Consultation on Housing Benefit and Supported Housing,
DWP July 2011
A Briefing note by the Housing Support Enabling Unit
The DWP has set out proposals to change the way Housing Benefits (HB) deals with supported housing1. To date some types of supported housing have been exempt from rules which limit rent levels eligible for HB. The DWP’s proposals follow on from research conducted by the DWP in 20102 about the way HB rules around exemption have been applied. That research looked at reasons why the amount of money being spent through HB to cover the costs of supported housing has been increasing. Whilst the DWP states in its proposals that it is ‘not looking to reduce costs’ it does set the proposals in the context of the ‘current economic climate (paragraph 33) and expresses concern that HB might be ‘meeting costs that do not directly relate to housing’ (paragraph 35).
It also considers introducing a new fund for local authorities to administer to cover some of the costs associated with supported housing and this would appear to be a fixed fund (paragraph 59). A new system could come into force in April 2013 but the HB system is set to be replaced by a new Universal Credit system in October 2013. The proposals on Housing Benefits and Supported Housing, therefore, need to be considered in conjunction with other elements of current Welfare Reform.
Drivers and objectives for changing the current system
The current system for administering HB is deemed to be overly complex and because of that, lacking in transparency. Given that HB is set to disappear for new claimants in October 2013 and the new Universal Credit system is to be administered centrally by the DWP a simpler system is a key objective of the proposals.
The DWP has concerns that under the current system HB may be covering some costs which are not housing related and it wants to align the way supported housing is treated more closely with general needs housing.
At the very least the DWP wants to halt the trend of increasing housing related costs in supported housing and to put a cap on it. It should be remembered, however, that the overall objective of current welfare reform is to reduce public expenditure rather than simply halt an increase in expenditure.
The current system applies an exemption on the basis of accommodation and landlord type rather than on the basis of a person’s need for support so it is possible that some people are not receiving all the help they should through HB. This is particularly likely where support is provided by someone other than the landlord.
The proposals in summary
The proposals distinguish 2 types of supported accommodation. These are:
Category 1: Conventional supported housing (including sheltered housing, refuges, foyers, hostels)
Category2: Specially built or adapted accommodation for people who need more intense care or support.
Where the landlord is not a Registered Social Landlord (ie the independent and voluntary sectors) the proposals suggest that the Local Housing Allowance3 is used to set the rent plus, in the case of Category 1, an additional flat rate which would be eligible for HB. The proposal does not go into how this additional flat rate would be calculated but has asked for views on whether it should vary according to type of supported housing and the geographical area. Another possibility would be that the LHA rate applied could be for an extra bedroom. In the case of Category 2 an additional amount would be agreed with and paid by the local authority from a fund created for that purpose (this fund could fixed and so be limited in overall spend). Again, the proposals appear to rule out RSLs becoming subject to this rule – at least initially.
Where the landlord is a Registered Social Landlord the proposals say that HB will treat the accommodation as if it wereRSL general needs housing. This would mean that the rent could be referred to a rent officer who would then set a ‘local reference rent’. This could restrict the amount of benefit payable. In practice local authority HB teams do not refer many RSL rents to rent officers but it ispossible that more referrals would be made in future whenUniversal Credit is introduced and the DWP takes over administration of it. The Scottish Government produced statistics on median local reference rents which might be used as a guide for those wishing to see what impact this might have.4The Unit knows of at least one RSL that has compared existing rent levels in its supported housing with median local reference rents. This has revealed potential shortfalls in some of its supported housing.
Whilst the proposals do not appear to suggest that RSLs would be subject to Local Housing Allowance initially there have been various interpretations of this part of the proposals particularly looking ahead to the new Universal Credit system in October 2013 - sothat RSLs may wish to consider the impact that such a move would have.
Service charges
The proposals states that the way HB treats service charges will be reviewed so that in future there would be a list of items which are eligible (whereas at the moment there is a list of items not eligible). Although this is put forward in the section dealing with RSLs such a review could have wider implications for other types of landlords too.
There is some uncertainty as to how the proposals would affect services leasing properties from RSLs. This is a common arrangement for Womens Aid services, for instance and clarification is being sought from the DWP.
Developing a response
The Unit and Scottish Federation of Housing Associations jointly delivered a seminar on the proposals on 19th August where concerns were expressed about the way the two categories of supported housing have been set out as well as concerns about the lack of clarity as to how RSLs would be dealt with. The Unit has already gathered some information from RSLs about how possible referral to Local Rent Officer services might impact on rent and service charge levels as well as the impact should LHA be used to determine eligible rents in future.
The Unit welcomes information from other organisations, particularly in the independent and voluntary sectors about how the changes might impact on their services as well as other ideas for changing the current system to meet the objectives outlined above.
The DWP deadline for responses is 9th October 2011.
For further information please contact Yvette Burgess, Unit Director, HSEU
or telephone 0131 229 9468
1Housing Benefit and Supported Housing consultation, DWP, 2011
2 Exempt and Supported accommodation, DWP, 2010
3 To find out more about Local Housing Allowances in Scotland go to:
4 To find out more about recent trends in local reference rent levels go to:
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