One in Five Tenants Set to Lose Out in Housing Benefit Changes

Up to one in five tenants in Scotland will see their incomes fall due to the Coalition Government's Housing Benefit cuts.

This is just one of the worrying interim findings of independent research commissioned by the Scottish Federation of Housing Associations (SFHA) released on Wednesday 4th May into the impacts of Housing Benefit reform on housing association tenants in Scotland (1).

The findings were launched at the SFHA's Welfare Reform conference in Glasgow's Grand Central Hotel.

SFHA is calling on the MSPs elected to the new Scottish Parliament this week to lobby Westminster on behalf of tenants, housings associations and housing co-operatives, whose financial stability will be put at risk by the Coalition Government's welfare reforms.

The SFHA's campaign, Housing Benefits (2), aims to highlight the damaging impact the reforms, some of which were introduced in April this year, will have on tenants in the affordable housing sector.

There are 250,000 families in housing association and co-operative homes in Scotland and another 250,000 applicants on housing association waiting lists.

In Scotland, 60% of social rented tenants rely on Housing Benefit to pay all or part of their rent (3).

Key findings from the SFHA's report are:

• From April 2011, families in social housing with working-age children, (working a 40-hour week on the minimum wage) are worse off by £10.25 per week.

• From April 2013, one third of working-age tenants in Scotland (around 24,000 tenants), who are judged to have more rooms than they need, will lose £11 a week. This is despite the fact there may not be a smaller house available for them to move to. This could cost housing associations £13.8m a year in lost rental income .

• Tenants will be penalised for living in a house classed as too big, but have little option. Our findings show that 62% of tenants need only one bedroom, but only 34% live in a one-bed property. This represents chronic under-supply of the right type of housing.

• Tenants living in specialist housing will be disproportionately affected by welfare cuts. One in five housing association/co-operative tenants receive disability benefits. Government spending on disability benefits is to be cut by 20% from 2013-14.

• Even before the cuts, 40% of working-age tenants on Housing Benefit say they find their finances difficult to manage. The cuts make it almost certain that more tenants will find it harder to pay their rent. This represents a big risk to the financial stability of housing associations and co-operatives.

• The new all-in-one benefit, Universal Credit, is set to be paid directly to tenants (instead of to landlords), monthly (instead of weekly), and in arrears (instead of in advance). This will make it harder for tenants to manage their budgets and therefore to pay their rent.

SFHA Policy & Strategy Director Maureen Watson said:

"The fact that one in five tenants in Scotland - and our sector houses quarter of a million families - are set to lose income as a result of these changes is shocking.

"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. This can only get worse with the cuts to housing in the Scottish Budget meaning that fewer homes will be built in the years to come.

"There is also 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. which poses a major threat to the financial stability of housing associations and
co-operatives."

"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 whoever is elected in Scotland to stand up for tenants, and for housing associations and co-operatives. We urge our elected representatives in Scotland 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."

ends

For further information, contact Press and Public Affairs Manager Claire Munro on t: 0141 567 6244 m: 07771 926778 or e: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Visit our website at www.sfha.co.uk

NOTES:

1) SFHA has commissioned social research consultant Mandy Littlewood to carry out independent research into the impacts of the Coalition Government's proposed welfare reforms on Scotland's housing associations and co-operatives,and their tenants. These are the interim findings in advance of the report's publication.

2) Find out more about the campaign at http://www.sfha.co.uk/sfha/current-campaigns/housing-benefit/menu-id-90.html

Click here to sign up to back the SFHA's Housing Benefits campaign.

3) Scottish Housing Regulator Registered Social Landlords in Scotland Summary Facts and Figures 2008/09

4) The SFHA was established in 1975 and has around 170 members providing affordable housing and wider community services in Scotland, as well as a further 200 commercial members. The SFHA is owned by its membership and exists to support the work of housing associations and co-operatives in Scotland by providing services, advice and good practice guidance.

5) The SFHA is the voice of the principal builders and managers of new affordable housing for rent in Scotland. Housing Associations own and manage around 40% of the country's affordable rented housing stock, over a quarter of a million homes across Scotland.

6) Housing associations and co-operatives are not-for-profit bodies regulated by the Scottish Housing Regulator.

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