Tory benefit cuts leave households with 50p to pay rent

Written By: Ian Hernon
Published: April 21, 2017 Last modified: April 21, 2017

More than 7,500 households have lost their housing benefit and instead receive a nominal 50p a week because of the Government’s benefit cap.

And a BBC Panorama survey of hundreds of councils shows at least 67,600 homes in England, Scotland and Wales have lost some money due to the policy.

The cap is £23,000 in London and £20,000 in the rest of the country and the nominal amount is paid so that those households can claim access to an emergency fund if they need to. They have to be in receipt of some Housing Benefit in order to be eligible to apply for discretionary housing payments, a special government fund set up for those particularly affected by the cap. The amount of money above the limit is taken from either Housing Benefit or Universal Credit.

Alison Garnham, chief executive of the Child Poverty Action Group, said: “Removing people’s Housing Benefit basically means that people can’t afford their home, so it puts people at risk of homelessness.

“It also means that they have to use money that’s intended to buy food for their kids and for their other living expenses – this has to be used to plug the hole in their rent.”

Where someone finds work – 16 hours a week for single parents, 24 hours for a couple – their benefits are reinstated, and research suggested about 5% of those affected by the cap have returned to work.

But Garnham said about 80% of those affected cannot be expected to work as they are sick or have very young children.

Meanwhile, a new Joseph Rowntree Foundation report showed the Government’s two-child benefit limit, which came into effect this month, could push 200,000 children into poverty.

Shadow work and pensions secretary Debbie Abrahams said that the Tories to scrap this “inhumane policy, which will have a devastating impact upon many families on the lowest incomes in our society”.

She added: “An arbitrary cap on the number of children that the Government will help families to bring up is not only cruel, but is bad policy.

“As 90 per cent of lone parents are female it is a further example of how these six years of wasted austerity have been borne on the backs of low income mothers.”

The benefit changes were unveiled by then-Chancellor George Osbourne in his last Budget.
Support paid to families through tax credits and Universal Credit will be limited for new claims and births from now, with equivalent changes being made to Housing Benefit.

In 2017-18 the child element within Child Tax Credits and UC is worth £2,780 per annum per child. But families who start claiming tax credits or UC from April 2017 will no longer be eligible for the family element in tax credits worth £545 per annum.

Lone parents without housing costs will experience the largest reduction in their work allowance, from £8,808 in 2015-16 to £4,764 in 2016-17.

About Ian Hernon

Ian Hernon is Deputy Editor of Tribune