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Housing benefit can help eligible claimants cover their rent if they’re unemployed, on a low income or claiming other benefits. The amount received could cover some or all of a person’s rent but recently, Rishi Suank and the wider government laid out plans for how certain state benefits will be altered for the year ahead, with housing benefit set to be drastically affected.
In late November, the Chancellor revealed plans for how the Government will be supporting the economy this year and alongside the announcement, the Office for Budget Responsibility (OBR) published an Economic and Fiscal Outlook report.
Within this report, it was revealed local housing allowance rules will be changing, which will have an impact on state benefits like housing benefit.
The report detailed: “The increase in local housing allowance (LHA) rates to equal the 30th percentile of an area’s market rents raises UC or housing benefit awards for eligible private renters.
“At the time of the FSR the government had not specified LHA rates beyond this year, so we assumed they rose in line with CPI inflation consistent with the default policy assumptions underpinning our March forecast.
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“It has now decided that rates will be frozen in cash terms from 2021-22 onwards.
“This means the £1 billion cost of the measure in 2020-21 declines to £0.3 billion by 2025-26 (and that LHA rates will fall back below the 30th percentile of local rents over time).”
As the announcement was made, the National Residential Landlords Association (NRLA) condemned the change, detailing landlords and tenants relying on benefits would be harmed through no fault of their own.
This issue arose again yesterday following the reintroduction of a national lockdown and the emergence of huge rent arrears problems.
In a joint statement, the National Residential Landlords Association, The Big Issue and Ride Out Recession Alliance, Shelter, ARLA Propertymark, the Nationwide Building Society, and StepChange the Debt Charity detailed the following: “Many thousands of private renters and landlords across the country now face rent arrears due to the impact of the pandemic.
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“Ministers have failed to address the core problem of debts which have built despite the financial package put in place so far.
“Indeed, the Chancellor confirmed that housing benefit will not be linked to the cost of renting for future years.
“Renters, landlords and letting agents cannot be expected simply to muddle through indefinitely where they face these financial difficulties.
“The Government needs to develop an urgent package to help renters in paying off arrears built since March last year.
“Without further action, debts will continue to mount, making it far more difficult to sustain tenancies and keep renters in their homes after the pandemic.”
It should be noted that Rishi Sunak has consistently detailed he will do “whatever it takes” to keep the economy going and support families through the pandemic and thus far, the Chancellor has extended and adapted a number of support measures.
This commitment was highlighted in his November spending review, with Rishi laying out the following numbers: “We’re prioritising jobs, businesses and public services.
“The furlough scheme, support for the self-employed, loans, grants, tax cuts and deferrals as well as extra funding for schools, councils, the NHS, charities, culture and sport.
“Today’s figures confirm that taken together:
- “This year, we are providing £280 billion to get our country through coronavirus.
- “Next year, to fund our programmes on testing, PPE, vaccines – we are allocating an initial £18 billion.
- “To protect the public services most affected by coronavirus, we are also providing:
- “£3 billion to support NHS recovery, allowing them to carry out up to a million checks, scans and operations.
- “Over £2 billion to keep our transport arteries open, subsidising rail networks.
- “Over £3 billion to local councils.
- “And an extra £250 million to help end rough sleeping.
“And while much of our coronavirus response is UK-wide, the government is also providing £2.6 billion to support the devolved administrations in Scotland, Wales and Northern Ireland.
“Taken together, next year, public services funding to tackle coronavirus will total £55 billion.”
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