SFHA Launches Report on Impact of Welfare Reforms

There is still time for the UK Government to change its welfare reform proposals to avoid unfairly penalising tenants and landlords, the SFHA said as it launched the findings of research into the potential impacts of the Welfare Reform Bill on Thursday 23rd June.

Independent research commissioned by the SFHA reveals that up to one in five tenants in Scotland will see their incomes fall due to the Coalition Government's Housing Benefit cuts. The research analyses the impacts on different groups of people, and proposes a range of ways of mitigating the most severe impacts which could see some tenants losing hundreds of pounds a year.

The Scottish Government's Housing and Transport Minister Keith Brown, has backed the SFHA's findings.

SFHA Policy & Strategy Director Maureen Watson said:

"There is still time for the UK Government to adapt its welfare reform proposals to lessen the impact on the vulnerable, while still saving money.

"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.

"One of the most unfair proposals in the Bill is financial penalties for those deemed to be living in a property that's too big for their needs. It also reveals that while nearly half of working-age tenants only need a one-bedroom property, just a quarter actually have one. This reflects a serious shortage in one-bedroom accommodation.

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

"We want to see the option for tenants to choose to have housing costs paid direct to landlords continue. 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.

"In addition we are concerned about new plans to deduct overpayment of benefits from earnings, and the implications of the overall household benefits cap for 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 the House of Commons and the House of Lords to look again at how the fine print of these proposals could be amended to avoid serious financial penalties for tenants and potential difficulties for social landlords.

"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."

Housing and Transport Minister Keith Brown said:

"These findings chime with the Scottish Government's own assessment, which was published in December, of Westminster's ill-considered cuts in Housing Benefit.

"60,000 tenants in Scotland face losing on average £40 per month, and at least 95,000 suffering more misery as further reductions take effect in April 2013.

"We are as one on this issue with SFHA and other key organisations on our Housing Benefit Advisory Group.

"Together, we will push the UK Government to think again about these damaging cuts, which once again emphasise why giving greater control of Housing Benefit to Scotland would help those facing greater financial worries and concerns about having to move home or losing it altogether."

The main aim of the research was to assess the possible impact of different elements of the Welfare Reform Bill including the proposed changes to Housing Benefit and broader changes to different groups of benefits.

The research also considered possible measures to offer savings while reducing the detrimental impact of the reforms. These include considering the impact of extra space on children's educational outcomes; making allowances for families with visiting children; and a flexibility for more vulnerable benefit recipients. SFHA recommends that the option to have benefits paid directly to landlords is kept. SFHA also recommends the DWP carry out a full impact assessment on the changes.

The outputs of the research will also include a web-based calculator for landlords to use with tenants to assess the impact of benefit reform on them.

Read the full report here: