Housing Benefit has traditionally played an important role in preventing homelessness. It has saved people from losing their homes during a period of illness or unemployment.
However, we are concerned that government reforms to Housing Benefit are weakening this safety net. Many of these reforms haven’t taken into account what accommodation is available and how much it costs. This means that in many parts of the country, Housing Benefit no longer covers the cost of renting. This is having a significant impact on homelessness.
Over the next few years Housing Benefit will gradually be replaced by the UK Government’s new benefit system, Universal Credit. In Scotland, the government has gained some powers over housing costs paid through Universal Credit.
What needs to change
Across Great Britain we are calling on the government to:
- Reconsider how they calculate Housing Benefit for people renting from private landlords so it covers people’s rent in all parts of the country. Read more about Local Housing Allowance.
- Make more shared accommodation available or rethink the rules about how much Housing Benefit under 35 year olds can get. Read more about the Shared Accommodation Rate.
- Look at the impact of the benefit cap on homelessness. Read more about the benefit cap.
- Ensure the right financial support is available for homeless people in the wait before they receive their first Universal Credit payment. Read more about Universal Credit.
Local Housing Allowance
Local Housing Allowance is Housing Benefit paid to people who rent from private landlords.
In recent years the government has changed the way it calculates Local Housing Allowance, meaning it is no longer set in relation to actual market rents. This has included freezing Local Housing Allowance rates at their current level until 2020. Rents are rising in many parts of the country. This means more and more people now have a shortfall to pay or are unable to find a home to rent that they can afford.
We are calling on the government to reconsider how they calculate Local Housing Allowance so that it covers people’s rent in all parts of the country. We collect evidence, published in the Homelessness Monitor, on the impact of Housing Benefit reform on homelessness and work with MPs and peers to raise these issues in parliament.
Shared Accommodation Rate
The Shared Accommodation Rate is the lowest level of Housing Benefit for people who rent from private landlords. It is intended to cover the cost of a room in a shared property.
Changes to Housing Benefit rules mean that more people are restricted to this very low rate. In 2012 the Westminster Government increased the upper age limit from 24 to 34. This puts pressure on a very limited supply of affordable shared properties. As a result, homelessness services across the country are finding it difficult to house homeless people under 35.
Some people are exempt from the Shared Accommodation Rate, including some people receiving disability benefits. We want the Westminster Government to extend these exemptions to make sure the Shared Accommodation Rate does not make it harder for homeless people to find a secure and stable home, or put people at risk of homelessness.
Our Sharing Solutions programme has funded projects which support people in shared accommodation rented from private landlords. We support local authorities and housing associations with practical advice on how they can support shared tenancies. Visit our Housing Centre for more information.
The benefit cap limits the overall amount that people can claim if they’re unemployed by reducing their Housing Benefit. In 2016 it was reduced further therefore affecting smaller households (including single people) and more people outside London. Given that it will affect more people, we are concerned the cap will have a greater impact on homelessness. We will be monitoring the impact of the cap, including through the Homelessness Monitor.
We want the Westminster Government to do the same, and to rethink the policy if it leads to increased homelessness. We think this should include lifting the cap for some people where it is increasing the risk of homelessness, so they can be supported to stabilise their housing and find a job if suitable. People should get help to find cheaper accommodation or a job, not just have their benefits taken away.
By 2022, Housing Benefit will be rolled into Universal Credit. This is happening gradually, and more people are already receiving it.
Universal Credit means people will receive all their benefits in one monthly payment, including the payment intended to cover their rent. We support the government’s aim of simplifying the benefits system through Universal Credit. But we are concerned that some people are getting behind on their rent.
We are calling on the Westminster Government to ensure the right financial support is available for people experiencing homelessness in the wait before they receive their first payment.
We also want the government to make sure Universal Credit is a way to support people experiencing homelessness, or those at risk of it, to be financially stable in the long-term.
Read more about our work on Universal Credit.