Changes Needed to Make Welfare Reforms Fairer, Says SFHA

The UK Government's Welfare Reform Bill, as it stands, is not fair to tenants or social landlords

, the Scottish Federation of Housing Associations (SFHA) said as the UK Government's controversial Welfare Reform Bill reaches its Report Stage in the House of Commons today (Monday 13th June 2011).

The SFHA is recommending a number of changes before the Bill becomes law.

The Federation has commissioned independent research on the impacts of the proposed welfare reforms. Interim findings, released last month, showed that up to one in five tenants in Scotland will see their incomes fall due to the Coalition Government's Housing Benefit cuts. The full report is due to be launched shortly.

SFHA Policy and Strategy Director Maureen Watson said:

"The fact that one in five tenants in Scotland are set to lose income as a result of these changes, as our research has revealed, is shocking.

"We oppose the penalty the Bill places on tenants ‘under-occupying'. It's particularly unfair that families will be penalised financially for living in houses deemed to be too large, when there is often nowhere else for them to go due to a chronic shortage of affordable housing.

"The new all-in-one benefit, Universal Credit, will be paid directly to tenants, including the housing costs element. Currently, tenants can choose to have Housing Benefit paid directly to their landlord, which a large number of them prefer to do. A landlord can also ask for it to be paid direct if the tenant is in a certain amount of rent arrears. There are no such arrangements in place for Universal Credit as the Bill stands. This will make it harder for tenants who are already having financial difficulties to manage their budgets and therefore to pay their rent.

"We want tenants to have the right to choose who the housing costs part of Universal Credit is paid to. There is a huge risk that the reduction in tenants' incomes, combined with housing costs being paid direct to those already in financial hardship, will see arrears going up in the sector. This poses a major threat to the financial stability of housing associations and co-operatives. Rental income is the sector's only source of income to pay for the management and maintenance of existing homes.

"In addition we are concerned about new plans to deduct overpayment of benefits from earnings, and the impact of the overall household benefits cap on tenants' ability to pay their housing costs."

Ms Watson continued:

"These reforms have the potential to impact disproportionately on some of the most vulnerable people in our society and the UK Government should think again. SFHA calls on Scotland's MPs to stand up for tenants, and for housing associations and co-operatives. We urge our elected representatives in Holyrood to send a strong message to Westminster as to the damage these changes will cause. We have serious concerns that the views of the devolved administrations are not being listened to.

"The Coalition Government has already dropped its earlier proposal to cut Housing Benefit by 10% for those on Job Seekers' Allowance for more than a year. We urge them to look again at the other proposals to cut benefits which will unfairly penalise the poorest in our communities."