Supported housing and welfare reform


Today the Works and Pensions Select Committee launched its report on the support for housing costs in the reformed welfare system.  The HSEU provided evidence in writing and at one of its meetings on 29th January and raised concerns about the way people living in supported housing are being affected by welfare reform.  These concerns are reflected in the report.

On 20th March 2014, an amendment to Housing Benefit and Universal Credit (Supported Accommodation) Regulations 2014 was introduced to Parliament to clarify the way that supported accommodation is treated under Universal Credit.  An explanatory memorandum for the amendment has also been released.

The new category of Specified Accommodation is accommodation “into which the claimant has been admitted in order to meet a need for care, support or supervision.”  The accommodation must be provided by a relevant body (a housing association, voluntary organisation or registered charity) with the exception of Local Authority owned hostels and domestic violence refuges, which are also included in the definition.  Accommodation fitting this definition will be exempt from Universal Credit and the Benefit Cap but not the bedroom tax.  The definition of Supported Exempt Accommodation will remain as it is and Supported Exempt Accommodation will continue to be exempt from Universal Credit, the Benefit Cap and the bedroom tax.

The new regulation does represent a significant step forward for supported housing and introduces the idea of a register or list of specified accommodation which will be created and maintained by local authorities.  This is something which the Unit will continue to ask that landlords and support providers should have access to in order that they can be clear how supported accommodation has been categorised for the purposes of the welfare benefits system.

It does, however, remain a disappointment that the exemption from the ‘bedroom tax’ has not been extended to include local authority owned / managed supported accommodation nor other supported accommodation which falls outside the definition of Supported Exempt Accommodation.  Women’s refuges, for instance, which are owned by a local authority will continue to be subject to the ‘bedroom tax’ although they will remain outside the Universal Credit system and will not be affected by the Benefit Cap.   In a letter to the Chair of the Works and Pensions Select Committee, Lord Freud, Minister for Welfare Reform, set out his reasons for not extending the exemption from the ‘bedroom tax’. He argues that a size criteria is used by Rent Officers when they determine whether to award the local authority the full amount of subsidy to cover the cost of housing benefit or to offer a reduced subsidy because a person is deemed to be living in an unreasonably large or unreasonably expensive property.  Lord Freud argues that there is no reason to treat local authority owned / managed properties in a different way and for this reason there is no exemption from the ‘bedroom tax’.

There are various difficulties with this argument:

i) The reason that the accommodation is exempt is to prevent vulnerable tenants having to seek alternative cheaper or smaller accommodation and move. The Rent Officer restriction is to inform subsidy, not reduce the HB awarded to the claimant which would leave them with a shortfall. For non-exempt supported accommodation no such protection exists and the introduction of the under-occupation reduction has left many with a shortfall to pay.

ii) Rents in all supported accommodation are higher because of the management and other service charges so the 14% or 25% supported accommodation other than Supported Exempt Accommodation is of a much higher charge than a mainstream council rented property, leaving these vulnerable claimants with a much more significant shortfall to pay.

iii) As Dame Anne Begg states in the Work and Pensions Select Committee report, it is unreasonable to leave such vulnerable claimants relying on Discretionary Housing Payments because awards can be time limited and/or budget limited.

For more information about welfare reform go to the Welfare Reform and Supported Housing area on our website.

For more information about the new regulation, contact Yvette Burgess