Housing Benefits: How the Cap Will Work

What are the cuts? Housing benefit payments will be capped at a maximum of £400 a week for a four-bedroom and £250 a week for a two-bedroom home. Single people under 35 will have to live in shared accommodation if they are claiming housing benefit, and those who are jobless will see their housing benefit cut by 10% for every year they remain out of work and claim jobseeker's allowance (JSA). Local housing allowance (LHA), for those renting in the private sector, will also be changed. Allowances are currently worked out by taking the median rent – the value in the middle of all the values, also known as the 50th percentile – for that sort of property in that area. The plan is to use the 30th percentile of market rents instead.

Who will be affected? According to a government impact assessment, the changes to LHA will affect 774,970 UK households. They will lose an average of £9 a week. Claimants, most of them unemployed or low earners, will face paying the same rents on lower benefits, meaning they must either make up the difference or move somewhere cheaper outside city centres. Others may be forced to relocate because the housing benefit caps will make rents unaffordable. Increasing the age threshold for shared accommodation from 25 to 35 will mean 260,330 people on housing benefit will no longer qualify for their own home.

Will more people end up homeless? The National Housing Federation warns the 10% cut to housing benefit for the long-term unemployed could put more than 200,000 people at risk of homelessness, because it would lead to cuts of up to 50% in disposable income for many. If people struggle to pay their rent and fall into arrears they would be deemed "at fault" for their eviction and not entitled to emergency accommodation. Single, childless claimants will be hit hardest because they are not entitled to any other income support aside from JSA, the NHF says. Read more on The Guardian website.