The Benefit Cap: hurting homeless families

So you’ve been hit by the benefit cap. You spend months juggling rent payments, gas and electricity bills, and raising young children, all while trying to find a job. Maybe you swallow your pride and get a referral to your local foodbank when things get really bad. Eventually, you can no longer afford to pay the rent (feeding your children comes first, right?). Your landlord evicts you. You fall back on the council for support. That’s a traumatic enough situation for most people to go through.

So what happens next? You’re placed in temporary accommodation. And surely the cap is removed, while the right solutions to your homelessness are found? Wrong. Shockingly, people who find themselves homeless are still subject to the cap, even when living in temporary accommodation such as bed and breakfast, hostels, and flats that may be miles away from their local area, job opportunities and the support networks that will enable them to work.

Unpublished data seen by Shelter shows that 27% of capped London households are currently homeless and living in council run temporary accommodation. In some areas this is as high as 55%. And this bleak picture is only going to worsen, with the number of affected households estimated to quadruple once the cap is lowered to £440 per week in London, £385 per week elsewhere.

But what does this mean for homeless families and councils? Councils have a duty to provide temporary accommodation that is affordable to homeless households, in other words it has to be covered by housing benefit, which is already subject to strict controls. If they can’t, councils end up paying the shortfall between housing benefit and the cost of the temporary accommodation, squeezing already limited budgets and diverting funds away from other services.

The benefit cap, which takes money off housing benefit, means that councils are taking a significant financial hit for every homeless household that they assist. Far from saving the taxpayer money, the cap is pushing costs onto local councils.

One way that councils can afford to provide temporary accommodation to capped homeless households is to find properties that are in cheaper parts of the country. But moving households out of their local area can seriously damage their employment prospects, as areas with cheaper housing tend to also be areas with fewer job opportunities and lower pay. This is a baffling outcome, given that the cap is intended to move families off benefits and into work. It is also means that homeless households that are working just a few hours a week (so perversely counted as out of work by the cap) because they’re juggling work with childcare commitments, are forced to abandon their job.

Instead, the government need to provide a grace period from the benefit cap for households found homeless by their local council. This exemption is by no means the answer to the all of the problems caused by the cap, but it would give councils some breathing space, during which time they could explore proper housing and employment options. Meanwhile, homeless households would have time to adapt to their situation, and would be more likely to improve their work situation in or close to their local area.

The Welfare Reform and Work bill is winding its way through Parliament and will be debated by MPs again on Tuesday. There’s still time for the government to help homeless households by considering an exemption to temporary accommodation. There are obviously some short-term costs to this; but many of these are already offset by the knock on costs for local authorities. More importantly it ignores the opportunity for longer term gain; giving homeless families relief from the cap will help keep them in their local area, importantly increasingly their chances of moving into work or of finding the right housing options.

We need MPs to stand up in parliament and voice their concerns about the damage the benefit cap is doing to the lives of homeless families.

  1. “nd this bleak picture is only going to worsen, with the number of affected households estimated to quadruple once the cap is lowered to £440 per week in London, £385 per week elsewhere.”

    There is a multi-pronged attacked on tenants on welfare. The Government introduced LHA, so that the rent was paid to the tenant not the landlord. They then have largely frozen housing benefit since 2008 and it will be frozen until 2020. Even then, the benefit cap has been reduced down to £23,000 or £20,000.

    The matter is made worse, because of the new taxation on private landlords. You could have a situation where the landlord is making a loss on renting the property, but still has to pay tax. (Shelter supports the increased tax).
    (A simple example to illustrate problem. You buy a shirt for £10, you sell it for £9. You have made a loss of £1, but the government is saying, your profit is £10. So you have to pay 40% tax on £10).

    You then have councils thinking of ways to fleece landlords, by introducing Licensing. So landlords have to find several hundred pounds for a licence to rent (Shelter support licensing).

    1. You are possibly the l/l that was on here last year that said it took you a minimum of 23 wks to evict on ASB- If not apologies.
      I almost think London should be treated as a separate economy. There are not that many affected by the benefits cap in my city. I do think that a cap at 22,880 net , £20,020 elsewhere is reasonable-its still more than lots of people earn full time once they have paid tax, N.I.
      I’m not sure why Shelter think people can’t go to work and have children, many of us have done for years-c/care costs-that’s another issue.
      LHA-that makes HB simpler to administer doesn’t it? In my second last job we couldn’t keep up with some of the multi occs via the Rent Officer-that would be easier as life became more computerised.
      IN an ideal world house prices would come down lots, in theory feeding into lower rents. Yes that affects me- a house is a home first. Yes I do know that means negative equity, those care home costs , the Chancellor can’t borrow as much.

    2. Not ducking other issues-tax-I don’t know -not had time to look into it. Registration/licensing-as Welsh Assembly and Scottish Govt. have made some moves on this should be possible for say JRF/RICS to report on effects. Doubtless you pay your tax and run decent properties and are paying the price for those who do not and its how to target them.

  2. I have spent almost half my life homeless…the rules keep changing…you can’t progress much without stability…food and shelter. If you lose your roof or get into arrears/debt…you can lose your children to social services…no home…no life…just survival.

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