Random Stats: Housing Benefit – now you see it, now you don’t

Every so often I will be adding various statistics.  I’m not sure about the relevance of them all yet, but want to try to build up a fairly comprehensive picture of what’s going on as and when the chance arises.  Here’s the first.  This is about changes coming next year that will affect Housing Benefit.

Jumping to the important bitChanges to be introduced in April and October next year will mean over 11,000 households seeing their Housing Benefit reduce.  Most will lose between £8 and £11 a week.

This doesn’t include any cuts for Job Seekers Allowance for those claiming more than a year or any reductions for people living in properties too big for them.

and the detail ……..

Housing Benefit is payment towards rent for those on low incomes.  Across Cornwall there were 39,510 households claiming it in June this year (2010).  This by the way is fairly hefty increase on the 36,450 who were claiming in June last year (2009).  We are up by 8.4%.  The rise across Great Britain as a whole in this period is 7.1%.

Of our 39 and half thousand housesholds claiming, 20, 870 of them are in social rented housing, housing association or council owned.  The other 18, 700 are in the private rented sector.  For those in the private sector Housing Benefit is set by an amount set in each area called Local Housing Allowance.  If you’re a private tenant and you apply for Housing Benefit today, it’s this that will be used to work out what you will get.  It doesn’t apply if you have an old regulated tenancy – these are pretty old – pre 1988 (I think if I remember correctly, but don’t quote me on it), or if you live in a caravan/mobile home.

The changes

It’s the Local Housing Allowance type claimants that are affected by these changes.  From the analysis it looks like there are 11,180 of these in Cornwall – this is the number of households that the Department for Work and Pensions say will be affected, so assume it also the number of Local Housing Allowance claimants (incidentally we’ve moved back to March 10 figures for this analysis).

Change 1

At the moment if your rent is less than the Local Housing Allowance you can keep up to £15 a week excess.  From April next year (2011) you can’t.  It was the last Labour Government that announced this bit in the March 2010 Budget.  There are 4,610 households who will lose money as a result of this change.  Most of them will lose about £10 or £11 a week.

Change 2

This one has come from the Conservative/Lib Dem coalition, announced in the June 2010  Budget.  Caps.  They’ve set a maximum to the Local Housing Allowance payable.  This differs with the number of bedrooms you are claiming for.  Bedsits and 1 bedroom places have a cap of £250 a week, 2 beds £290 a week, 3 beds £340 a week and 4 beds £400 a week.  The 4 bed rate will now be the maximum.  These rates will also be applied from next April.  The area most affected by this change is London where in some parts you can’t get any private rented properties at this level.  It’s not the same in most parts of the country, although if there were to be a rising private rented housing market, and the level of the cap stayed the same, that could change.

In Cornwall most aren’t going to be affected by this, although there are a small number of large families that will be.

Change 3

The Coalitions next change.  This is another one that will affect people in Cornwall.  It’s also about how the Local Housing Allowance payable is calculated.  It’s moving from the 50th percentile to the 30th.  That means if you put the rented properties available in order, cheapest to most expensive, under the current system the Local Housing Allowance is set at the point where it would pay for half of the properties available, under the new system it will be set at the point where you can afford 30%, under a third of them.  In short it will be lower.

The analysis shows that about ten thousand households will be affected by this change.  The bigger the dwelling the more the change will affect you.  This change will affect just over ten thousand households with most losing between £6 and £9 a week.

Putting the changes together – what’s the impact

For those in bedsits: 1,930 households will lose on average £7 a week

1 beds:  3,950 will lose on average £8 a week

2 beds: 3,760 will lose on average £10 a week

3 beds: 1,220 will lose on average £11 a week

4 beds: 260 will lose on average £17 a week

5 beds: 60 households will lose on average £31 a week

Not included

The Government has also talked about reducing the amount of job seekers allowance for those who have been claiming for more than a year, and about the possibility of reducing housing benefit for people in social housing who are living in properties too big for their needs.  These are separate and not included in these calculations.

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