Tag Archives: local housing allowance

What we should now be calling for

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On Friday afternoon Rishi Sunak announced that the government would pay up to 80% of wages up to £2500 a month. That is £30,000 a year. He hopes that HMRC will be able to pay all the grants applied for by the end of April. Coronavirus Business Interruption Loans will be available from Monday. Hopefully this will mean that every employer will be able to get the money they need to pay their workers up to £576.92 a week.

He has restored the value of the Local Housing Allowance to the 30th percentile of local rents: the reduced rate from 2011. (It had been the 50th percentile before this.)

However, he is not doing enough for those having to claim benefits. He is only increasing some benefits by £1000 a year (£19.23 a week). A single person’s Universal Credit is increasing from £73.34 a week to £92.57 a week and from 6th April it will be £93.82 a week. Statutory Sick Pay is currently £94.25 a week rising to £95.85 from 6th April.

While the help for those who are still being employed is adequate, it is inadequate for those who are going to have to rely on benefits. The party must call for more to be done for these people.

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Ending relative poverty in the UK is easy

Recently I have seen a couple of comments on LDV which state that ending relative poverty in the UK would be a difficult and complex thing to achieve. They are mistaken.

The reason someone is living in relative poverty is because they don’t have enough money. The answer, therefore, is to ensure that benefit levels give them enough to pay all of their housing costs and have enough left over to be on the poverty line and not below it. As Philip Alston, the UN’s Special Rapporteur on extreme poverty and human rights in his report points out “employment alone is insufficient” to lift someone out of poverty.

Already we have a system which reduces benefits by 63p for every pound earned, but 4 million workers live in poverty. This is because the gain from working is not enough to lift the person out of poverty. If they were already out of poverty when living only on benefits then no one working could be living in poverty.

We need to ensure that those living on benefits have enough money to pay all of their housing costs. Scrapping the benefit cap helps, as would increasing Local Housing Allowance in line with local rents (both party policy). However, they don’t go far enough. Local Housing Allowance was introduced by the Labour government in 2008. It sets maximums for housing benefit depending on local rents, and sets out what type of accommodation different types of families can have.

It is not liberal for the state to tell people how many rooms they can have to live in. It is not liberal for the state to force tenants into debt arrears. It is not liberal for the state to force someone to move house when they experience difficult times such as when they become unemployed.

It is liberal for the state to pay 100% of the housing costs of those on benefit. Therefore we should have as our long-term aim scrapping the LHA and in the meantime increase its value above the bottom 30% of local rents. (I expect this is the main reason that 1.9 million pensioners are living in poverty). The least we should do is reduce the single person age down to 25 from 35, so a single person aged between 25 and 34 should no longer be forced to live in shared accommodation.

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Government U-turn leaves thrifty families better off

The Government has today made a U-turn over plans that could have left low-income families £780 a year worse off, after proposed changes to the Local Housing Allowance (LHA) were scrapped in today’s Pre-Budget Report. 

Quietly sneaked into the last budget was a proposal to claw back £780 per year from some of the country’s poorest and most vulnerable families. At present, households receiving Local Housing Allowance (LHA) are able to keep up to £15 a week if they choose a home with a rent below the maximum payment for their area.  Alistair Darling’s plan to prevent this excess payment being kept by the claimant would have left some of those already struggling to get by on the lowest incomes losing up to 20% of their income. The Government’s own figures calculated that around 300,000 of the poorest households would have been affected.

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