DWP Urged To Review Universal Credit 'Issues'

The Department for Work and Pensions (DWP) should review issues with universal credit, the Social Security Advisory Committee (SSAC) has said. SSAC, which advises the government, said changes to payment of housing costs are ‘a constant source of anxiety for landlords, housing associations, claimants and claimant advisers’. Under universal credit, benefit for housing costs is paid direct to households, as opposed to social landlords, in most instances. The SSAC report said: ‘We believe this [direct payment] policy needs close monitoring to ensure that arrears are kept in check and landlords are not discouraged from offering accommodation to benefit claimants.’ Download the report from the GovUK website.

Seven-Day Wait Sparks Rent Arrears Fears

The government has confirmed it is pressing ahead with its plan to introduce a seven-day waiting period into its flagship welfare reform, despite warnings from the Social Security Advisory Committee (SSAC) that it should not go ahead. Under the measure, claimants have to wait seven days after their claim before they become entitled to universal credit, in addition to the month and seven days that claimants currently wait between making a claim and receiving their first payment. In consultation responses, which were published in the SSAC’s report alongside the government’s response, landlords expressed concern that the move would increase rent arrears and take its toll on income streams. Download the report from the GovUK website.

Benefit Reforms Will Cause 'Family Breakdown'

New rules will leave young benefit claimants struggling to contribute towards their households’ rent, leading to family breakdown, housing bodies have warned. In its response to the SSAC’s consultation on regulations for the universal credit, the National Housing Federation has voiced concern over a change to rules for ‘non-dependents’. Deductions from benefit are made for non-dependent members of the household, such as grown-up children. Currently, households with people claiming jobseekers allowance or employment support allowance under the age of 25 are exempt from deductions, while those in work can lose between £11 and £74 a week from their housing benefit depending on their income.  The new system brings in a flat rate deduction of £65 per month for everyone over the age of 21, regardless of their employment status. This means working non-dependents will be better off but those aged 21 to 25 years on benefit will be hit by the deduction for the first time.  The NHF believes this is unfair as people aged under 25 years receive less jobseekers allowance and will receive less universal credit. The NHF believes this will make it more difficult for these non-dependents to contribute to housing costs.  Homelessness charity Shelter has warned the move could lead to family breakdown.  Download a copy of the NHF response to the consultation below.

Government Advisors Condemn Benefit Cuts

The body that advises the government on social security issues has issued a damning verdict on the planned cuts to housing benefit. The Social Security Advisory Committee report, published as the government laid secondary legislation on the cuts in Parliament, predicts that the cuts, which will come into force from April 2011, could cause a ‘substantial displacement of the poorest and most vulnerable households’. They will also exclude a large number of low-income households from the private rented sector in a number of areas. It also describes caps to the amount of local housing allowance that can be paid per room as ‘arbitrary’ and says rents are unlikely to fall as a result of the cuts. Ministers had claimed the caps would drive down excessive rents in areas such as London. The report says: ‘Whether considered separately or as a package, these measures constitute a high-risk approach to managing down the costs of the LHA arrangements. The proposed timetable offers little time for tenants, landlords and other key stakeholders…to prepare for the changes.’ Download a copy of the report from the Official Documents website.