Local Housing Allowance cap to apply to those on Universal Credit

Lord Freud
Lord Freud

The UK government’s cap on Local Housing Allowance (LHA) has been delayed for another 12 months for general needs accommodation but will now apply to all tenants who receive Universal Credit when it is introduced in 2019.

In a ministerial statement yesterday, minister of state for welfare reform at the Department for Work and Pensions, Lord Freud, said the application of the LHA policy for general needs accommodation will now be introduced in 2019 instead of 2018 “to align with the changes to supported housing”.

However the minister added that the LHA policy will also apply to all tenants on Universal Credit, rather than just those who sign new or re-let tenancies, which was the previous policy.

According to Lord Freud, the changes will “ensure simplicity and a streamlined process”.

He added: “People moved by the Department from Housing Benefit to Universal Credit after April 2019 whose overall benefit entitlement is lower will be protected, in cash terms, under transitional protection arrangements. On reaching state pension age Universal Credit claimants flowing back on to Housing Benefit with tenancies signed before April 2016 will also be protected.”

Gill Payne, director of policy and external affairs at the National Housing Federation, said although it will start one year later in 2019, the changes announced yesterday will impact more people than announced previously.

Gill said: “Our primary concerns are for those under 35 on the lower Shared Accommodation Rate of Local Housing Allowance. The Federation will be talking to government about safeguards for vulnerable people on this rate, for example those leaving supported housing, homeless people and pregnant women. We will also be pressing for more protection for those who are already on Universal Credit or move onto it before 2019.

“The Federation will continue to support its members through these changes and talk to the Government about the impact on tenants and housing associations’ ability to provide homes.”

A consultation has now been launched on the detail of the proposed model for the future funding of supported housing.

The consultation period runs for 12 weeks, and will also seek views on how best to fund the provision of short-term housing, such as hostels, refuges and emergency accommodation.

Alistair Smyth, head of policy at the National Housing Federation, said: “We are glad that the government is committed to continue funding supported housing at current levels, and has acknowledged that the need for supported housing will grow.

“We welcome this collaborative process and we will continue to work with the government to make sure our call for a long-term sustainable financial footing for supported housing is heard. We hope the consultation will help us and our members identify how the new system will work and to highlight once more the elements that ought to be safeguarded.

“After a year of uncertainty, the outcome of the consultation will be crucial to restoring certainty so that supported housing will be able to thrive for the long term.”

The DWP announced in September that the LHA cap for supported housing tenants would also be put on ice until 2019 when the funding for Scotland will then be transferred to Holyrood.

“Housing is a devolved matter and the appropriate funding will be allocated to the devolved administrations,” the DWP added.

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