Decision Deferred On Housing Benefit Cap

The Government has announced that it will put a 12-month delay on its proposals to bring supported housing rents in line with Local Housing Allowance.

Over the past few months concern has been growing in the homelessness sector over the Government’s plans to cap supported housing rents to bring them in line with Local Housing Allowance. It was feared that these caps would have that meant that many homelessness services could face a reduction of income of up to two-thirds, leaving some with no option but to close.

However, last week the Government announced that the proposed reduction would be deferred for twelve months to allow an impact assessment to be carried out. But this is merely a postponement, not a cancellation, of the plans. The reductions in Housing Benefit are still due to come in from April 2018. They will only apply to new tenancies starting after April 2017 rather than a month from now as originally planned.

Last month the Government announced a year-long exception for all supported housing from its proposed 1% reduction on social housing rents. With regard to the LHA reduction, last week a Government spokesperson said: “In the Autumn Statement 2015, we announced that when assessing eligibility for Housing Benefit and Universal Credit that Local Housing Allowance rates would be applied to all social rents from April 2018, where tenants had signed new or re-let tenancies from 1 April 2016.”

“I am able to announce today that the Government will put in place a year-long exception for all tenants of supported accommodation in the social sector so that this measure will only apply to these tenancies from April 2017, rather than April 2016. As examples, this will include refuges for those fleeing domestic abuse, homeless provision, housing for ex-offenders, as well as supported housing for older and disabled people.”

Even though the decision will be put off for 12 months many homelessness organisations will find themselves stuck in limbo, unable to commit to future projects until there is more certainty about their future rental income.

So, watch this space!