Briefing: Welfare Reform Bill Lords 2nd Reading

Published: November 2015

Briefing: Welfare Reform & Work Bill


1. 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.

2. 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.

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, as well as restrictions on growing families, has not been modelled by the government and is of concern.

4. 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.

5. The redefinition of Child Poverty is worrying. The new definition risks under-estimating the rise in in-work poverty and downplaying income risks obscuring families' ability to pay for decent housing. 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.