The Scottish Federation of Housing Associations (SFHA) has raised concerns about the inconsistent messaging from the Department for Work and Pensions (DWP) following their claim the LHA cap – dubbed the Bedroom Tax 2 – will not apply to existing tenants.
The DWP statement in a Scottish Herald article on 3rd January claimed the ‘cap’ on social housing rents “are about restoring fairness to the system and ensuring that those on benefits face the same choices as everyone else. The reality is, nothing will change until April 2019 and existing tenants will be unaffected”.
Mary Taylor, CEO at Scottish Federation of Housing Associations, said: “The DWP spokesperson was at best unaware of the statement made to the House of Commons on November 21, where Secretary of State for the Department of Work and Pensions, Damian Green, said ‘to ensure simplicity and a streamlined process, Local Housing Allowance rates will apply to all new and existing tenants’.
“The only tenants who will avoid the imposition of the LHA ‘cap’ are those on Housing Benefit whose tenancy started before 31 March 2016. Different arrangements are being made to ensure the most vulnerable people in supported accommodation are not affected with details yet to be clarified. But otherwise, if a tenant started a tenancy on or after 1 April 2016 and is on Housing Benefit, they will be hit by the LHA cap, as will anyone on Universal Credit, regardless of when their tenancy started.
“Many tenants of housing associations rely on Housing Benefit to pay rents as low as £70 a week. This measure will have a profound impact on housing associations’ capacity to sustain decent housing, in particular for people on low incomes – never mind build more.
“To give just one example, Langstane Housing Association in Aberdeen has 2800 homes for rent – 1700 of which comprise bedsits and one bedroom flats. Since April 2016 they have let 77 properties to single tenants under 35, almost half of whom needed help with their rent. In addition, more people are being moved on to Universal Credit: Langstane’s experience so far of Universal Credit has been troublesome, with 75 of the 95 tenants already on Universal Credit in arrears to the tune of £65,000.
“The financial implications of the whole raft of eligibility changes to come and Universal Credit administration problems are very serious for tenants and housing associations alike.”