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Changes to rent and Housing Benefit - Budget 2015

Changes to rent and Housing Benefit announced in the Budget

Rent Levels

The chancellor announced a reduction in social sector rents by 1% for four years from 2016, but it is not yet clear how this will work.

We will have further details after the legislation is published by government. We will always provide at least four week’s notice of any rent change.

Our rents are set in line with legislation, and we always comply with the law.

Benefit Cap

The chancellor announced a reduction in the amount any household of working age can receive in benefits. Although we think this might change from April 2016, the actual date of the change is not yet confirmed. The amounts of the cap will be:-

In London

£23,000 per year (£442.30 per week) for families, couples and lone parents and £15,410 per year (£296.35 per week) for single people

Oustide London

£20,000 per year (£384.62 per week) for families, couples and lone parents and £13,400 per year (£257.69 per week) for single people

This does not apply to:

  • pensioners
  • people receiving working tax credit or those in receipt of Attendance Allowance
  • the support component of ESA
  • War Widow/Widower’s Pension
  • Disability Living Allowance (DLA) or its replacement Personal Independence Allowance (PIP)
  • Industrial Injuries Benefits
  • Armed Forces Compensation Scheme payments,
  • War Pension Scheme payments (includes War Widow’s/Widower's Pension and War Disablement Pension).

We do not know if you will be affected as we don’t hold details of your income. To work out if you may be affected, add up all of the money you receive in benefits – don’t forget to include your housing benefit, child tax credits, child benefit, and any other benefits you get (except Council Tax support which is not included) and if this comes to more than the amounts above, your benefit will be cut. This will either be cut from your housing benefit amount or universal credit.

If you are already affected by the cap, you will have your benefit cut by another £3,000 if you live in London and £6,000 if you live elsewhere. Note: we do not know what will be counted as ‘London’ – this could be the London boroughs, but this has not been clarified and is unlikely to be until the legislation is written.

You may be able to get discretionary housing payment from your local council to help cover the shortfall, but you should talk to your council about this and when you can apply. It’s a limited pot of money, so the sooner you apply the better.

There is more information about welfare reform on the government website.

Market rents for higher earners

The chancellor said that those who earn more than £30K (and more than £40K in London) should not benefit from cheaper social rents and should pay the market rate. We are currently waiting for the government to draft the details about how this may work. It is not yet clear how we would gather this information, or if it will be provided to us by government departments. We will let you know the details via our customer magazine when we know more. You will always receive at least four weeks’ notice in writing before we change your rent.

 


The Chancellor’s announcements set out three key areas of spending cuts to achieve the Government’s £12bn welfare savings that will have the greatest impact on the housing sector.  

Read the response from Paul Tenant, Chief Executive of Orbit Group.

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