If you are sick, disabled or unemployed and the Tories are not voted out in May you will be evicted and you will have nowhere you can possibly live. The overall benefit cap proposal will mean you work or are evicted and that applies even if you are sick or disabled and unable to work.
It means that a social landlord – a housing association or council landlord – which are the cheapest forms of housing is unaffordable to the sick, disabled and unemployed tenant as the social landlord cannot AFFORD to have you as a tenant.
It means the sick, the disabled and the unemployed have nowhere to live at all. It means the social housing model of HA and council landlords is dead.
How does the benefit cap work?
- The cap figure which is now £26,000 per year or £500 per week is the starting point.
- From this figures the amount of welfare benefit and tax credits the tenant household receives is deducted leaving a maximum amount that household will get in housing benefit – HB in social housing or LHA in privately rented.
- So if the household gets £400 per week in welfare benefits and tax credits if will get a maximum of £100 per week in housing benefit.
A simple process with the housing benefit being the one benefit which is reduced by this cap. Note the amount any households receives in welfare benefit and tax credits is the same whether it lives in London or Land’s End or John O’Groats. The figures are the same right across the country on other words.
What are the Tories proposing?
Firstly, they have already confirmed the £26k per year cap will reduce to £23k per year (£440.79 per week) and Cameron again confirmed that in conversation with Paxman in the Battle for Number 10 TV programme this week
Secondly, today, there has been a leak of proposed Tory policy to say that the £23k cap will apply in London but will be less in the rest of the country as a new regionalised policy to reflect the higher cost of living in the capital will be put in place.
Regional Benefit Caps - The £23,000 limit would vary in different parts of the country, with for instance Londoners receiving the top amount due to the higher cost of living. Possible saving – not known and dependent on where levels were set
What does this all mean?
As stated above the amount of welfare benefit and child tax credits a household receives is the same across the country – the same in London as they are in Liverpool or any other lower rent and cost of living area. A couple with 3 children gets the same amount of money in London as a similar household gets in Liverpool.
The amounts of other welfare benefits and tax credits is therefore fixed wherever you live and depends on your household composition.
Below is a table which gives these figures and also includes columns showing the maximum amount of housing benefit each household size will get if the cap is at £23,000 per year and at 90% of that (£20,700 pa) which I have used to apply the reduced regional benefit cap proposed for say Liverpool.
What does this mean?
The table above is self-explanatory. So find the household size in the left-hand Column 1 and we see a 2 parent 3 child household gets £334.56 per week in welfare benefit and child tax credit as shown in Column 2. That means if the cap is £23k per year as proposed in London that household will receive a maximum housing benefit of £106.23 per week as shown in Column 3. If they lived in say Liverpool – and lets call them the Smiths – they will get a maximum HB of £63.52 per week under the regional benefit cap set at 10% below London figures and as shown in Column 4.
So the Smiths are fine with Mr Smith working and Mrs Smith being an at home mum – the old nuclear family scenario – and one day Mr Smith gets run over by a bus or loses his (zero hours contract) job or cannot work for some reason. All of a sudden they become a benefit family. They will only receive £63.52 per week in housing benefit and their rent on a 3 bed housing association property is £100 per week.
They cannot afford to find the £36.48 per week in rent from their welfare benefits and tax credits (even if they use foodbanks too!) and so pretty quickly they will be evicted unless Mr and Mrs Smith can find a job paying 18% more than the national minimum wage for 35 hours per week. In short get a job or get evicted.
It also means that social landlords cannot afford the financial risk of any 2 parent 3 child household – existing tenant or prospective new one – and even if they are working as should they job be lost then this household becomes a financial risk too far for the landlord given HB will not cover the rent in a low rent area for the cheapest form of rented housing!
Families split up and circa 1 in 2 marriages end in divorce? So Mrs Smith tells Mr Smith she is somehow pregnant and Mr Smith says I am leaving you for my secretary [Ignore the sexist nature reader just one example of how things can happen] and so Mr Smith buggers off to see if the grass is greener leaving the Smiths as a one parent 4 child household.
