Published: 8 Feb 2019 by Jo Underwood

Last week, we intervened in a key case concerning homelessness, where a family who were evicted because of a Local Housing Allowance (LHA) shortfall took their challenge to the Supreme Court. (Samuels v Birmingham City Council UKSC 2017/0172). LHA is the housing benefit provided to those renting in the private sector. But, as a result of housing benefit policy and rapidly rising rents, the benefit provided increasingly does not cover the rents people have to pay.

Issues in the case

Along with the Child Poverty Action Group (CPAG), we intervened in support of Ms Samuels, a lone mother who was treated as intentionally homeless because she didn’t use her non-housing benefits, that are intended to cover other living costs, to cover the £35 weekly gap between her LHA and her rent.

Ms Samuels ended up in rent arrears so her private sector tenancy was ended. Unable to find another rental property, she and her children became homeless. But Birmingham City Council refused to accept a duty to house her. They treated her as intentionally homeless because they considered that she could, in theory, have used some of her non-housing benefits to make up the shortfall between her LHA and her rent. On this basis they made the decision that her previous home had been affordable for her. This decision had a devastating impact on the family and, over five years after their legal challenge began, they remain in limbo in temporary accommodation.

Being found ‘intentionally homeless’ is a terrible situation for a family. It means that the council’s housing department no longer has a duty to help them. It means that families have to rely on the support of friends or family, or overstretched social services departments.

Our intervention

We intervened in this case because it raises important issues for many other families across the country, in the same situation as Ms Samuels. Our analysis shows that as of April 2018, for a three-bedroom home, LHA falls short of rents in 97% of England’s broad rental market areas.

When families are then expected to use subsistence benefits to meet the shortfall in their rent on an ongoing basis, they are left with too little to live on to meet their other essential costs such as food, utility bills, and clothing. One of the key questions the court will have to decide is whether it is lawful for councils to expect families to dip into their subsistence benefits (which are meant to cover essential living costs) in order to meet shortfalls between their housing benefit and their rent.

When someone falls into rent arrears, is evicted, and applies as homeless, the council must decide whether their previous property was affordable, carrying out an assessment of the rental costs and what the household could reasonably have been expected to spend on essential living costs whilst also maintaining rent payments. We have uncovered some concerning practices amongst local authorities, when assessing whether families should be found intentionally homelessness. Not only are local authorities expecting families to use subsistence benefits towards rent, they are being inconsistent when they make decisions regarding how much of these benefits should be diverted towards paying their rent.

The problem with this exercise is that central guidance on these assessments is sparse and local authorities have developed widely varying practices. Different authorities use different guideline, or ‘model’ budgets to assess essential living costs.  A homeless applicant might be considered to have a reasonable household budget in one area, but if they applied to a neighbouring authority, the assessment of their essential costs would be very different. Even more worrying, some of the assessment measures are so harsh that a family would be expected to live in abject poverty.

Finally, LHA rates have been frozen since 2016 and this glaring issue looms large over families faced with the same situation as Ms Samuels. These rates are not set to unfreeze until 2020; meanwhile, rents continue to rise and there is a growing shortfall between the amount of LHA families can claim and rental costs. Shelter solicitors and advisers across the country see families struggling to top up LHA shortfalls. Whilst LHA rates do not keep pace with rents, Shelter, CPAG and other charities and advisers will continue to hear from more and more families who are faced with the choice between paying their rent or feeding their children.

What happens next

Ultimately, this will continue to be an impossible choice for families as long as the LHA rates fall far short even of the bottom third of rents (where they are meant to be). The gulf between the cost of renting and LHA rates will continue to grow unless the freeze is ended and LHA rates brought up to a level approaching actual market rents. We also need government guidance to authorities that strongly reinforces that subsistence benefits should not be expected to cover housing benefit shortfalls.  We await the court’s judgment in Ms Samuels’ case, but whatever the outcome, a major change of direction is now needed to stop more families suffering the trauma of homelessness.