DWP: Benefit Cap 'Not Designed As Cost-Saving Measure'

The lowered overall household benefits cap was never “designed as a cost-saving” measure, a DWP spokesperson has said. The government has insisted that the total household benefit cap – which is reduced from £26,000 to £20,000 (£23,000 in London) – was designed to get people back into work and was not designed as a cost-saving measure. This is despite the cap being included in a list of measures last year to enable former chancellor George Osborne to achieve £12bn of welfare cuts. The DWP was responding to a report by the Institute for Fiscal Studies (IFS) today that suggested any cost-saving from the policy would be “trivial”. Read the IFS report on their website.

‘Pay To Stay’ Will Discourage People From Increasing Earnings Or Finding Work

Pay to stay, which was announced in the summer budget, will see social housing tenants in England with a household income of £30,000 or more (£40,000 in London) paying higher rents. In a survey of CIH members, 77 per cent of people who responded (see notes to editors) said the policy was very likely or likely to discourage tenants from increasing their earnings. In addition:

·         59.3 per cent said it was very likely or likely to discourage tenants from finding work

·         72.9 said it was very likely or likely to have a negative impact on the relationship between tenants and landlords

·         79 per cent said it was very likely or likely to increase the take up of right to buy when it is extended to housing associations.

Read more on the CIH website.

Is Housing And Employment Support A Natural Partnership?

In recent years, supporting residents to prepare for and find work has been an increasing priority for government and landlords. However, there is relatively little current analysis of the characteristics of residents, the barriers that they face and ‘what works’ in supporting them. Our recent report, ‘Worklessness, Welfare and Social Housing’ seeks to address these gaps. It proposes a new partnership between government and housing associations to support disadvantaged residents to prepare for and find work. It highlights how housing associations are uniquely placed to provide employment support to those living within their homes and communities. They have a long term interest in the wellbeing of their residents and have strong social and business drivers which support moving tenants into the security and dignity of work. Housing associations are also major employers in their own right, with established supply chains which can provide further employment opportunities. Read more on the ERSA website.

Benefit Cap: Dozens Were Receiving Equivalent of £70,000 Salary

More than 18,000 households have had benefits capped, including 300 claimants who were receiving more than £40,000 a year, the first official figures to be released since the introduction of tougher rules show. Dozens of families were receiving benefit payments equivalent to a salary of almost £70,000 a year until the implementation of the Coalition’s welfare cap. According to the DWP, 18,024 households have had their benefits cut since the policy was implemented in April. Ministers described the move as a success, claiming that it had already encouraged almost 36,000 people to seek extra help in finding work. The figures also show that 98 per cent of the households affected have at least one child.  Read more on the Daily Telegraph website.

Impact of Welfare Reform Revealed

An analysis of the government's welfare reforms, commissioned by the Local Government Association (LGA), has found that less than a quarter of claimants will be able to mitigate reductions in benefit payments by finding work or moving to cheaper accommodation.  The study, carried out by the Centre for Economic and Social Inclusion, shows that by 2015/16 the income of households claiming benefit will be lower on average by £1,615 per year (£31 per week). However, a shortage of jobs and affordable homes in many areas means that four out of every five of those households are likely to need some form of assistance from their council to help them cope with the reduction in welfare.  Download a copy of the report from the LGA website.