EXCLUSIVE – DWP admits Welfare Reforms leaving claimants £65 short on their rent

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In an answer to a written question, The Department for Work and Pensions (DWP) has revealed that welfare reforms are leaving benefit claimants £65 short when it comes to paying their rent. The question by Labour MP Karen Buck, asked for “the average shortfall between housing benefit and rent of people affected by the benefit cap.”

However, DWP Minister Justin Tomlinson MP gave a much more detailed answer than was asked for and even laid blame for the shortfalls on the government’s own welfare reforms.

The Labour MP for Westminster North had submitted the following written question to the Department for Work and Pensions (DWP) on October 29th.

“To ask the Secretary of State for Work and Pensions, what the average shortfall is between housing benefit and the rent of people affected by the benefit cap who are in receipt of (a) jobseekers allowance, (b) employment support allowance, (c) income support and (d) another benefit.”

Tomlinson responded on November 6th with the requested information as seen below.

benefit rent shortfall broken down by benefit type

As you can see claimants face having to use at least £60 a month of their benefit payment to ensure they can pay their full rent. When you consider that benefit payments have been frozen since 2015 this will be inflicting severe pressure on claimants budgets.

Why are they so short though? Well, Mr Tomlinson even explains that for us and Work and Pensions Secretary Esther McVey might not be to grateful. Although I myself applaud his diligence in providing a full answer.

In a surprising admission he admits that Welfare Reforms are the reason behind the shortfalls. 

“We acknowledge there could be a potential rental shortfall due to various Welfare Reforms, for example:

  • the Benefit Cap;
  • Removal of the Spare Room Subsidy (RSRS) in the social rented sector;
  • Changes to Local Housing Allowance (LHA) rates, including the 4 year freeze.

These figures don’t isolate which deductions a benefit cap claimant has applied to their Housing Benefit. It should be noted however DHPs [Discretionary Housing Payments] can be used by local authorities to mitigate rental shortfalls faced by claimants.”

Bedroom Tax

It’s long been known that the Removal of the Spare Room Subsidy (RSRS), commonly known as the “bedroom tax,” has affected claimants.

The bedroom tax applies if you are of working age and renting from a local authority, a registered housing association or other registered social landlord.

As part of the Welfare Reform Act 2012 tenants in social housing saw their benefit reduced by 14% if they have a spare bedroom or 25% if they have two or more children. Two children under 16 of same gender are expected to share one bedroom as are two children under 10, regardless of gender.

Working age means anyone under the qualifying age for pension credit (this is being raised from 60 to 66 between April 2010 and October 2020). You are not affected by the bedroom tax if you or your partner are claiming housing benefit and have reached pension credit qualifying age.

However, you may be affected if you are a member of a couple claiming Universal Credit and just one of has reached pension credit qualifying age

Proof reforms risk Homelessness

Homeless Person in Sleeping Bag sitting in rain

This data only confirms what many had already suspected. The government’s much lauded Welfare Reform Act 2012 is increasing the risk of homelessness on already vulnerable people. 

A National Audit Office (NAO) analysis of one area where Universal Credit was rolled out showed that rent arrears for claimants jumped significantly after its introduction.

An investigation by The Observer found “government welfare reforms are fuelling a rise in homelessness in towns and cities across the country.”

The chief executive of charity umbrella group Homeless Link, Rick Henderson told The Observer he blames the reforms Tomlinson mentions above.

“Welfare reform, specifically the cap and freeze on local housing allowance rates, compounded by high housing costs, are restricting the options available.”

Little to change soon

Following the recent budget and Work and Pensions Secretary Esther McVey doubling down on how good Universal Credit is, unfortunately it doesn’t look like things will improve soon. While benefits remain frozen for at least another year, inflation will continue top drive up prices squeezing already tight budgets.

The government will of course say that unemployment is at an all time low and that “work is the best route out of poverty.” What cannot be ignored is that despite these claims The UK currently has a team from the United Nations investigating how austerity and Welfare Reform has affected poverty and human rights in the UK.

The UN’s Special Rapporteur Professor Philip Alston has already hit out at the rise of foodbank use saying governments should rely on the third sector to solve their problems. He told the BBC;

“You risk sending the message that government doesn’t need to play the central role and government can just outsource these things,”

It cannot “just hope that a private community is going to take it up and keep people alive.”

Alston is looking into what is causing such high levels of poverty in the UK and I expect that the reforms mentioned above, will be mentioned in his final report.

As he has said before; “Poverty is a political choice, not an economic one.” It’s just a shame the Tories can’t see that.

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