‘Affordable’ Rent and the Benefits System

The affordable rent prospectus came out yesterday – there’s a lot in it and housing associations and councils will be hanging on every word to see what the new regime actually means for them.

One of the things they’ll be grappling with is how the new benefits system interacts with the new higher rents.

I blogged here that I doubted that the benefits system would allow people to pay 80% of market rent in London and other more expensive cities. Steve touches on it in his previous post. That is increasingly clear for those housing associations and councils that are doing the sums.

But it’s interesting how a new logic is entering the system.

There will be a new benefits cap of £500 on the Universal Credit when it comes in after 2013. This will apply to workless families only. For many families and those living in more expensive areas of the country they will have to move out to cheaper areas to still be able to afford their housing.

However, this cap will be lifted for those families entering work. For an individual this will be someone working more than 16 hours a week. For a couple, this will be more than 24 hours a week.

So those in work will potentially be able to claim more benefit than those out of work. Rather than working 16 hours a week being a cut off point for some benefits, it is the way to claim  more benefit and potentially allow people to live in ‘affordable’ housing in more expensive areas. 

Work, not need, then is the route to state help and in this case being able to afford the new ‘affordable’ rents.

This is a move consistent with the cross-party consensus that people should be better off in work than in out.

However, in an economy which has 2.5million unemployed and isn’t growing or creating jobs, the principle of compelling people into work falls flat. Where is the work for them to be compelled into?

Secondly, there are a myriad of problems with how this will operate in practice. One example: if you are in work and you lose your job, when does the benefits cap kick-in? How long will you have to find cheaper alternative accommodation within the limited social and ‘affordable’ stock? How will it help those who lose their job find an alternative as they rack up rent arrears and may be forced to move home, just at the time when they need to concentrate most on finding employment?

It’s another example of where IDS’s welfare agenda is crashing unpredictably against Shapps’ housing agenda. For either agenda to work, they must work together. And that too is a lesson for Labour as we formulate our future plans.

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3 Responses to ‘Affordable’ Rent and the Benefits System

  1. Pingback: Godzilla versus King Kong: the new Affordable Rent model versus the new Housing Benefit regime | Red Brick

  2. Robert says:

    Between New labour and the Tories.

    I’m classed as Paraplegic but under the new rules I’m fit to go onto JSA

    Regulations for the new, harsher work capability assessment (WCA) for employment and support allowance (ESA) were laid before parliament on 10 February and will come into force on 28 March 2011. They will lead to many tens of thousands more sick and disabled claimants being found fit for work and have deliberately been introduced in time to reduce the number of successful transfers from incapacity benefit to ESA.

    The revised WCA will make it easier with some people with mental health conditions and cancer to get into the support group.

    But it will also mean blind claimants who can get around safely with a guide dog will be forced onto jobseekers allowance, as will deaf claimants who can read and write.

    Claimants who can’t walk but who can use a manual wheelchair will no longer score points.

    In addition, references to hands have been removed from the picking up activity specifically in order to make it harder for amputees to score points.

    Some activities have simply been cut from the test altogether. For example, the activity of ‘Bending and kneeling’, for which 30 points are currently available, is to be completely done away with for ‘health and safety reasons’ as people should not ‘bend forward when lifting’.

    Half of all the scoring descriptors for mental health and learning difficulties have also been axed, making it much harder to get onto ESA for people with conditions such as depression or anxiety.

    You can read more about the effects of the harsher WCA in an article we first published in April 20101: Benefits and work

  3. shodanalexm says:

    Good points – although I’m not sure I’d describe the situation as the two systems “crashing unpredictably”. As soon as the plans in the two areas were outlined it was evident that they weren’t going to mesh together very well and a nasty mess that impacts negatively on the well-being of disadvantaged households was going to result.

    The point about the treatment of people who lose a job could be a good one to focus on because that seems to me to be one that would appeal more to the government’s priorities. I’m not sure they are so bothered about the continuing unemployed.

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