Welfare changes already having an impact

IT would be easy to be reassured by the UK Government’s assurances that no-one will be affected by housing benefit changes until April 2019, when they come into effect.

When the Department for Work and Pensions (DWP) told The Herald in the new year that existing tenants would be unaffected, that was wrong however. Many will, although understanding who and how is complicated.

The error was blamed on staff standing in over the holiday period giving a misleading answer. But the suggestion that the changes are not already having an impact is also misleading.

One of the complexities of all this is that the changes are being phased in, with benefit claimants being moved on to Universal Credit job centre by job centre. But there is already evidence of UC causing problems.

In Aberdeen, where full UC is not yet being rolled out, but where new claimants receive the benefit, Langstane Housing Association has 95 tenants who are on UC, and reports that 75 of them are in arrears, to the tune of £65,000.

This is before the local housing allowance cap comes in, which will restrict the housing element paid to social housing tenants. For people under 35, living alone, this is only a rate equivalent to the cost of shared digs, leaving many having to find more – usually from their remaining benefits – to pay for their tenancies.

The impact for housing associations is severe. Better grants for new housing developments have enabled many to progress stalled schemes. But likely arrears problems will make vital banking support harder to obtain.

Bruce Forbes, of Angus Housing Association says his single tenants under 35 will be left facing a £22 a week deficit. “That’s a high percentage of the overall income that person receives, and these are often people who are already struggling to live,” he said.

Anyone who changes their tenancy between now and April 2019 will be affected when the LHA cap comes in.

Social landlords not only need to plan now for the likely effect on their own finances, they will need to warn new tenants to begin working out how to deal with the fact that in a little over two years time they may no longer be able to afford to live in their home.