Written evidence submitted by Disability
Benefits Consortium (DBC)
EXECUTIVE SUMMARY
1. The Disability Benefits Consortium (DBC) is
concerned that the planned changes to Housing Benefit and the
reductions to Support for Mortgage Interest announced in the June
Budget risk leaving thousands of disabled people facing shortfalls
in their rent or mortgage payments and in extreme cases being
forced to leave their home.
2. The recent report from the Institute for Fiscal
Studies suggests that the cuts announced by the Government will
disproportionately affect the most vulnerable in our society,
which includes those with a disability receiving benefits. Acknowledging
this report in addition to our own concerns, the DBC would urge
a rethink of the measures announced, taking into account the needs
of disabled people.
CONTEXT
3. Many disabled people already face restricted
housing options, in many cases needing adapted properties, with
for example ground floor access, ramps or parking, and accommodation
near to accessible transport and informal support networks.
4. Disabled people are twice as likely to live
in poverty as non-disabled people and face additional costs associated
with their disability. They are also less likely to be in work
than non-disabled people, with just 50% of disabled people in
work compared to 80% of the rest of the population; employment
rates vary further according to impairment, for example, fewer
than 7% of people with a learning disability are in work. Additionally,
once in employment, statistics show that disabled people also
earn less than their non-disabled counterparts. These and other
factors leave many disabled people relying on Housing Benefit
to meet their housing costs.
IMPACT
5. Reducing the amount of financial support available
through Housing Benefit will further reduce the number of suitable
properties affordable to disabled people in receipt of housing
benefit and risks leaving some disabled people living in inappropriate
accommodation and away from their support networks. It also risks
forcing people out of homes that have already been adapted, potentially
wasting scarce public funding allocated through the Disabled Facilities
Grant.
6. The current equality impact assessment looks
only at the number of disabled people likely to be affected and
not at the impact on disabled people in comparison to other groups.
7. Whilst the proposed changes are aimed at reducing
spending we believe that they carry hidden costs that will offset
any reduction in the benefits bill. For example, increased pressure
will be placed on local authorities as many people are left unable
to afford suitable accommodation.
8. The changes are also likely to have an impact
on the future of housing provision in the private rented sector,
with many landlords less likely to be willing to let to people
on benefits. Landlords already associate people on benefits with
rent arrears, and this is only likely to become further pronounced
once the cuts to housing benefit become a reality. This will make
finding suitable housing for those most in need even more difficult
at a time when social housing is under great pressure.
NEXT STEPS
9. The Government needs to build on the existing
equality impact assessment for the changes to Housing Benefit
and take into consideration how the impact will vary for different
groups.
10. The Government also needs to carry out a
further assessment of the projected savings from the proposed
changes to identify whether these are absolute savings or whether
costs are simply being deferred to other bodies and organisations.
11. If the changes were to go ahead the Government
must implement safeguards to ensure disabled people are not disproportionately
affected. These include:
- (a) Recognising that the majority of disabled
people face additional housing costs through the introduction
of a "housing premium" for disabled people. This premium
would be based on the additional housing requirements of disabled
people, such as the need for ground floor access, accessible local
transport or access to informal support from family and friends.
- (b) A gradual transition to the new rates
to help people adjust to the impact these changes will have on
their income.
- (c) Allowing for an extra bedroom in families
with a disabled child. We welcome the announcement made in the
June Budget that from April 2011 Housing Benefit claimants with
a disability and a non-resident carer will be entitled to funding
for an extra bedroom where this is an identified need. We would
now like to also see a concession made to allow an additional
bedroom for an overnight carer for families with a disabled child,
and where the child requires a separate room due to disability-related
needs. Given the already overcrowded conditions that many families
with disabled children live in and the need for more space, for
example, for equipment, this would be a reasonable adjustment
to the policy.
- (d) Ensuring that people who experience additional
barriers to finding employment due to their disability are not
unfairly penalised if their JSA claim exceeds 12 months. We know
that the stringency of the new Work Capability Assessment means
that many more disabled people, some of whom will face significant
barriers to employment, will be receiving JSA. The reality for
some of these people will be that it will take much longer than
12 months to find a job. To ensure that these individuals will
not be unfairly penalised by this policy, one possible option
would be to take an individual's job search record into account,
such as whether or not they incurred any sanctions, before deciding
to impose the 10% reduction.
- (e) A further increase (above the amount
announced in the June Budget) in the Government contribution to
Discretionary Housing Payments to ensure that where necessary
individuals can be supported by local authorities on a long-term
basis.
- (f) A requirement that local authorities
must show that suitable alternative accommodation exists that
meets the needs of the disabled person and that it is reasonable
for them to move before being able to restrict eligible rent from
the 50th to the 30th percentile. This would implement a similar
arrangement to the current housing benefit rules governing pre-1996
tenancies and would recognise that disabled people often have
additional accommodation requirements compared with non-disabled
people (and therefore are restricted as to where they can move
to). This would also mean local authorities exercise responsibility
and consider accommodation needs fully as well as ensuring that
cheaper suitable alternative accommodation is available. This
rule applies to people who have been continuously receiving HB
for the same accommodation before January 1996 and are in a "protected
group" (at least the qualifying age for pension credit; or
satisfying any of the tests for being incapable of work or having
a limited capability for work; or have a child living with them
for whom the are responsible) and therefore offering greater security
for some citizens.
12. Although
not part of this consultation, the DBC would also like to highlight
our concerns at the reduction in Support for Mortgage Interest
(SMI) payments announced in the Budget and laid down in regulations
on 20th July without further public consultation.
13. According to the explanatory memorandum to
the regulations only 50% of those claiming SMI will have all of
their mortgage interest payments covered in the future. The rest
of those claiming SMI will face a shortfall in their mortgage
payments of at least 10%, with some experiencing a shortfall of
more than 40%.[55]
14. The National Housing Federation has suggested
that there are currently 64,000 disabled people receiving SMI
who could potentially be put at risk of arrears and homelessness
due to the changes in SMI payment.
15. The purpose of the proposed changes is to
prevent people receiving "over payments" on their mortgage.
However, simply lowering the rate paid by the Government will
not in itself address this and will in effect threaten the provision
of mortgages for those with long-term disabilities. Already, providers
of HOLD (Home Ownership for people with Long term Disabilities)
schemes are withdrawing from the market as a result of the changes
in SMI and the Local Housing Allowance.
16. The DBC believes that the Government needs
to look at more comprehensive reform of SMI. One possible option
would be to set SMI at the rate that an individual's mortgage
is set, as long as the mortgage terms are reasonable (for example,
over 20 years). This would mean that financial support offered
through SMI would directly match an individual's mortgage costs.
To ensure SMI payments reflected any change in mortgage rates
we would suggest that it should become the responsibility of banks
to provide documentation of mortgage rates to the DWP on a 6-monthly
basis, and repay any overpayments directly to the DWP.
17. The Government also needs to take action
to ensure that changes to SMI do not make it harder for those
on benefits or low incomes to secure mortgages. We would like
to see the Government work with banks, in particular those it
supported through the recent recession, to ensure access to good
quality mortgage products for those on benefits or low incomes.
18. The
Disability Benefits Consortium would welcome the opportunity to
expand on our concerns in more detail.
3 September 2010
55 Explanatory Memorandum to the Social Security (Housing
Costs) (Standard Interest Rate) Amendment Regulations 2010, p
3. Back
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