Written evidence
submitted by Citizens Advice Scotland (CAS)
SUMMARY
- — Benefit
claimants seeking employment will be penalized as those who are
unable to find work within a year will see their housing benefit
entitlement reduced further. This is particularly hard hitting
for clients when the unemployment rate in Scotland is rising and
currently stands at 8.6% of the working age population.
- — As
a result of the announcements in the June 2010 budget, Local Authorities
across Scotland will be paying £26 million less to eligible
housing benefit claimants.
- — From
October 2011 current housing benefit claimants will have to cope
with a sudden and extensive drop in their monthly income which
will lead to issues in making essential payments such as rent.
There is potential for a number of people to be made homeless.
- — Eligible
claimants will be worse off by an average of £40 a month.
The changes will be more detrimental to the financial well being
of families who need a larger place to live in.
- — Non-Dependent
Deductions (NDD) in housing benefit will also increase, leading
to rent issues where non-dependents have refused or are unable
to pay rent to cover the larger deduction in housing benefit.
NDDs already create tension in some families, resulting in pressure
on the non dependent to move out of the family home.
INTRODUCTION
1. Citizens Advice Scotland and its CAB offices
form Scotland's largest independent advice network. Citizens Advice
Scotland (CAS) is the umbrella organisation for Scotland's network
of 83 Citizens Advice Bureau (CAB) offices. These bureaux deliver
frontline advice services throughout nearly 200 service points
across the country, from the city centres of Glasgow and Edinburgh
to the Highlands, Islands and rural Borders communities.
2. There are 2,200 volunteers in the service
who provide almost 13,000 hours of their time each and every week.
Paid staff provide a further 15,200 hours of work each week in
management, support, administration and specialist advice work.
3. There are citizens advice bureaux in 30 of
the 32 local authorities in Scotland, making the network the only
independent advice body in the country with truly national on
the ground coverage.
4. New and existing service users brought nearly
550,000 issues to bureaux throughout 2009-10—45,000 more
issues than the previous year. These issues mainly concerned benefits
and debt, but also included many other issues concerning housing,
consumer issues, relationship problems, legal issues, and problems
with utility suppliers.
5. A survey by Ipsos MORI in 2009 found that
clients have a highly positive view of the services offered by
citizens advice bureaux. The survey found that:
- 98% felt able to trust the service and were satisfied
with the service provided
- Nine out of 10 would use the service again.
- 85% agreed that the Scottish CAB service was
the "leading advice agency in Scotland".
BENEFITS IN
SCOTLAND:
6. In 2009-10, citizens advice bureaux in Scotland
dealt with188,969 new benefit issues for clients—just over
a third of all issues brought to bureaux. That is over 500 new
benefit issues for every day of the year. Bureaux helped clients
with 27% more benefit issues in last year than in 2008-09, showing
the significant effect that the recession had on the demand for
advice and the efforts of bureaux in responding to this demand.
7. Welfare advice makes up a significant proportion
of client concerns and adviser workloads. Figure 1 outlines the
10 most common benefits addressed in client concerns:
Figure 1
TOP 10 BENEFITS
9. Bureaux provide advice on many areas of the
benefit process, including advising on entitlement, helping with
the claiming process, advising and providing representation in
appeals, and dealing with payment and administration problems.
10. Figure 2 shows the main areas of benefit
advice, indicating that the majority of benefit enquiries concern
entitlement and help with the claiming process. However, a significant
number of issues concerned possible problems in the administration
of benefits, including appeals, payment problems, and overpayments.
HOUSING BENEFIT
CHANGES
A Scottish Perspective
11. In 2009-10, bureaux across Scotland dealt
with just under 15,000 new enquiries relating to Housing Benefit.
Almost 10% of all benefit issues brought to bureaux relate to
Housing Benefit, making it the second largest overall benefit
enquired about by clients.
12. June's emergency budget announced by the
Chancellor contained some severe cuts in Housing Benefit. The
Budget reveals that from October 2011 Local Housing Allowance
(LHA) will be set at 30% of local rents. It is currently set
at the median of local rents. This means that in any given
area the amount available to pay for housing for eligible claimants
will fall significantly. 5.4% of the UK households who will be
impacted by these changes live in Scotland.