The Smiths now get £359.86 in welfare benefit and child tax credit leaving her just £38.22 per week as the maximum she receives in Housing Benefit.
Of course it could be Mr & Mrs Smith and the 3 children, one of whom has ‘special needs’ and why Mrs Smith is a stay at home mum, decide to have another child and become a 2 parent 4 child household. Then Mr Smith, the sole wage earner gets run over by a bus – or any of hundreds of scenarios why this may happen. Mrs Smith may not work because she also looks after her ill mother who lives around the corner etc.
Whatever the scenario Mrs Smith has a choice – get a job or get evicted.
The above illustrate the huge superficiality in the overall benefit cap policy. We can all easily foresee how so many households – existing benefit households or newly created ones through losing a job – can be caught by the extremely pernicious benefit cap policy. Yet the policy has huge public support and even social landlords are blase about it believing it only affects the private tenant in a high rent area which is absolute naivety.
All social landlords – yes those so blase why believe the overall benefit cap does not affect them – should be able to interrogate their rent systems to see how many households they have with 3 or more children. The national figure from an old FOI request is below and reveals that 22.87% of all households in receipt of out of work benefits have 3 children or more.
Social housing has 4 million households of which 69% are of working age (the pensioner is exempt from the benefit cap) and so this can apply to 2.76 million working age social tenants alone. Of those 2 in every 3 are on Housing benefit or 1.84 million households. If 23% of them are at risk then this is 423,000 social tenants at risk of eviction and homelessness because of the benefit cap proposals
FOUR HUNDRED & TWENTY THREE THOUSAND HOUSEHOLDS OR ONE MILLION MEN WOMEN & CHILDREN
So given even in a low rent area such as Liverpool or Hull any household with 3 or more children becomes a financial risk too far for the social landlord because of the benefit cap proposals then 1 in 4 social tenants become this financial risk too far for social landlords!!
Cue social landlords panic and rightfully so. Yet if such households are at risk of very quick eviction if they become a benefit household by losing a job or Mr Smith buggering off with his secretary or any other reason then it means the household with 3 or more children cannot afford even the cheapest place to rent anywhere in the country!
Work or get evicted and keep you legs closed woman!!! That is the twin message the Tory coalitions benefit cap policy means. In today’s zero hour contract uncertain employment world in Britain very few have a job for life or any form or reliable employment and the benefit cap policy is a ‘there for the grace of God go I’ issue and NOT limited to the scrounger / shirker / White Dee lifestyle choice ne’er do well.
Given the numbers above I wonder how and why the general public are so hugely in favour of the benefit cap policy! If they realised it is a case of ‘there but for the grace of God’ policy as I have explained then the general public would surely be massively against such a policy. Yet they have been sold it as only affected the shirker living in a £2m mansion in Islington at the public and taxpayer expense and nothing more.
Social landlords reading the above will rightly shit themselves at what the overall benefit means as it does mean the end of the social housing model for the country. No amount of informing them in the past which I have done for 3 years or more has changed their view of the benefit cap only hitting the private tenant and only then in high rent areas. Yet as the above explains this hits a couple with 3 children in Hull living in the cheapest social housing.
What did the social housing sector say last week – Its time to make a fuss?
It is time the incredibly stupid and naive social housing sector realised what the hell the benefit cap means for them – the social housing model is directly under massive attack from the benefit cap policy and they haven’t even realised it!!
Now how many blogs have I written saying the ‘sector’ needs to think about what the welfare reform (sic) policies mean? Yes scores of them and been lambasted by the social housing sector for saying they have not thought!!!
If you are workless – meaning unemployed or unable to work through sickness or disability or other health reasons – or your husband buggers off with his secretary, then you are evicted and will have nowhere, absolutely nowhere at all to live if you do not get a job.
