Written evidence submitted by Citizens
Advice Northern Ireland
EXECUTIVE SUMMARY
- Local Housing Allowance needs to be maintained
at the median market rent in order to prevent rent arrears or
at worst homelessness.
- Increasing non dependent deductions will exclude
many households from housing benefit and provide a disincentive
for sharing accommodation.
- Penalising under occupation in the social rented
sector will lead to tenants being unable to manage their rent
and have to apply for smaller dwellings which are not readily
available.
- Cutting housing benefit for jobseekers allowance
claimants will lead to further housing debt particularly in areas
of high unemployment.
- While discretionary payments will be increased
this method of housing assistance is not sustainable long term.
RESPONSE
From October 2011, Local Housing Allowance rates
will be set at the 30th percentile of local rents (instead of
the 50th percentile).
Currently this does not affect clients in Northern
Ireland as the rent is worked on the basis of a median market
value. This is a considerably fairer system as the Northern Ireland
Housing Executive base the rent figures on the average private
letting rate. If these proposals were extended to Northern Ireland
they would be likely to cause problems with benefit shortfall
across the private rented sector. Those in the sector claiming
housing benefit are in many cases already having to pay shortfalls
of rent from their own benefit. Tenants who continue to get into
housing arrears because they cannot afford the balance of their
rent are at risk of eviction and homelessness. To base local housing
allowance on the bottom third of local rents will increase the
number of housing benefit claimants having to claim discretionary
payments and meet remaining shortfalls from their own benefits
payments.
Deductions for non-dependants will be uprated
in April 2011 on the basis of prices. This will reverse the freeze
in these rates since 2001-02
Citizens Advice recognises that the deductions for
non dependents are necessary to ensure other householders make
a contribution for their housing costs. However, it has not yet
been detailed as to how the increases will work and if they are
significantly increased many housing benefit claimants may be
excluded from benefit altogether. This again will result in benefit
claimants having to meet the shortfall in rent from their own
income and could lead to a disincentive in sharing accommodation.
This is also likely to lead to rent arrears and potential under
occupation where non dependents vacate the property.
From 2013-14, Local Housing Allowance rates will
be up-rated in line with the Consumer Price Index (CPI)
At present it is not known if these changes would
be extended to Northern Ireland. However, if this was to be introduced
it would likely result in a reduction in affordable private rented
stock where LHA will be able to meet eligible housing costs. In
turn this will inevitably lead to more arrears and applications
for discretionary payments. It is not yet known how CPI uprating
would work in conjunction with the 30th percentile of local rents.
If the amount of LHA is calculated on the basis of CPI instead
of local market rents then it will certainly lead to LHA rates
not keeping pace with actual market rents. The effects on benefit
claimants will be felt badly across the UK as a whole and will
again result in housing arrears, shortfalls and homelessness.
Landlords may in turn be unwilling to rent property to benefit
claimants and many tenants will then struggle to find accommodation.
From April 2013, housing entitlements for working
age people in the social sector will reflect family size
From our understanding, this will result in social
tenants being penalised financially for under occupation. They
will be faced with a reduction in benefit or having to move from
their property to a smaller dwelling. Many social rented houses
in Northern Ireland are standard three bedroom units with fewer
dwellings of one or two bedrooms (many of which are restricted
to older people or people with disabilities). According to the
most recent House condition survey; 60% of properties in the social
rented sector were under-occupied. The scale of this to working
age tenants is likely to be less; however it is likely to lead
to the same problems with arrears in rent, shortfalls in benefit
and a greater need of allocation to smaller dwellings which simply
are not there.
Housing Benefit awards will be reduced to 90%
of the initial award after 12 months for claimants receiving Jobseeker's
Allowance. This will be introduced in April 2013
Claimants receiving jobseekers allowance are already
affected by shortfalls in housing benefit within the private rented
sector. The situation is not likely to improve as a result of
the current recession with Northern Ireland having a claimant
count of 56,800[231].
It would be unreasonable to impose further cuts at a time where
there are less job vacancies and there are likely to be more people
claiming jobseekers allowance who are no longer eligible for ESA
or incapacity benefit.
From April 2011, Housing Benefit claimants with
a disability and a non-resident carer will be entitled to funding
for an extra bedroom
This has been raised by numerous advisers throughout
the CAB network and is a welcome addition to the Housing Benefit
scheme.
From April 2011, Local Housing Allowance Rates
will be capped at £250 per week for a one bedroom property,
£290 per week for a two bedroom property, £340 per week
for a three bedroom property and £400 per week for four bedrooms
or more
While this will not impact Northern Ireland at this
stage, any introduction of caps may have a long term effect on
Local Housing Allowance in the UK as a whole.
The Government contribution to Discretionary Housing
Payments will be increased by £10 million in 2011-12 and
£40 million in each year from 2012-13
Discretionary Housing Payments are seen as a shock
absorber for many housing benefit claimants. They address housing
arrears, debt and enable tenants to maintain their rent payments
which then prevent eviction proceedings. Bureaux have reported
that many claimants are not aware of their entitlement and only
discover that they can apply for these payments when undertaking
benefit entitlement checks. It is a welcome addition to have these
payments increased. Nonetheless, will they not be used up with
the shortfalls created by the other changes to housing benefit
as highlighted above? The other point around discretionary payments
is that this income is not reliable and is a limited and capped
budget. These forms of payment are not sustainable in the long
term as many claimants will not be able to cope should they cease.
This leaves claimants and landlords with an uncertainty about
how long payments will last.
6 September 2010
231 DETI http://www.detini.gov.uk/statistical_press_release-august_2010-12.pdf. Back
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