This month sees hundreds of thousands more households go into rent arrears in the social rented sector in the English regions (but not London) as their housing benefit is drastically cut and they career down the arrears to eviction into homelessness or AEH slope.
Council and housing association landlords seem very
non-plussed at this imminent financial catastrophe. The same apathy sees Shelter, Crisis
and the many other homelessness lobbies not mentioning the staggering increase
to already record homeless numbers this will obviate.
The Benefit Cap is baring its teeth!
For example maximum housing benefit for the 2 Parent 2 Child benefit household falls to £409 per month with the average 2-bed social housing property at its cheapest social rent level at £465 per month leaving a £56 per month shortfall. In the English regional average 2-bed at the average affordable (sic) rent of £642 per month the shortfall from raiding other welfare benefits to keep a roof over the heads becomes £233 per month.
Benefit households are now priced out of the cheapest council and HA rented properties is what the f*ck happens and homeless numbers caused by arrears evictions will rocket yet the apathy and ignorance is staggering.
Social housing and homeless lobbies are not batting an eyelid and just as conspicuous in silence are the disability lobbies to the 290,000 existing SRS households who in FY2425 will have their PIP taken off them being joined by 155,000 losing incapacity benefit … losing their exempt Benefit Cap status and see them hurtle down the arrears to eviction into homelessness slope as well.
The Benefit Cap policy systemically targets housing benefit (UC housing cost element and LHA) and maximum levels of housing benefit are cut systemically year-on-year as they have been since it began in September 2013 and thus ever smaller-sized households are ‘benefit-capped’ year-on-year.
To illustrate the 2P2C household was entitled to (up to) £1,032 per month in maximum housing benefit in 2013/14 which reduced to £498pcm in 2023/24 and reduces again to £409 per month in FY2425 and, critically, maximum housing benefit payable falls below the cheapest average 2 bed social housing property for the first time in the English regions creating a shortfall.
A more than 60% cut in actual terms to maximum housing benefit from 2013 to 2024
At least 200,000 of the existing 2.45 million SRS households of working-age who receive housing benefit will be caught by this systemic cut to maximum housing benefit and it could easily be double that projection. The 290,000 SRS households who lose PIP every year on average will largely not have been ‘benefit-capped’ in previous year nor will the 155,000 losing incapacity benefits each year … but in financial year 2024/25 (FY2425) they will be benefit capped and have their housing benefit payments cut.
The Benefit Cap policy operates by [CAP – OTHER = MAXHB] and that is how it was designed so as OTHER welfare benefits increase by £89 per month with the 6.7% inflation uplift this week for the couple with two children it means the MAXHB reduces by the same £89 per month. This is why MAXHB has been cut from £498 to £409 per month for that household cohort, a fall of £89 per month as we moved from FY2324 to FY2425 this week.
The CAB correctly state:
The Benefit Cap is a limit to the total amount of money you can get from benefits. If your benefits would add up to more than the limit, your Housing Benefit will be reduced. If you get the housing element of Universal Credit instead of Housing Benefit your housing element will be reduced so you don’t get more than the Benefit Cap.
Housing benefit and its replacement in UC housing cost element is the first and often the only benefit that is cut in its [CAP – OTHER =MAXHB] operation and why the policy premise is work or we will remove the roof over your head.
Principal amongst the many systemic flaws is the overall limit or CAP has not been uprated in 9 of its 11 year operation so when OTHER welfare benefits rise there is a corresponding cut to maximum housing benefit. It was uprated once in FY2324 and in FY1617 it was cut by 23% in the regions (£500 per month) and by 11.5% in London (£250 per month.)
In FY1314 when it began the CAP was £2,167 per month and the equivalent of £2,996 pcm today yet it is £1,835pcm in the regions and £2,110pcm in London.
16 local authority areas in the English regions have higher social rent levels than London yet London benefit tenants are allowed £275 per month more in maximum housing benefit. The policy is a political and economic sham.
Overall, the policy sees year-on-year lower housing benefit levels set against year-on-year higher rents creating an ever greater number with housing benefit shortfalls for whom the arrears to eviction into homelessness slope or pathway becomes the spectre.
FY2425 sees another phenomenon:
- Benefit Cap cuts to housing benefit for FULLY occupying the ‘scarce resource’ of social housing are greater than the Bedroom Tax / Spare Room Subsidy cuts to housing benefit for UNDER occupying that same ‘scarce resource!’
In 2012 I began posting about the systemic flaws in the overall benefit cap policy which have all manifested as de facto evidence. I projected (a) social landlords would have to operate NO DSS; and (b) housing benefit cuts would be greater in Benefit Cap than in Bedroom Tax. You can imagine the looks I got from the many social landlord audiences for those predictions in 2013 and 2014 when I presented the systemic flaw posits at various housing conferences and seminars.
One of these was a Chartered Institute of Housing conference in London in early 2014 and it took the CIH more than 3 years to confirm my NO DSS manifestation when they commissioned the University of Sheffield to look into this and the Tackling Homelessness Together research was published which included the LETWA screenshot as below:
Limited Entitlement To Welfare Assistance, LETWA, is NO DSS
by another name. The applicant
was refused social housing as they would not get enough in housing benefit to
cover the rent. Note too this is social landlords refusing homeless households.
This is also perfectly lawful providing each applicant has the same affordability testing applied and thus no unlawful discrimination. Indeed the Bedroom Tax with its 14% or 25% cuts to housing benefit is merely a variant of it. Since July 2017 when the Tackling Homelessness Together report was published LETWA / NO DSS has become endemic in the social rented sector and operated by all council and HA landlords to ever greater numbers of benefit households matching the year-on-year cuts to maximum housing benefit payable under Benefit Cap.
The maximum Bedroom Tax housing benefit cut in any 2 bed property is 14% and my table below shows the percentage housing benefit cut for the couple with two children in the cheapest 2 bed social rent property across England for this year (FY2425) and the following two years using the 2.5% and 2.8% CPI projections from the Bank of England MPC in March 2024.
As you can see in the English regions but not in London the percentage cuts from Benefit Cap far outweigh the maximum 14% cut to housing benefit in the Bedroom Tax policy.
The precise figures I have collated from official rent data (Statistical Data Return) for each of the 300+ local authority areas of England at 1 – 4+ bed sizes and at social rent and affordable rent tenures details the scale of housing benefit cuts to within ±1% of the average rents charged.
The scale of these housing benefit cuts means the benefit household will never again be granted a social housing property AND as mentioned earlier, the English SRS sees 2.45 million existing households reliant on housing benefit to pay their rent and who will very quickly see a housing benefit shortfall and face the arrears to eviction into homeless (AEH) slope.
The level of apathy and indifference to this from social housing and homeless and poverty lobbies is astonishing. None of them have excuse for ignorance on how Benefit Cap works or do politicians, academics or activists as we have had over a decade of irrefutable fact to show how the Benefit Cap policy works
When these ‘experts’ and ‘usual suspects’ all wake the f*ck up?
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Further sources and further information:
The 21% who lose PIP each year
Lord Freud, the Minister for Welfare Reform in 2013 when the policy began, stating, in December 2021 that the Benefit Cap policy does NOT save the taxpayer and the government refuse to conduct an impact assessment on it in an article in NewStatesman.
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