New Lower Overall Household Benefit Cap coming: please read this post if it’s the only thing from HOOH you ever read!
On 7th November, the government begins to roll out the new Overall Household Benefit Cap.Under the new Cap, the maximum total benefits that a household can receive will be £384.62. (The limit for a single childless person will be £257.69; and higher limits will apply in London where rents are exceptionally high). This will affect a large number of Leeds families (but before you panic see below for groups who are exempt from the Cap).
As we understand it, people who are already affected by the current Benefit Cap will see their money cut again immediately from November 7th. The Leeds Benefits Service is expecting that the Cap will be applied to other Leeds claimants from early in 2017, but they have not yet been given an exact date by the DWP.
The DWP is intending to write to every household they expect to be affected by this cut. Some people will have received these letters already. If so, please check the letter carefully to see if all the details they have about your household are accurate – we have seen reports of many families being wrongly assessed and if this happens you need to tell the Housing Benefit Office (at your One Stop Centre) immediately. Please let us know as well as this information helps with the campaign against the Cap.
Leeds benefits officers are planning to speak to everyone they think will be affected. However, we do know that when the bedroom tax was implemented, a lot of people didn’t get the information they needed about things like Discretionary Housing Payment. So if you are, or think you will be, affected by the Cap and won’t be able to pay your rent, go to the Housing Benefit Office immediately and tell them you need help. We can’t guarantee you’ll get it, but the quicker you act the better chance there is of keeping your housing situation under control. And do let us know how they respond, if you can.
How the Overall Household Benefit Cap works
The cut will be applied to Housing Benefit, or to the housing support component if you have been moved to Universal Credit. What this means is that, once you have added up your JSA, ESA or Income Support, your Child Benefit and your Child Tax Credit (ie, all the money you and your children are entitled to for basic living expenses), whatever is left from £384.62 is what you have to pay your rent with. Please see see here for some examples.
Please note, the Cap does not apply to households where someone is working enough hours to get Working Tax Credit. And some other groups are exempt, for example those in the Support Group of ESA, or getting DLA or PIP. Please see our flyer (please see here) for fuller details, and if in doubt check with a qualified advice worker (eg at CAB).
Given the typical rents in Leeds, it is obvious that very large numbers of families will not be left with enough money to pay their rent. At the moment there are about 250 families affected by the current Benefit Cap, but under the new limit many families of average as well as larger size will be affected. Large families could lose their entire rent allowance, with weekly shortfalls of more than £150. The DWP is estimating that around 1,400 families in Leeds will be affected, containing over 5,000 children. We think it may be far more.
The only way for most families to get out of the Cap is by getting paid work (enough to be eligible for Working Tax Credits). In practice, this is impossible for many families, for example because they are caring for very young children, or because they are not well enough. One of the many unfair things about the Cap is that it punishes groups who are supposed to be exempt from seeking paid work – for example, single parents of children under five, and people who are in the Work Related Activity Group of ESA because they have been assessed as currently too ill to work.
Households who are unable to pay their rent can apply for a Discretionary Housing Payment (DHP). However, we expect that the budget that the government allows the council for DHP will only be a fraction of the need, and there will also be many people needing help due to the roll-out of Universal Credit. We can only imagine that many people currently getting DHP will be refused it in future.
There are many knock-on effects of the Cap; for example, the Cap provides an incentive for the council to turn a blind eye to overcrowding (larger houses cost more in DHP support for families); private and housing association landlords may calculate that they can’t afford the financial risk of “benefit tenants”. And of course there will be evictions, which are enormously costly both in terms of human suffering and in pure financial terms as the council has a responsibility to house homeless families with children.
The survival of affordable social housing is under attack on many fronts – the combined effects of cuts-related arrears and compulsory 1% year-on-year rent reductions leave a huge hole in the projected budgets of council and housing association providers, just as the government is demanding sell-offs of council properties and using more of our money to subsidise private ownership and the corporate developer. We need a huge local and national campaign to challenge these policies, and we think this has every chance of becoming a reality as the effects of cuts and privatisations across all our public services (health, education, housing, social care and welfare) hit home for more and more people. Please get involved if you can!
The next Hands Off Our Homes meeting is on Wednesday 5th October, at 7pm at the UNISON offices on Woodhouse Lane, opposite the universities and the Fenton pub. Do give us a ring or drop us a text/email if you need more info. A version of our latest flyer is also attached and can be read here page 1 and page 2