Although housing policy and legislation is devolved to Scotland, housing benefit and most other welfare benefits remain the responsibility of the UK Government.
Housing benefit is available to people on low incomes to help cover all or part of their rent costs. The UK Government made a number of changes to housing benefit, some of which took effect from 1 April 2011. They will mainly affect people who rent from a private landlord. However, claimants who receive non-dependent allowance could also be affected.
These changes form part of the UK Government's wider Welfare Reform agenda aimed at simplifying the benefits system, removing disincentives to work, and controlling public expenditure.
The Welfare Reform Bill makes other significant changes to the benefits system, including housing benefit. We have a number of concerns about the reforms, including that they will restrict housing benefit for social housing tenants whose accommodation is deemed to be larger than they need. Local Housing Allowance rates will be uprated in line with the Consumer Price Index. The Consumer Price Index measures the average changes in the prices of consumer goods and services in the UK from month to month. It is the main measure of inflation in the UK; the government uses it for its inflation target.
At present, housing benefits claimants in private rented housing receive direct payments. It is proposed that direct payments will also be made to council and housing association tenants who claim housing benefit. When it is introduced in October 2013, Universal Credit will cap the total amount of benefit that can be claimed for each household based on average weekly incomes. Although still to be agreed by the UK Parliament, the current proposal sets the cap at £350 for a single person household and £500 for a family.
Potential Impact of the Changes
The changes to housing benefit might make it more difficult for recipients to meet their housing costs. We are concerned that these reforms could undermine the strong housing rights to homeless households resulting from the achievement of the 2012 target that every unintentionally homeless person in Scotland is entitled to settled accommodation.
Local authorities and housing associations are concerned that the move to the new system of direct payment of benefits to claimants could lead to rent arrears and evictions, which would not only adversely affect tenants but also add to landlords' management costs. Although DWP have carried out an impact assessment for the UK, the Scottish Government has carried out its own impact assessment and other analysis on Scotland's housing system.
The Scottish Government response to the reforms includes establishing with COSLA the Housing Benefit Reform Stakeholder Group, publishing our own analysis on the impact of the reforms and extensive engagement with the UK Government.