Thirteenth Report
Instrument Drawn To The Special Attention
Of The House
The Committee has considered the following instrument
and has determined that the special attention of the House should
be drawn to it on the ground specified.
Housing Benefit (Amendment) Regulations 2009 (SI
2009/614)
Summary: These Regulations alter the basis on
which Housing Benefit is calculated to make the five bedroom rate
the maximum payable for all new claimants and those who move address
from 6 April 2009. Existing claimants will be protected for 26
weeks from the date the new rate applies to their claim. The Social
Security Advisory Committee and other consultees agree that there
is a problem where excessive rents are being claimed for large
houses, but are not convinced that the five bedroom cap is the
best solution, and suggested alternative methods of limiting payment
according to need. The Merits Committee would like to have seen
DWP give a more thorough analysis of the various options and the
advantages and disadvantages of each. The House may wish to press
DWP to set out more clearly its arguments for adopting this particular
approach and how the reasonable requirements of the estimated
5000 families who will be adversely affected by the change are
to be met.
These Regulations are drawn to the special attention
of the House on the ground that they give rise to issues of public
policy likely to be of interest to the House.
1. The Department for Work and Pensions (DWP)
has laid these Regulations under the Social Security Contributions
and Benefits Act 1992 together with an Explanatory Memorandum
(EM). The Social Security Advisory Committee (SSAC), a statutory
consultee, has also published its comments in a report laid alongside
the instrument (Cm 7571).
2. In its 4th report of this session the Committee
drew attention to the Rent Officers (Housing Benefit Functions)
Amendment (No.2) Order 2008 (SI 2008/3156) which sought to restore
the way that Broad Rental Market Areas are constructed for the
purpose of setting Housing Benefit rates for claimants living
in privately rented accommodation following a House of Lords judgment
in Heffernan v the Rent Service. This instrument adds to
the debate around DWP's current approach by capping the payments
that can be made at the five bedroom rate.
3. The original Housing Benefit Regulations 2006
(SI 2006/213) make provision for a person's entitlement to be
calculated using a maximum rent determined by the rent officer
in accordance with the Rent Officers (Housing Benefit Functions)
Order 1997. The rent officer arrangements apply to de-regulated
tenancies in the private rented sector. For claims made in respect
of relevant tenancies after 7 April 2008 the maximum rent is the
Local Housing Allowance (LHA) determined by the rent officer for
the Broad Rental Market Area (BRMA) in which the property is situated.
A BRMA is defined as an area in which people live and enjoy a
range of health, educational, recreational, banking and retail
services. Rent officers collect market evidence of rents in these
areas and then set rates for a range of property sizes up to five
bedrooms. The LHA rates are set at the median level for each property
size so that around 50% of the rental market should be affordable
for people claiming Housing Benefit. The rates are reviewed and
published monthly so that prospective tenants know the levels
of rent which will be met by benefit. LHA rates for properties
with six or more bedrooms are provided to local authorities on
request.
4. The Housing Benefit regulations specify the
number of bedrooms that a household requires and provide for the
maximum Housing Benefit to be the lowest of either the applicable
LHA or the actual rent (less any items which are ineligible such
as heating costs) plus £15. There is currently no limit on
the number of bedrooms a claimant may be entitled to and be covered
by the LHA. The amendment regulations have the effect from 6 April
2009 of making the five bedroom LHA rate the maximum payable for
all new claimants and those who move address. Existing claimants
will be protected for 26 weeks from the date the new rate applies
to their claim.
5. While all consultees agreed that there are
a number of cases in which the system is currently paying excessive
amounts of benefit to pay rent for houses that an ordinary person
in well paid work could not afford, there is a range of views
as to how this problem should be addressed. There are concerns
that the proposed five bedroom limit does not allow for a large
family's actual needs to be taken into account according to the
normal criteria used (e.g. one bedroom for every adult couple,
other adult over 16, any two children of the same sex, two children
under age 10 regardless of sex or any other child). The DWP's
own Equality Impact Assessment included in the SSAC report (CM
7571, pages 32-42) acknowledges that this policy will impact more
on large families, particularly those from ethnic minorities which
are more often multigenerational. Paragraph 7.3 of the EM sets
out DWP's view of how these disproportionate effects may be mitigated.
The SSAC raised further questions, including how this proposal
interacts with the Government's child poverty objectives as it
may cause overcrowding or families being split between more than
one house (Cm 7571, pages 18-21). The SSAC was concerned that
the Regulations were not based on sufficiently robust evidence
and were "an over-hasty, and disproportionate response
to a relatively small-scale problem. In addition, the potential
impacts of the proposed changed did not seem to have been properly
thought through" (page 15), and did not support the Regulations.
6. The consultation exercise was limited to 6
weeks (shorter than the normal period). There was a general view
amongst the 27 respondents that the policy proposed was a disproportionate
response to the problem. Consultees such as Shelter and the Citizen's
Advice Bureau suggested alternative methods of limiting payment,
but, although DWP make some attempt to address these counter proposals
in the EM, the argument made is rather cursory. The Merits Committee
would like to have seen a more thorough analysis of the various
options and the advantages and disadvantages of each. The House
may wish to press the DWP to set out more clearly its arguments
for adopting this particular approach and how the reasonable requirements
of the estimated 5000 families who will be adversely affected
by the change are to be met.
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