Letter from Department for Social Development on Statutory Rule 293

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Tel: 028 9081 9984
E-mail: anne.mccleary@dsdni.gov.uk

Mr John Simmons
Social Development Committee Clerk
Room 242
Parliament Buildings
BELFAST
BT4 3XX

21 September 2011

Dear Mr Simmons

S.R. 2011 No. 293: THE HOUSING BENEFIT (AMENDMENT NO. 2) REGULATIONS (NORTHERN IRELAND) 2011

Thank you for your letter of 19 September 2011 to Margaret Sisk about the above-named Statutory Rule.

I recognise the Committee’s concerns, but, perhaps I could first explain that it was never the intention that Housing Benefit should guarantee that people on benefit would have unrestricted access to accommodation at any price. Many younger people who are working cannot afford to rent by themselves and so they live in shared accommodation. It is considered reasonable to expect younger Housing Benefit tenants to share accommodation, as the tax-payer should not be expected to subsidise the payment of rents that those who are not on benefits could not afford.

The change to Housing Benefit for people under the age of 35 is intended to produce a fairer system of support that reflects the housing expectations of people of a similar age who are not on benefits. It is appropriate that those on benefit make the same sort of choices about where they live as those who are not on benefit. The aim is to avoid a situation where younger people would not want to work because they would not be able to afford their accommodation if they were not in receipt of benefits. This could erode the incentive to work.

It is important to emphasise that not all those claimants who are under age 35 will be expected to live in shared accommodation. The current rules provide exemptions from the shared accommodation rate (so that the one bedroom self-contained rate would apply) for:

• claimants entitled to the severe disability premium,
• claimants in certain supported accommodation,
• claimants under the age of 22 years who were formerly in social services care,
• claimants who have a non-dependant residing with them, and
• claimants who require overnight care and a bedroom for a non-resident carer.

In addition, the shared accommodation rate does not apply to those living in the social rented sector. Further, there is already a general Housing Benefit easement which entitles new claimants to have their rent met in full for 13 weeks if they have not claimed Housing Benefit in the last year and could afford their rent at the time they entered into their tenancy. This will particularly assist claimants who experience only a short spell of unemployment and it gives others time to consider their housing options. People who have been recently bereaved are entitled to similar protection for 12 months (for example, following the loss of a partner or for a lone parent the loss of their child).

The existing exemptions from the shared accommodation rate will remain and two further exemptions, for those aged 25 and over, are being introduced. The first exemption is for those who have spent at least three months in a homeless hostel or hostels specialising in rehabilitating and resettling within the community. To benefit from this exemption they would need to have been offered and accepted support services to enable them to be rehabilitated or resettled in the community. The second new exemption is for certain offenders subject to risk management where there is a risk of serious harm to the public.

Of course, a case could be made for further groups of individuals who should not be expected to share accommodation, for example, those with shared care of children who do not live with them. However, rather than creating blanket exemptions for broad categories, Discretionary Housing Payments are available to support people in vulnerable circumstances. To provide further financial assistance with the rents of those affected by this and other Housing Benefit reforms, the Discretionary Housing Payments budget has been increased by 50% to £1.713m in 2011/12 and will triple to £3.426m from 2012/13. This is intended to give the Housing Executive the flexibility to sustain tenancies where additional support is needed in vulnerable cases.

As well as claimants under a particular age (presently 25), the shared accommodation rate also applies to claimants, regardless of their age or whether they are part of a couple, if they actually live in this type of accommodation. The Committee are aware of the following information which has been provided by the Housing Executive:

This indicates that 48.3% of claimants receiving the shared accommodation rate under Local Housing Allowance arrangements are over the present age limit for that rate, but (for whatever reason) have made a choice to live in that accommodation. Many claimants in the 25-34 age group choose to live in shared accommodation and the above figures show that, of about 8,000 claimants potentially affected by this measure, around 2,100 (over a quarter) already live in shared accommodation.

