- Created: Wednesday, 05 April 2017 14:44
- Written by Robert Clough
68,000 families with 200,000 children have now been hit with the reduction in the Overall Benefit Cap (OBC) that was implemented over a three-month period to January 2017. These are among the poorest families in the country – yet on average they are having £58 a week taken away from them. The measure, which hits single parent families in particular, is one of the most punitive cuts in benefits implemented by the Tory government, and will inevitably lead to mounting rent arrears, court action, eviction and homelessness for thousands. Robert Clough reports.
The original OBC came into effect in 2013 and limited the total benefits a family could receive in the form of Income Support or Jobseeker’s Allowance (JSA) (or Employment Support Allowance if the household head was in the Work-related Activity Group), housing benefit and child benefit and child tax credits to £26,000 per annum. Housing benefit for the family would be cut to ensure that this maximum was not exceeded. Now the limits have been slashed to £23,000 per annum in London, and £20,000 outside, with the maximum for single people without dependants set at two-thirds of these levels (£15,410 in London and £13,400 outside). The principal exemptions are where the family is in receipt of working tax credits (that is, working more than 16 hours a week if single, or 24 hours if a couple) or where there is a family member in receipt of Disability Living Allowance or Personal Independence Payment.
Figures obtained by FRFI through Freedom of Information requests to 37 local authorities during February 2017 (and including twelve London boroughs) show the savage impact of the reduction in the cap.
- The number of families hit by the £3,000 cut has more than doubled, rising from just over 8,000 in November 2016 to 16,900 in February 2017.
- 40% of the increase was accounted for by nearly 4,000 single-person households without dependants: with Local Housing Allowance (LHA) rates around £13,000 per annum for one-bedroom flats in most of Inner London, it is evident that the OBC limit of £15,410 will be breached for many given that JSA or Income Support amounts to £3,800 per annum.
- The number of families affected has more than quadrupled from 12,000 in November 2016 to 51,000 now. There are 170,000 children in these families.
- 80% of those newly affected by the OBC are families with three or four children.
- 52% live in social housing.
- Nearly three-quarters of the 51,000 families (72%) have a single parent, and over half (54%) are single-parent households with three or four children.
- The average cut in housing benefit for families is £58 per week. However, this masks significant variations: a single parent with three children will suffer a £35 per week cut in their housing benefit. With four children, the cut becomes an average £69 per week in social housing and £86 per week in private rented accommodation – thousands of pounds a year to be found from their other benefits.
Over £200m pa is being axed from the housing benefit of the 68,000 families. The government says that in the event of hardship families can be supported with local authority Discretionary Housing Payments (DHPs). But the whole central government allocation for 2017/18 is only £166.5m, of which just £67.5m is designated for benefit cap cases. The DHP budget for the majority of larger local authorities will be less than the total housing benefit removed from OBC-hit families. In Birmingham, for instance, the 2017/18 DHP budget is £5.3m while the housing benefit cut for 2,951 families is £9.3m. But this budget not only has to address their needs, but those of 9,000 households forced to pay the Bedroom Tax, the thousands hit by benefit sanctions, families unable to pay rent to a private landlord because of the continuing freeze on LHA, or those who are forced into destitution because of the six-week delay in receiving a Universal Credit payment.
The Tory government and the ConDem coalition before it have tried numerous measures to cut both eligibility for housing benefit and its level. The Overall Benefit Cap is just one means among many which include:
- Cutting LHA rates from the 50th percentile point of local private rents to the 30th percentile point in April 2011.
- Raising the age of eligibility of single adults without dependants or disability for the single bedroom rate for housing benefit from 25 to 35 in April 2012.
- Introducing the Bedroom Tax in April 2013 and following it up with the initial OBC later in the year.
- Freezing LHA for four years from April 2016.
- Axing eligibility for housing benefit for under-21s from April 2017 unless there are exceptional circumstances – almost impossible to prove.
- Applying LHA Maxima to housing benefit from April 2018 for new social housing tenancies signed after April 2016 which will effectively extend the Bedroom Tax to pensioners since they will be only entitled to a single bedroom.
4.55 million households rely on housing benefit to help pay their rent, nearly a quarter of whom (1.04 million) are in poverty pay employment. That the number is down from a peak of 5.07 million in May 2013 is due to the transfer of 450,000 households to Universal Credit. As the cuts bite even deeper in the coming financial year, social cleansing in London will accelerate, more and more private landlords – and even social landlords – will insist on ‘No DSS’ tenants, and more and more families will face eviction and homelessness.