Housing Benefit Cuts

Before we start I want to give you the facts about this particular cut. There was an enormous amount of propoganda around when this cut was announced. They gave various examples of HB claimants receiving obscene amounts, well above £21,000 a year, for help towards their rent. Certain newspapers ran stories of mostly immigrants living in mansions that “hard working people can only dream of”. I scratched my head because that’s not my experience at all, and I’m certain it’s not the experience of most claimants. They are proposing to change the rate of LHA from the median rent in an area, to the 30th percentile of private rents. It is hard enough as it is to find a landlord who will accept HB, they now want to make it even harder. Not to mention the amount of people who will be fighting for the fewer properties. With unemployment rising it is a recipe for total chaos. It is estimated that it will affect 774,970 households, we will lose an average of £9 per week. That might be loose change for this government but that is the same amount I pay per week for my electric.

Their second HB related cut is to put a cap on the amount of benefit someone can receive, eg: no more than £400 a week for a 4 bedroomed house. Thats fine where I live, but in London is nigh on impossible. A total of 21,060 will lose around £74 a week.

My rent is £450 a month for a small 3 bedroomed terrace. 2 of my children share a bedroom which is fine because they are only toddlers at the moment. I do not receive the benefit to spend as I like, I pay my rent with it. Some people seem to be under the impression that we have that much disposable income. We don’t, it just pays the rent.

The real facts are listed below:

Fact:

  • Only 2% (21,060) of households affected by the cuts to housing benefit are affected by the caps
  • The average HB award in the private sector is just £109.25 per week and for social tenants is £72.60.
  • Though losses will be highest in London, all local authority areas will be affected by the first wave of cuts from Cornwall to the Highlands and these average awards will be further reduced. 937,000 households across the UK who claim Local Housing Allowance (LHA – Housing Benefit for private tenants) face average losses of £624 from the first round of cuts alone.

Myth: All Housing Benefit claimants are unemployed

Fact:

  • More households who claim Local Housing Allowance are in low paid employment (26%) than unemployed (22%)
  • 1.6 million people receiving Housing Benefit are pensioners and others are disabled or have caring responsibilities.

Myth: Housing Benefit claimants can live where they like. They should make choices just like the rest of us.

Fact:

  • Nearly half of those on LHA already face a shortfall between their benefit and the rent, of an average of £23 per week, meaning tough choices between rent, food, heating or getting into debt.
  • Reducing Housing Benefit rates will move people away from their jobs and future employment opportunities, disrupt children’s education and damage local communities. Poorer people will become concentrated in areas with lower rents risking ghettoisation, an increased burden on public services and real implications for mixed communities. 

Myth: Housing Benefit bill is “out of control”

Fact:

  • The main reason the HB bill has grown is higher rents and more claimants in the private accommodation due to a shortage of social housing. Between 97/98 and 07/08 the average private sector rent rose by 63%. Hardly surprising given that house prices rose by 143% during the same period.
  • More recently in the economic downturn the number of claimants has risen by 700,000 as people lose their jobs and are forced to work reduced hours.

Some London councils are already moving families out of their area. I am lucky because I am surviving and my landlord is quite nice. I fear that he will put the rent up next year, then I will be among the thousands robbing Peter to pay Paul.

There is another element to this cut. Iain Duncan Smith wants to cut HB by 10% for people who have been unemployed for 12 months or more. JSA is a mere £65 a week. A single person under 35 privately renting a room (because that is all they are entitled to) is likely to already be paying around £20 towards their rent. He wants to further plunge them into poverty as punishment for there not being enough jobs for everyone. We should not forget all those families who are living on JSA either, it isn’t just single people who claim it. Whole families are going to be torn apart by some rich fool who has never had to decide between eating, heating their house, having hot water, or paying their rent.

It doesn’t make sense to me. Instead of punishing people for the failure of this government to encourage/enable  job creation, they should be doing everything they can to create those jobs. Unemployment is rising, benefits are going to lower. There is no logic as far as I can see.

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Posted on December 28, 2010, in Uncategorized. Bookmark the permalink. Leave a comment.

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