13. Evidence from DWP's "Impact of Housing
Benefit Proposals"[285]
report suggests that 97% of LHA claimants in Scotland will be
worse off by an average of £10 per week. Nearly 50,000 households
in Scotland will be over £500 worse off a year as a result
of these changes. In total almost £26 million less in LHA
will be paid in Scotland each year. The impact of the LHA changes
varies by local authority area and by housing size. For example,
LHA claimants in Glasgow claiming for a four bedroom property
will receive £35 less a week or £1,820 less a year.
Claimants with one bedroom properties will be less severely affected
by the changes.
14. The lack of transitional protection means
that these caps will be applied to the existing claims on their
next annual review, meaning that some tenants will suddenly find
that their rent is completely unaffordable.
15. The City of Edinburgh is in the top ten cities
in the UK that will be affected by Housing Benefit changes with
9,660 households worse off as a result.[286]
These cuts will leave tenants falling into rent arrears and increasing
debt or being forced to leave their homes and at worst becoming
homeless not just in Edinburgh but across Scotland. This will
in turn increase the pressure on bureaux in Scotland as more people
come in to seek advice in dealing with housing issues, homelessness,
and debt.
JSA claimants and housing benefit cuts
16. Jobseekers Allowance claimants who are in
receipt of Housing Benefit will also be penalised. From April
2013 after they have been claiming JSA for a year they will have
their Housing Benefit entitlement cut by 10%—presumably
meaning that they have to move house, become homeless or pay the
rent deficit from their £65 a week JSA.
17. There were over 9,700 JSA enquiries in bureaux
last year with unemployment still rising and currently standing
at over 223,000 people in Scotland. JSA claimants make up 4.4%
of the population in Scotland compared to 3.8% for the whole of
the UK. The unemployment rate is now at 8.6%, compared with 7.6%
for the UK. With unemployment proportionally higher in Scotland[287],
Housing Benefit award changes will impact harder on Scottish claimants
than the rest of the UK, as the pressure of making up 10% of their
rent will plunge many of those claimants into financial hardship.
18. These financial restrictions will apply even
where the tenant is fully complying with their JSA requirements
to actively seek work. The cut will fall hardest on those who
face disadvantage in the labour market, such as people in poor
health or with a disability who have failed the medical tests
for incapacity benefit and employment and support allowance, and
have therefore been moved onto JSA. It will also affect lone parents
who will have to claim JSA when their youngest child reaches five
years old. Although these clients are permitted to restrict their
job search to fit with school hours, the restricted availability
of these jobs may mean that they are more likely to stay on JSA
for a longer period than other types of claimant.
Non-Dependent Deductions (NDD) and housing
benefit changes
19. The Chancellor also announced that the non-dependant
deductions (NDD) component of housing benefit is to increase.
If a tenant has a non-dependant living with them who is 18 or
over (typically an adult son, daughter or elderly relative), a
fixed amount is deducted from the tenant's housing benefit as
the expectation is that the non dependent will pay a portion of
the rent. There are six separate rates of NDDs depending on the
earnings level of the non dependant. These rates, which have been
frozen since 2001, range from £7.40 to £47.75 a week—therefore
the higher the income of the non-dependent, the larger the deduction
in housing benefit received by their housing benefit claimant.
20. From April 2011 there will be staged increases
in NDDs to bring them up to the level they would have been had
they been fully up-rated since 2001. Consequently, housing benefit
claimants living with a non dependent will have a larger deduction
made on their housing benefit.
21. NDDs are complex both to administer and to
understand, and are perceived as unfair as they are applied at
the same rate regardless of the rent due. Non payment by the non-dependant
is common, resulting in rent arrears. This in turn can cause relationship
issues, and put pressure on non-dependants to move out of the
family home.
CONCLUSION
22. Details on the impacts of the changes to
housing benefit will become apparent over the next few months,
but it seems highly likely that they will lead to LHA recipients
being marginalised into unfit accommodation in the poorer areas,
or to it being impossible for families to be accommodated at all.
The housing benefit proposals set out in the June budget do not
fully take into account the different demographics of Scotland
and the devolved aspects of housing benefit reform, such as the
key policy areas of homelessness, debt and social services. Any
changes to Housing Benefit must factor in a Scottish perspective
and the impact on devolved legislation.
18 October 2010
285 Impacts of Housing Benefit proposals: Changes to
Local Housing Allowance to be introduced to 2011-12 (DWP July
2010). Back
286
Crisis-http://www.crisis.org.uk/pressreleases.php/403/new-figures-reveal-areas-hardest-hit-by-housing-benefit-cuts. Back
287
ONS - http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=15084. Back
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