supports long-term DHP awards for specific categories of claimants.
  • Local authorities will need clarity on DHP funding for at least three years ahead. The Government should announce decisions on DHP funding early so that local authorities can plan effectively.  [paragraph 145]

Dame Anne said:

"Access to DHPs should depend on need, not somebody’s postcode.

DHPs will be needed for the foreseeable future to assist people affected by the housing benefit reforms. Local authorities need certainty about what funding the Government will make available for this, for at least the next three years. The Government cannot on the one hand expect local authorities to make longer-term DHP awards and on the other only outline funding levels for the short-term.

Disability benefits are intended to cover the extra costs arising from a disability; they are not disposable income.  It is inappropriate, therefore, for them to be included in means tests for DHPs."

Reforms to Local Housing Allowance (LHA)

  • There is a growing discrepancy between average rents and the amount of LHA that households can claim.  As a result, private sector landlords are increasingly reluctant to rent to LHA recipients. Evictions and non-renewals of tenancies are increasing, and the properties that do remain available to claimants are of increasingly poor quality. [paragraphs 27-28]
  • Despite homelessness acceptances being down overall, rises are occurring in high demand areas and homelessness among those not in priority need increased by 9% between 2012 and 2013. The Government should monitor the impact of LHA reforms on homelessness and look at further ways of supporting claimants if the reforms are found to be exacerbating it.  [paragraph 36]
  • The Government should consider increasing LHA by more than 1% in more pressured areas and amend the Targeted Affordability Fund so that it can be paid at higher levels in areas where rent increases are greater than 4%. [paragraphs 27 and 47]

Dame Anne said:

"Private sector rents are becoming increasingly less affordable for Housing Benefit claimants and this may be contributing to increased homelessness in some areas.

Whilst the Targeted Affordability Fund is welcome, in places like London where rents are increasing by 8%, its effectiveness in relieving hardship and preventing arrears will be much more limited."

Further information