Neither the Department, nor the Housing Executive, can confirm the prospect of “potentially a further 5000 or more being affected once the measure has been implemented in January 2012”, as indicated by the Voluntary Sector Housing Policy Forum briefing. This certainly would have been a dramatic increase on top of the existing 8,000 potential cases, however the table above provides the Housing Executive’s best estimate of the numbers most likely to be affected. Also, the change will take effect gradually for existing cases, depending on the anniversary date of their claim and transitional protection for the Local Housing Allowance reform changes expiring, and some cases may not be affected until December 2012.

Although there is the potential of some claimants becoming homeless, the above information suggests that concerns about availability and lack of accommodation options for Housing Benefit claimants could be overstated. Certainly, concerns some years ago about widespread homelessness due to the introduction of the Local Housing Allowance arrangements proved unfounded. However, if a claimant does experience difficulty in finding somewhere affordable, for example, due to a shortage of suitable accommodation, further assistance to help with a rent shortfall may be available through Discretionary Housing Payments.

Without doubt, Discretionary Housing Payments provide a genuine safety net. Last year the Housing Executive had 5,001 Discretionary Housing Payments claimants and spent all but £85k of the £1.1m funding. The Housing Executive cannot spend more than the amount allocated and making an award in a specific case commits it to a spend over a number of weeks into the future. Careful monitoring of both the amount spent to date and future commitments is necessary to ensure that funds are available for new claimants throughout the course of the year. So far this year, for 4,033 claimants, the Housing Executive has already spent £568k and committed a further £267k. A larger proportion of funding than normal for the last three months of this year is being held back in anticipation of an expected increase in demand due to Local Housing Allowance reform changes.

A definition of “hostel for homeless people” is inserted by these Regulations into the main Housing Benefit Regulations, which already provide a definition of “hostel”. Based on those definitions, it is our view that someone in accommodation in the private rented sector with an accompanying floating support service could not benefit from this exemption. The exemption should mean there will be less bed-blocking in hostel accommodation.  

Turning to equality issues, the change is aimed at young single claimants without children, regardless of gender. We accept that these are more likely to be male as, for example, many more women than men will be lone parents. Some of the males affected will have children who do not live with them, but where shared care or shared custody arrangements are in place. However, these are not expected to be a significant proportion of Housing Benefit cases and Discretionary Housing Payments are available to support people in vulnerable circumstances. Also, the policy context for the proposed change, in addition to benefit savings, is to ensure greater fairness, so that those young single people in receipt of Housing Benefit do not have an advantage over their peers not on benefit, but on similar income and having to make similar choices about the accommodation they can afford. The shared accommodation rate age change extends an existing policy.

The shared accommodation rate change mirrors the change in Great Britain and is in keeping with the principal of parity between Northern Ireland and Great Britain in social security matters. The Committee are aware that any costs resulting from a breach of parity would have to be picked up by the Northern Ireland Executive and taken from other expenditure priorities. The annual shortfall for all of the expected affected cases could be £9.17 million, based on June rates and numbers of claimants, recurring and likely increasing each year (although this year it could be less due to transitional protection and the change gradually applying to claimants). Also, money would have to be found to adapt computer systems and for any other additional administration costs.

Finally, this Department will comply with any statutory requirement to consult in social security matters. The Department may also engage with organisations or individuals, where it considers that would be appropriate. The Department considered whether the independent review of the changes to Housing Benefit that were introduced from April 2011 (and which will also include the shared accommodation rate age change), which has been commissioned in Great Britain, should be extended to Northern Ireland. However, the cost to the Department was prohibitive, as would be the cost of a separate Northern Ireland review (which could have little influence over Housing Benefit policy in the shadow of the Great Britain review). Also, we are not convinced that there would be great value in a review covering Northern Ireland, which has similar characteristics to other areas of the United Kingdom already covered by the Great Britain review.

I hope this is helpful.

Yours sincerely

Anne McCleary
Director of Social Security Policy and Legislation