Local Housing Benefit cap delayed for a year


The government has announced that it is delaying its plans to cap the amount of Housing Benefit for new social tenants to the relevant Local Housing Allowance rates. This would mean social sector tenants in supported accommodation would have their housing benefit paid in line with private sector tenants who receive the same benefit.

Local Housing Allowance rates to assess Housing Benefit for social tenants in supported accommodation would will still come into force from April 2018. However, the planned measure will now apply to social tenants who sign a new or re-let tenancy agreement from April 2017, rather than from April 2016.

The government will also review the capping policy as part of its supported housing research programme.

The announcement to move the capping measure to new or re-let tenancies from April 2017 was made in a recent ministerial statement just a month before the changes, which were originally unveiled by the Chancellor George Osborne in the Autumn Statement in November, were due to come in to effect.

Housing associations and charities had warned that the move would put thousands of tenants in supported accommodation at risk of losing their homes. These include refuges for those fleeing domestic abuse, homeless provision, housing for ex-offenders, as well as supported housing for disabled people and older people.

The Chancellor had argued that capping local rates of Housing Benefit for social homes to bring it in line with private rents was a way to prevent social landlords from charging inflated rent for their properties.

The Chancellor's latest announcement comes weeks after the Department for Work and Pensions (DWP) dismissed housing associations’ concerns over the caps as scaremongering.

‘Substantial uncertainty remains’

In response to the announcement, the National Housing Federation said: “The continued threat that a Local Housing Allowance (LHA) cap might be imposed in the future means substantial uncertainty remains. The best way to end the uncertainty is to remove that threat. We must make sure that the crude LHA cap does not play a part in the outcome of the review, and that the review delivers long-term stability and security for the sector.”

Focused support for the most vulnerable

In a written statement to the House of Commons, Justin Tomlinson, the Minister for Disabled People, said: “I understand the importance of ensuring that those living in supported accommodation and those who provide this type of accommodation receive appropriate protections.

“This is why we are waiting the outcome of a supported research project and subsequent policy review, to ensure support is focused on the most vulnerable and appropriate groups are safeguarded.”

For further guidance, see the Government statement on Housing Benefit for social sector tenants in supported accommodation (PDF file size: 78.7).

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