1. what we will be focusing on impact on the affordability of housing effect on ta risk of legal...
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What we will be focusing on • Impact on the
affordability of housing
• Effect on TA• Risk of legal
challenge
• Use of DHPs
• Assessment of New Burdens
Impact on affordability• At first, Benefit
Cap applied as HB restriction
• A bigger impact than 14% / 25% Bedroom Tax
• No allowance is made for number of children or the tenure / location
Impact on affordability• Social housing
• Homes let at the Affordable Rent
• Private rented accommodation (at LHA rates)
• Travellers sites
• Temporary accommodation
Example 1: affordabilityCouncil tenant with 5 children Rent: £117.86 per week
27% of rent is not being met
Receiving Child Benefit, Child Tax Credit and JSA
Example 2: affordabilityCouncil tenants with 4 children Rent: £115.12 per week
35% of rent is not being met
Receiving Child Benefit, Child Tax Credit and ESA
Example 3: affordabilityCouncil tenants with 5 children Rent: £142.92 per week
90% of rent is not being met
Receiving Child Benefit, Child Tax Credit, Carer’s Allowance and Income Support
Example 4: affordabilityHousing association tenants with 5 children Rent: £131.97 per week
35% of rent is not being met
Receiving Child Benefit, Child Tax Credit and Income Support
Example 5: affordabilityHousing association tenants with 4 children Rent: £266.60 per week
59% of rent is not being met
Receiving Child Benefit, Child Tax Credit and ESA
Example 6: affordabilityHousing association tenant with 6 children Rent: £132.23 per week
85% of rent is not being met
Receiving Child Benefit, Child Tax Credit and Income Support
Example 7: affordabilityPrivate tenant with 3 children Rent: £288.46 per week
25% of rent is not being met
Receiving Child Benefit, Child Tax Credit and Income Support
Example 8: affordabilityPrivate tenants with 3 children Rent: £288.46 per week
49% of rent is not being met
Receiving Child Benefit, Child Tax Credit and ESA
Example 9: affordabilityPrivate tenant with 6 children Rent: £369.00 per week
94% of rent is not being met
Receiving Child Benefit, Child Tax Credit and Income Support
Impact on affordability• London’s private
rented sector is overheating
• Private landlords are reacting more quickly to arrears
• Significant increase in family evictions
• Harder to end LA homelessness duty
Potential monthly rent shortfalls Couple with 4 children living in private rented 3-bed home
£810
£862
£555£680
£654
£1,007
£862
£910
£654
£555
Based on April 2013 LHA / Benefit Rates
Potential monthly rent shortfalls Couple with 5 children living in private rented 4-bed home
£1,347
£1,453
£1,147£1,147
£1,147
£1,551
£1,551
£1,551
£1,196
£1,147
Based on April 2013 LHA / Benefit Rates
Potential monthly rent shortfalls Couple with 6 children living in private rented 4-bed home
£1,529
£1,633
£1,326£1,326
£1,326
£1,731
£1,731
£1,731
£1,373
£1,326
Based on April 2013 LHA / Benefit Rates
Impact on affordability• London’s housing
associations have started to ‘screen’ prospective tenants
• Some are reducing exposure on TA and/or maximising Affordable Rent
• Many are making matters worse
Impact of these changes • More homelessness
• Increased use of TA• Increased mobility
(from expensive to less expensive areas)
• Uncollected rent (TA and social housing)
• Landlords of last resort (residualisation)
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Effect of Benefit Cap on TA• Substantial TA rent
shortfalls resulting from existing / new households
• Increased reliance on the use of TA
• TA rent levels are very high (leasing)
• Subsidy regime will make it worse
Example 1: effect on TACouple with 3 children Rent: £375.00 per week
51% of rent is not being met
Receiving Child Benefit, Child Tax Credit and JSA
Example 2: effect on TALone parent with 4 children Rent: £375.00 per week
60% of rent is not being met
Receiving Child Benefit, Child Tax Credit and JSA
Example 3: effect on TACouple with 5 children Rent: £375.00 per week
90% of rent is not being met
Receiving Child Benefit, Child Tax Credit and Income Support
Example 4: effect on TALone parent with 6 children Rent: £375.00 per week
95% of rent is not being met
Receiving Child Benefit, Child Tax Credit and Income Support
Effect of Benefit Cap on TA• As boroughs look to
minimise the net cost of providing families with TA, the pace of migration will increase
• This will concentrate TA in lower cost areas, increase competition and inflate rents
• Needs to be managed
Risk of legal challenge• Affordability of TA
(Homelessness Code of Guidance)
• Suitability of TA (size and location)
• Act or omission (intentionality)
• Must have clear policies and good record keeping
Risk of legal challengeParagraph 17.40 of the Code of Guidance:
“ ... authorities [should] regard accommodation as not being affordable if the applicant would be left with a residual income which would be less than the level of income support or income-based jobseekers allowance that is [or would be] applicable in respect of the applicant ...”
Risk of legal challengeParagraph 17.40 of the Code of Guidance:
“ ... [housing authorities] need to consider whether the applicant can afford the housing costs without being deprived of basic essentials such as food, clothing, heating, transport and other essentials ...”
Discretionary Housing Payments• DHPs are only able to
assist transition• £1.35m in 2013/14
compared to £5.2m HB losses:
• £2.5m (Private rented)• £1.9m (Existing TA)• £0.8m (Social rented)
• DHP expected to fall to £0.73m in 2014/15
Discretionary Housing Payments• Cannot fetter
our discretion
• Should consider extra funding
• Must be strategic
• Clear priorities (TA + Prevention + planned move-on)
• Time limited and conditional
Assessment of New Burdens• New Burdens Doctrine• To avoid any increase
in the Council Tax• Extra cost and loss
of income• HB administration• Service requests• Homelessness & TA• Schools, social care,
safeguarding, etc
“Those in unaffordable accommodation make up
only 15% of the stock, therefore given advice
and behavioural changes, short term intervention
can be made through DHPs, thus homelessness
is zero. Caveat that if evidence is presented to
show a benefit cap policy has caused increased
homelessness, despite mitigations being used,
then burden will be reviewed and costed based
on this evidence”.
New Burdens Assessment
17 December 2012
New Burdens
