Housing Benefit – 94% not on the dole and other facts

Did you know that 94.1% of Housing Benefit recipients are NOT on the dole?

The official figures released by the DWP in February 2017 show that just 5.9% of those receiving Housing Benefit are on Job Seekers Allowance or dole.

There are 4 times as many people in work at 1.04 million who receive HB than the 268,193 who receive the dole and even more disabled persons than that with 1,164,606 who receive ESA and what we used to call Incapacity Benefit.

Facts as I always say are very pesky indeed and refute the many myths around Housing Benefit that regrettably remain pervasive

The chart above is from the official data at Table 6 below

Ever since coming into office in May 2010 the Tories have been keen to cut the Housing Benefit bill and have emphasised that outside of State Pension (aka old-age pension) at nearly £98 billion per year, Housing Benefit is the second highest social security spend at £24 billion per year.

The Tories stated in July 2010 that they intended to cut the Housing Benefit bill in real terms by “…almost £2 billion per year…” (HB Digest June 2010) using mainly what we mistakenly label ‘welfare reforms’ when in fact they are cuts to Housing Benefit entitlement and nothing more.

The DWP said in its magazine called HB Digest published in early July 2010 that:

The Chancellor announced a package of Housing Benefit (HB) reforms in his Budget statement on 22 June. Ministers are clear that the overall cost of HB, forecast to be around £20 billion this financial year, must be controlled and reduced. The package of reforms will save nearly £2 billion by 2014/2015

There have been many HB cuts, at the last count I had 25 in total, yet the most known are the major policies such as bedroom tax, benefit cap, original LHA cap, increasing the shared accommodation rate (SAR) from those under 25 to those under 35 years of age, and the LHA maxima cap and shortly the application of SAR to social housing and the banning of 18 to 21 year olds from receiving HB.

Did you know the bedroom tax etc increased the HB bill by over £1bn?

Despite these HB cut policies and their aim of reducing the HB bill by £2 billion per year by 2015 the Institute of Fiscal Studies said here in January 2015 that they increased the overall HB spend by over £1 billion and in real terms.

The myth that the bedroom tax and benefit cap et al saves money is perhaps the most enduring myth of the lot and a myth that will never be corrected as the general public and opposition MPs can’t believe that a cut in housing benefit entitlement can lead to an increase in the overall HB bill yet it does: The facts prove it just as they prove that almost 19 in 20 who receive housing benefit are not on the dole.

Facts as well as being pesky can also be complex and difficult to explain! Yet facts they are and numbers, unlike politicians, don’t lie and two plus two always equals four.

Bizarrely, it is also social landlords who chose not to believe facts about Housing Benefit such as there are 3,145,653 social housing tenants who get HB – which if there are 4.3 million social households means 73% of social tenants get housing benefit … and a point one social housing Chief Executive said was an outrageous assertion when I posted this on Twitter about 6 months ago.  If there are just 3.9 million social tenant households as the EHS survey of 2015 suggests then this is almost 81% of social tenants who get HB.

Housing Benefit and social housing are inextricably linked

Whether it is 73% or 81% HB and social housing go hand in hand (not hand in hand out as just 5.89% are on the dole!) and this will never change, at least quickly, because those who are sick or disabled or of pension age or those who need support can only live in social housing as the private rented sector model does not include the SODS (Sick, Old, Disabled, Supported).

What this means is that every change to Housing Benefit regulations significantly alters the operation of the social housing model.

A classic example will shortly be that the many tens of thousands of social tenants and their landlords who have come to rely upon a Discretionary Housing Payment (DHP) for bedroom tax purposes are in trouble as DHPs will transfer to overall benefit cap cases and away from bedroom tax cases as this suits the local councils who administer them.  The more DHP councils pay for benefit cap the less cost those councils will face in terms of homelessness and this change will radically alter the day to day operation of arrears practices of social landlords.

The overall benefit cap being reduced by 23% in the regions and by £500 per month will also impact on existing tenants and especially on new tenants as much tighter affordability tests will be taken on the 385,000 new tenants in England that social housing has each year.