Where will the many tens of thousands if not hundreds of thousands of such families live? How many BILLIONS of pounds extra will this cost the taxpayer in hugely increased Housing Benefit payments for temporary homeless provision for these households who can not live anywhere else?
Just how fecking stupid and incredibly ill-conceived is this policy? Well apart from being much less stupid than the mind-blowingly stupid general public and social landlord who believe the benefit cap policy has any merit at all!
Yes the benefit cap will affect private tenants too and of course they will be evicted far quicker than the social tenants for benefit cap arrears. As to what number of private tenants will be evicted it is too hard to estimate but the original benefit cap estimate had PRS tenants at 54% of all tenants affected and social housing tenants at 46% of the total – so 423,000 SRS households affected on that comparator would see 495,000 PRS households or an additional 1.2 million men women and children.
If so the HB bill will rise astronomically and possibly by more than the £12 billion cuts the inept Tory coalition is seeking. Huge Tip – by as many run down cheap delapidated B&Bs to rent back to councils as huge rents!!!
More importantly the Labour Party has said it will keep the benefit cap and all other welfare reform policies of the Tories and only abolish the bedroom tax policy. That means and can only mean that Rachel Reeves and the Labour Party itself does not have a clue as to what the benefit cap and other welfare reform policies mean and they are well and truly incompetent.
The above benefit cap for SRS and PRS households could well be 2.2 million men women and children or if you prefer the population of Liverpool, Manchester, Bristol, Newcastle and Brighton ALL made homeless.
But I must be making all of the above up dear reader as despite the figures proving my points, the Labour Party see no ills in the benefit cap; neither does the social housing sector and neither does Joe Public!!
Just been asked about single person rate which is set at 70% of family rate as now so current £500 cap for families is £350 pw for single persons.
£23k cap in London takes this down to 70% of that figure or £16,100 per year which is £308.56 per week.
Given dole (JSA) will become £73.12 per week in April with the 1% increase as shown above it means the single person will only receive £235.44 per week maximum HB in London. Given the 1 person LHA rate for parts of Central London is this year £258.06 per week it means the single person there will need to find £22.62 out of their £73.12 dole to pay the rent! And that assumes they can get a 1 bed property from a private landlord at £258.06 per week / £1117.40 pcm too!
What was that about benefit cleansing in London!!! Anyone still think the Tories overall benefit cap is good? Does that include the Labour Party who want to continue with it? Is Rachel Reeves strategy it is better for 2.2 million men women and children to be made homeless rather than have Labour labelled as the party OF welfare for coming out against the perversely popular overall benefit cap!! Hell Yes!!
Today sees Iain Duncan Smith admit he will not say where the £12 billion of welfare cuts in the first two years will come from. As I said before the scale of the £25 billion of total welfare cuts means they cannot come from those of working-age alone, who receive £54 billion per year and must come from the pensioner too as they receive £116 billion per year in welfare spend.
However IDS predicts the reduction in the benefit cap will save money yet it will significantly increase the welfare spend by as much as £3 to 5 billion per year due to hugely increased HB costs in homelessness. So to achieve the cuts targets the actual cuts will need to be £3 – 5 billion more due to the cock up with the benefit cap. This will exacerbate the current position which shows, from the official figures produced by the DWP, that the 4 welfare reform policies that sought to reduce HB (bedroom tax, benefit cap, LHA cap and SAR cap) actually cost MORE in housing benefit as that has increased in real terms!
Then imagine you are a social landlord. The bedroom tax means you cannot under occupy an empty property as the financial risk is too great. Now we see the benefit cap meaning the social landlord cannot afford to fully occupy an empty property as the financial risk with the benefit cap is much greater. The social landlord cant under occupy and cant fully occupy, or in simple terms they are fecked whatever way!
There is national outrage largely thanks to campaigns by Shelter that 90,000 children spent Christmas in temporary homeless accommodation. Yet if the benefit cap reduction happens as is being stated above next Christmas there may well be 500,000 children in temporary accommodation and 90,000 will appear to be nostalgia!