WIDER POLICIES
Commentary on Housing Benefit Policy

Although Housing Benefit reform has been on the agenda of many organisations working with the homeless for many years, it is often given a low priority in their campaigning.  In part, this may be because it is a technical subject, where it is difficult to come up with headline-grabbing recommendations.  However, while this makes it more difficult to create a groundswell of opinion in favour of reform, it does not make the subject any less important and, indeed, changes to the detailed rules of Housing Benefit could have a major favourable impact on single homelessness.

Housing Benefit reforms for the private rented sector have been outlined in the January 2006 welfare reform Green Paper, and a Housing Benefit Bill is expected.  Although reform is to be welcomed, many problems remain and it is crucial that homeless organisations are involved in ensuring that reforms go further, to make the significant impact on alleviating homelessness that they have the potential to.

The overall conclusion is that organisations working with the homeless should take advantage of this opportunity to (once again) press the government to ensure that the Housing Benefit system fully meets the needs of single homeless people and people who are at risk of homelessness.

In this context, a number of specific policy recommendations of particular relevance to single homeless people are set out below.

The new Local Housing Allowance should not include a specific restriction of single people under the age of 25

It is generally agreed that levels of Housing Benefit should reflect the market rents of reasonable accommodation.  Whilst there does not appear to be any authoritative research into the adequacy or otherwise of the levels of Housing Benefit for those aged under 25 who come under the Single Room Rent restriction, evidence of the general shortfalls in Housing Benefit, combined with the dramatic fall in the number of young people in deregulated private rented accommodation since the introduction of the Single Room Rent restriction, suggests that there is currently a major problem, particularly in areas of high housing demand.

The new Local Housing Allowances will perpetuate this problem as their current formulation envisages a lower allowance for single people aged under 25.  But the introduction of this new system also provides an obvious opportunity for addressing the problem, by simply removing the two-tier system before the nationwide rollout.

In 2000, Shelter estimated the cost of abolition of the Single Room Rent restriction to be around £25 million per year.^[1]

Current non-dependent deductions should be reviewed

The basic rationale for non-dependent deductions is to save Government money.  But if its effect is to put pressure on young people to leave home and either claim Housing Benefit elsewhere or to become homeless, then its effect might be precisely the opposite.  This alone should be reason enough to review current arrangements.  When combined with the resulting disincentive to work, plus the additional pressure on an already stretched housing market, the case for review becomes overwhelming.  The obvious options here are to abolish the non-dependent deduction altogether, or to introduce a flat rate, acknowledging that working non-dependents should be expected to contribute something towards housing costs.

The recently introduced benefit extensions should be widened

By introducing a benefit run-on scheme, the Government recognised that the current system can act as a disincentive to work.  While this may help those who have been unemployed for a long time and are seeking permanent employment, it is much less clear that it fully addresses the needs of people who have gaps in their claims for out-of-work benefits nor the needs of those who are seeking casual work - both patterns being common among homeless people.  We therefore suggest that the benefit extensions are further widened both to cover those starting work who have been on Income Support or JobSeeker's Allowance for four weeks (rather than six months, as currently) and to remove the five week minimum job duration condition.

The Pivot Initiative estimated that the cost of widening benefit extensions would be around £25 million per year.^[2]

The first Housing Benefit payment should - at least in part - be paid in advance

Instead of Housing Benefit payments always being made in arrears, with particular uncertainty about the timing of the first payment, this first payment could be paid in advance, or part in advance and part in arrears.  Some local authorities already operate in such a way.  In addition to improving access, research suggests that this would simplify Housing Benefit administration, improve security for landlord and tenant, and help prevent people getting into debt.^[3]_. 

The 16-Hour rule should be abolished

One of the Government's stated objectives is to improve access to further education for disadvantaged groups.  But, with many homeless people lacking qualifications, and with many of these deterred from studying because they will lose their entitlement to benefit, it is clear that the current 16-hour rule is pushing people in the opposite direction.

The Foyer Federation report 'The 16 hour rule - past its sell by date?' estimated that removing the 16-hour rule would increase the number of students from disadvantaged backgrounds in higher education by around 9%^[4].

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End notes

[1] Figures attributed to Shelter in  Chartered Institute of Housing: Evidence to the Social Security Commission Inquiry on Housing Benefit Reform, February 2000.Back to text 

[2] The Pivot Initiative, 2001.  Back to text

[3] More hope for Housing Benefit, The Pivot Initiative 2003. Back to text

[4] The 16 hour rule - past its sell by date, Foyer Federation, 2003.Conclusion Back to text

Page last modified on 21/06/2006 at 12:24