Briefing: Welfare Reform & Work Bill

By: Scott Dawes  Published: July 2015


This Parliamentary briefing outlines areas of the Welfare Reform and Work Bill where Shelter has key concerns. The briefing has been produced ahead of Second Reading in the House of Commons on July 21 2015.

Summary

The Welfare Reform & Work Bill seeks to alter the support available to people facing bad housing or homelessness. We are concerned that some of the measures will make it harder for the people we help to find and keep affordable accommodation, putting many more at risk of homelessness.

  1. Freezing Local Housing Allowance will mean more and more private renters will be unable to pay their housing costs as rents outstrip wage growth. In 2 years, LHA will not cover the bottom third of rents in almost all local authorities, as it is meant to. After four years, 60 areas will be very unaffordable and virtually out of bounds to households on benefits.
  2. The Benefit Cap has fundamentally changed. The cap is no longer made with reference to average earnings, making it punitive. It will now affect much smaller families in less expensive areas. This will increase the risk of homelessness and price out-of-work families out of whole swathes of the country.
  3. Removal of the Family Premium will lead to reduced housing benefit for working families, making it harder for them to manage the shortfalls as the value of LHA falls. The impact of this change on growing families has not been modelled by the government and is of great concern.
  4. Support for Mortgage Interest benefit payments for homeowners will be replaced by a loan. Little accompanying detail has been announced. Loans should not put people's homes at risk and mortgage holders should be able to choose between a reasonable and affordable payment plan and deferring payment until the sale of the property.
  5. Reducing Social Rents is welcome; tackling the high cost of housing is the only sustainable way of reducing welfare spending. But house building – the only way to bring housing costs down in the long term – must not be undermined, reinforcing the need for the Affordable Homes Programme.
  6. The redefinition of Child Poverty is worrying. The new definition risks under-estimating the rise in in-work poverty. It will be a missed opportunity if the new definition does not capture the impacts of high housing costs on family finances and bad housing on children's lives.
  7. The removal of housing benefit for 18-21 year olds will remove support from an extremely vulnerable group. The government must come forward with robust and practical exemptions. However, even with exemptions, many will likely fall through the net and become street homeless.

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