The social landlord, whether HA or council, is highly unlikely to accommodate the Simpsons – the household of a couple an 3 children – as they will only receive £50 a week or so in HB due to the way the overall benefit cap works by cutting HB.

This not only impacts on allocation policies but also on future development policies too as in essence the overall benefit cap makes the ubiquitous 3 bed social housing property (36% of all social housing) a financially toxic product to the family on benefit.  The prospective tenant can’t afford and the landlord can’t afford the benefit tenant.

The LHA Maxima Cap policy will limit HB to the Local Housing Allowance (LHA) rate in 2019 yet applies in the legacy system of HB to new tenants from April 2016 and to all social tenants including pensioners when they move onto Universal Credit.  There are estimated to be at least 515,000 pensioners in general needs social housing who under occupy their property and while now they are exempt from bedroom tax, they will face the back door bedroom tax that the LHA Maxima Cap policy imposes.

Shortly, all social landlords who have evicted some mostly single persons or couples with the bedroom tax, will be faced very shortly with the prospect of evicting children with the overall benefit cap which targets children (and in a few years of evicting the pensioner with the LHA Maxima Cap policy!) which is not only a huge problem for social (?) landlords but also for education, social services and many others.

All of this major operational change to the social housing model has come directly from cuts in entitlement to Housing Benefit.

The most radical change and indeed the death of the social housing model created in the 1948 Welfare State is that social landlords will refuse to accommodate those most in need with the overall benefit cap – the Simpsons family scenario above as they will get a massive cut to their HB entitlement and thus will not be housed by HA or council landlords.

Some households and this applies in the social rented sector not that you would know that given the pitiful Channel 4 Dispatches programme* on the benefit cap last night – aided and abetted by a truly one-sided Shelter report that focused ONLY on the private rented sector (!!!!) – will only get fifty pence per week in Housing Benefit and landlords will have no choice but to refuse and why the language here is definitive … unlike the definitive language the DWP used in July 2010 to say the HB reforms WILL save nearly £2 billion per year that have in pesky fact come back to bite the government on its backside by increasing the overall HB bill!

___________________

* £166 per week DHP paid to the lone parent tenant of 3 children in Croydon – (a) that is the same as paying 8 tenants there a bedroom tax DHP of just over £21 per week which is the Croydon average and (b) shows how the DHP system robs Peter to pay Paul, and (c) demonstrates that all LAs will do this as it saves them more money in homelessness cost as I said above; and (d) as the benefit cap has only been cut by £57.69 per week in London this tenant was already benefit-capped by £109 per week before the £3000 per year reduction began in Croydon
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8 thoughts on “Housing Benefit – 94% not on the dole and other facts

  1. Joe You can’t have it both ways and the stats you rightly highlight actually undermine one of your key predictions over the impact of the benefit cap. The high number of hb claimants who are in employment; the high number who are on ESA  (and around 20-30% of those will be in support group, with an unknown number also in receipt of PIP); the unknown number who have a child with dla; the number who are carers; the number who are pensioners…..all exempt from benefit cap. As we’ve discussed previously, these are precisely the reasons why the DWP estimate of the numbers affected by the cap were around 1/3rd of your predicted numbers, and the recent stats support that analysis. I’m glad that the figures are lower than you predicted and I hope you are too!Gary

    Sent from my Samsung device

    1. No they do not undermine it at all and you are conflating very different issues.

      You also say (are you being serious!!!) that the recent DWP stats on the benefit cap are in any way shape or form credible??? They measure the position as at 10 November 2016 which is (a) 3 days after it began in less than one-third of all areas, (b) in the areas with the lowest known numbers; (c) only included 22% of those first tranche given the reporting dates for each LA; (d) be definition could could not include UC cases in this data … and I could go on and on as to why those figures have no credibility whatsoever.

  2. I’m sure the governments figures over the Bedroom Tax do NOT include the legal costs they have spent taking people to court, up to the Supreme court. I don’t think we will ever know the complete total. Of all cases put together. This then makes their total figures totally, misleading.

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