The House of Commons Library has published a briefing
paper bringing together the main changes in Housing Benefit
announced since 2010.
Read Housing Benefit measures announced since
After coming into power in 2010, as part of its deficit
reduction programme the Coalition Government announced a package of
welfare reforms aimed at reducing public expenditure. Housing
Benefit was targeted as a key area for reform due to the increasing
expenditure in this area (forecast to be £23.5 billion in 2016-17 -
around 11% of total welfare expenditure).
This latest briefing paper details changes to Housing Benefit
announced since 2010, including the under-occupation penalty
("bedroom tax"), limiting Housing Benefit paid to private tenants
via changes to Local Housing Allowances and reducing social sector
rents by 1% a year for four years from 2016-17.
Taken together, in 2016/17 the changes are expected to make net
savings to the Exchequer of around £2.7 billion, equivalent to
around 10% of what total Housing Benefit expenditure might
otherwise have been.
The June 2010 Budget announced several
measures aimed at reducing Housing Benefit expenditure. The package
of reforms was aimed at saving £1,765m by 2014/15 (7% of total
expenditure) and included:
- Basing Local Housing Allowance (LHA) rates on the 30th
percentile of market rents rather than the median figure.
- National caps for LHA rates from April 2011 of between £250pw
for a 1 bedroom property to £400pw for 4 or more bedrooms. These
caps have subsequently been uprated and the five room LHA rate was
- Caps on LHA uprating - limiting up-rates on the LHA rates by
the Consumer Price Index (CPI) from April 2013. Measures were
included in theWelfare Reform Act 2012to allow for this.
- Keeping the difference - implementing (in April 2011) the
previous Labour Government's plan to remove a provision that had
allowed LHA claimants to keep up to £15 of the difference between
the LHA rate and their actual rent level.
- Non-dependent deductions - increasing non-dependent deductions
to the level at which they would have been had they not been frozen
- Deductions for under-occupation in social rented housing (the
so-called Bedroom Tax) under which Housing Benefit for social
housing tenants of working-age occupying a larger property than
their family size warrants would face deductions from 1 April
- Amendments to the size criteria applied to private rented
housing to allow an additional bedroom for disabled claimants with
a non-resident carer from April 2011. (This was not a savings
As part of the October 2010 Spending Review
two further Housing Benefit measures were announced. These measures
were aimed at ensuring "Housing Benefit rules reflect the housing
expectations of people of a similar age not on benefits" and
"ensuring that no family can receive more in welfare than median
after tax earnings for working households."
- Shared Accommodation Rate (SAR) - extended age range The
October 2010 Spending Review announced that the age at which the
SAR applies would be increased from 25 to 35 from January 2012 for
new claimants and to existing claimants on their first review after
- Capping household benefits at £500 per week for a family (£350
for single person) from 2013. In the event, the measure was phased
in and has applied nationwide since September 2013.
During the July 2015 Budget, the Chancellor
announced additional measures to reduce Housing Benefit
expenditure, not all of which have been implemented at this point.
These measures formed part of the Chancellor's programme to reduce
welfare spending by £12 billion by 2019-20.
- Freezing working-age benefit rates - The government announced
that most working-age benefits would be frozen for four years from
2016, including applicable amounts for Housing Benefit and Local
Housing Allowance rates, with some separate provision for high rent
areas. Measures to allow for the suspension of annual uprating were
included in theWelfare Reform and Work Act 2016. Regulations
(SI 2015/1753) provides that LHA rates will remain at their April
2015 levels (or be set at the 30th percentile point for local
market rents, if this is lower).
- Limiting support to two children - The Chancellor announced
that support provided to families through tax credits would be
limited to 2 children. Statutory Instrument 2015/1857
abolished the family premium for all new Housing Benefit claims
after 30 April 2016 and for those who cease to have responsibility
for any children or young people after 30 April 2016.
- Limiting backdating of HB claims - The Chancellor announced
that, from April 2016, Housing Benefit claims would be backdated
for a maximum of 4 weeks. This represents a reduction on
the previous backdating period of 6 months.
- Severe disability premium (SDP) Regulations -
- (SI 2015/1754) have amended the Housing Benefit Regulations so
that, if a Universal Credit carer element is awarded to a Universal
Credit claimant who is caring for an HB claimant, that person may
not receive an SDP.
- Restricting HB claims for young people - The Chancellor
announced that new restrictions would be placed on claimants aged
18 to 21. Measures to give effect to this have not yet been
- Lowering the household benefit cap - The Chancellor announced
an intention to reduce the cap and vary the threshold between
Greater London and elsewhere. Measures to achieve this were
included in the Welfare Reform and Work Act 2016. It is expected
that this change will be introduced over 2016/17.
- Reducing social housing rent levels - Rents in social housing
would be reduced by 1% a year for four years resulting in a 12%
reduction in average rents by 2020-21. Although this is not a
Housing Benefit measure, the aim is to reduce Housing Benefit
expenditure by securing a fall in social sector rent levels as 54%
of social housing tenants had their rent fully covered by HB over
In the 2015 Spending Review and Autumn
Statement the government announced that they would take further
steps to ensure fairness between those receiving Housing Benefit
and those paying for the system.
- Capping HB for social housing tenants at Local Housing
Allowance rates announcement of the intention to apply LHA
rates to claimants living in the social rented sector. In 2014/15
in most areas of the country average rents for council properties
are lower than the LHA rates, however in 39% of local authority
areas the average affordable rent for housing association
properties was higher than at least one of the LHA rates.
Legislation to implement this measure has not been introduced at
- Limiting HB payments for persons outside of Great Britain to 4
weeks for claimants who spend time outside of Great Britain.
This was implemented on 28 July 2016.
Discretionary housing payments: One option for
HB claimants who experience a shortfall between the rent due and
their Housing Benefit entitlement is to apply to their local
authority for a Discretionary Housing Payment (DHP). Government
funding for DHPs has increased - it was £60m in 2012/13 and is
£150m in 2016/17.
To qualify for a DHP the only requirement is that there must be
a shortfall between HB entitlement and the rent. Local authorities
are not under any duty to make a DHP and they are generally not
paid in perpetuity. DHP funding is one of the main ways in which
the Coalition and current Government have sought to mitigate
against the impact of reductions in HB entitlement since 2010.