industry news
Cut in benefit cap could see numbers of destitute people grow further
C
ontradictory news on the impact of the benefit cap on thousands of tenants has emerged at the same time as it is
revealed over a million people are destitute. The benefit cap currently limits the maximum
amount of benefits a household can claim to £26,000 a year. This is due to be cut to £23,000 in London and £20,000 in the rest of the country. But according to the Department for Work
and Pensions the number of households affected by the cap fell to just over 20,000 earlier this year, as more claimants found work. They welcomed the fall as a sign the policy was working by encouraging people to take paid work.
Destitution
At the same time, researchers from the Joseph Rowntree Foundation (JRF) found there were 668,000 destitute households in the UK, containing 1,252,000 people, including 312,000 children. The study said the figure was probably an underestimate and that people in this situation cannot afford to eat properly, keep clean or stay warm and dry. The JRF study found that 184,500 households experienced a level of poverty that left them
reliant on charities for essentials such as food, clothes, shelter and toiletries. More than three-quarters of destitute people
reported going without meals, while more than half were unable to heat their home. Destitution affected their mental health, left them socially isolated and prone to acute feelings of shame and humiliation. Destitution was defined by researchers as
reliance on a weekly income so low (£70 for a single adult, £140 for a couple with children after housing costs) that basic essentials were unaffordable. The most common causes of destitution were
found to be: • Ill health and disability; • High costs of housing and other essential bills;
• Unemployment; and • A financial shock like a benefit sanction or a payment delay.
Roll out
Although paid work was seen by respondents as a way out of destitution, this was seen by some as hard to come by, while high housing costs meant that, in some cases, having a job was not
enough to stave off severe hardship. One in 20 destitute households had someone in work. The Government continues with its
programme to roll out Universal Credit across the country, but problems continue to beset the system which has combined six benefits into a single monthly payment. So far social landlords in participating areas say that between 80-90 per cent of tenants on Universal Credit are in rent arrears, with the average debt being just over £400. One major problem reported by landlords is
no longer receiving news of changes in claimants’ circumstances, with close working relationships with housing benefit teams becoming a thing of the past. They are also having to use more of their own resources in supporting and helping claimants. Another serious issue is that the monthly
payment system method of Universal Credit is making it difficult for tenants to budget effectively. Support from DWP staff is often inconsistent and tenants often do not know they are now responsible for paying rent to their landlord. Unless the DWP can improve its performance the new system could see more evictions for non-payment of rent or landlords income falling as they take the strain.
8 | HMM May 2016 |
www.housingmmonline.co.uk
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