Download - Homelessness Prevention: Preparing for Changes to Housing Benefit

Homelessness Prevention:Preparing for Changes to Housing

Benefit

August 2010

Background

“...spending on housing benefit has risen from £14 billion ten years ago to £21 billion today. That is close to a 50% increase over and above inflation.

Costs are completely out of control. We now spend more on housing benefit than we do on the police and on universities combined...

....it is clear that the system of housing benefit is in dire need for reform. We will do that by:

• Resetting and restricting Local Housing Allowances;• Up-rating deductions;• Reducing certain awards• Re-adjusting Support for Mortgage Interest payments• Limiting social tenants’ entitlement to appropriately sized homes;• And, lastly, we will for the first time introduce maximum limits on

housing benefit – from £280 a week for a one bedroom property to £400 a week for a four bedroom or larger”

George Osborne, 22 June 2010

Proposed Housing Benefit Reform

• Capping LHA rates at £250 p/w for a 1-bed property, £290 p/w for a 2-bed property, £340 p/w for a 3-bed property, and £400 p/w for all properties with 4-beds or more, from April 2011

• Up-rating non-dependent deductions to reflect increases in rent since 2001/02, in April 2011, and annually on the same basis

• Amending the size criteria to provide an extra bedroom for disabled claimants who have a non-resident carer, from April 2011

• Changing the basis for setting Local Housing Allowance (LHA) rates from the median to the 30th percentile of local market rents, from October 2011

• Up-rating LHA rates by the Consumer Price Index, from April 2013

• Restricting housing benefit for working age social tenants who occupy a larger property than their family size warrants to a standard regional rate for a property of the appropriate size, from April 2013

• Restricting housing benefit to 90% of the full award after 12 months for claimants who are in receipt of Jobseekers Allowance, from April 2013

Mitigating Impacts of Housing Benefit Reform on Our Communities

The government has announced increases in the national Discretionary Housing Payments budget by;

• £10 million in 2011/12• £40 million in 2012/13• £40 million in 2013/14

Local Authorities are encouraged to begin planning for the potential impacts of Housing Benefit reform - what can they do

and what could the impacts look like at a local level?

West Midlands Impacts

From early indications the potential effects of the change from assessing LHA rates from the median to the 30th percentile could be:

• 32% of claimants in the West Midlands region will lose between £10 and £15 per week. (excluding the £15 excess)

• Including the £15 access this figure rises to 52% of claimants

• Only 16% of current housing benefit claimants LHA rates will not be reduced by assessing rates at the 30th percentile in the West Midlands

• DO YOU KNOW ;

• How many households could be facing a reduction in LHA payments in your authority.

• How much each household could possibly lose.

IF NOT WHAT DO YOU PLAN TO DO NOW?

Regional TablesImpact of measures coming into effect 2011-

2012

Estimate of number of

losersAverage loss per loser,

£/week% of national losers figure

National 936,960 -12

London 159,370 -22 17

North West 130,900 -10 14

South East 123,000 -12 13

Yorkshire and the Humber 87,310 -9 9

South West 83,180 -10 9

West Midlands 80,140 -10 9

East of England 70,970 -10 8

East Midlands 58,680 -10 6

Scotland 49,730 -10 5

Wales 48,530 -9 5

North East 45,160 -9 5

Removal of £15 excess – Distribution of losses

Percentage (%) of LHA recipients

Not losing

Losses of £0-£5

Losses of £5-£10

Losses of £10-£15

Losses of £15-£20

Losses of £20-£30

Losses of £30-£40

Losses of over £40

East Midlands 57 8 7 28 0 0 0 0

East of England 57 6 7 30 0 0 0 0

London 48 5 5 42 0 0 0 0

North East 54 10 9 26 0 0 0 0

North West 51 10 8 31 0 0 0 0

Scotland 49 5 9 36 0 0 0 0

South East 52 4 7 36 0 0 0 0

South West 56 7 9 28 0 0 0 0

Wales 61 8 8 23 0 0 0 0

West Midlands 52 7 8 32 0 0 0 0

Yorkshire and Humber 59 8 8 24 0 0 0 0

30th Percentile - Impacts

Estimate of

number of losersAverage loss per loser,

£/week% of national

estimated losers

North West 114,180 -7 15

London 113,330 -17 15

South East 96,300 -9 12


South West 70,430 -8 9




Wales 43,270 -8 6

Scotland 40,420 -7 5

North East 39,890 -7 5

National 774,970 -9

30th Percentile - losses

Percentage (%) of LHA recipients

Not losing

Losses of £0-£5

Losses of £5-£10

Losses of £10-£15

Losses of £15-£20

Losses of £20-£30

Losses of £30-£40

Losses of over £40

East Midlands 12 26 39 17 6 0 0 0

East of England 16 17 41 22 2 2 0 0

London 29 5 22 21 3 11 7 3

North East 12 14 60 14 0 0 0 0

North West 13 21 38 26 2 0 0 0

Scotland 21 16 47 12 1 2 0 0

South East 22 7 36 29 5 1 0 0

South West 15 12 51 20 1 1 0 0

Wales 11 25 43 20 1 0 0 0

West Midlands 16 16 42 25 1 0 0 0

Yorkshire and the Humber 10 20 50 18 0 0 0 0

Removal of £15 excess

Estimate of number of losers

Average loss per loser, £/week

% of national losers estimate

London 82,640 -13 100

North West 64,580 -11 78

South East 58,650 -12 71


South West 36,680 -11 44



Scotland 26,040 -12 32


North East 20,650 -10 25

Wales 19,070 -10 23

National 438,130 -11

Planning for Reform

It is important that homelessness and housing options services take the initiative in positioning themselves to respond at the earliest opportunity. Where it may be necessary to source alternative accommodation for households, maximise the potential to prevent homelessness by identifying and strategically targeting those affected before their accommodation becomes unsustainable.

Identifying key partners and building or maintaining relationships now, is a

further crucial aspect of delivering an effective response to significant changes to the Housing Benefits scheme in England.

Practical Ways Forward

1. Provide training for members and front line staff (including partner agencies) regarding the package of measures and the local response

2. Talk to your Housing Benefit Department

3. Talk to your local PRS landlords

4. Talk to Housing Management and Partner RSLs

5. Talk to Money Advice/Debt Counselling Services

6. Talk to Job Centre Plus

7. Talk to Tenants

8. Work with Partners

9. Share best practice!

Further Information

A full summary of the changes announced in the Budget on 22 June 2010 is given in the July issue of Housing Benefit Direct (Issue 103, July 2010):

http://www.dwp.gov.uk/docs/issue-103-july-2010.pdf

The Valuation Office Agency has published a table providing indicative figures showing how the planned changes announced on 22 June could affect Local Housing Allowance rates:

http://www.voa.gov.uk/LHADirect/LHA-emergency-budget-news-2010.htm

Further information is available from DWP, including excel tables outlining anticipated impacts of the proposed changes:

http://www.dwp.gov.uk/local-authority-staff/housing-benefit/claims-processing/local-housing-allowance/impact-of-changes.shtml

Directgov summary of the government’s emergency budget in June:http://www.direct.gov.uk/en/Nl1/Newsroom/Budget/Budget2010/DG_188506

Questions?

Download - Homelessness Prevention: Preparing for Changes to Housing Benefit

Top Related