05/2016 Welfare Reform and Work Bill Update 18/03/2016

Key Points

• The Welfare Reform and Work Act received Royal Assent on 18 March.
• Sections 20 to 27 of the Act require councils and housing associations to reduce the rent paid by each of their tenants by 1% a year in 2016/17 and in each of the following three years.
• Section 21 lists exceptions to this requirement and permits the Secretary of State to make regulations specifying further exceptions.
• Regulations will shortly be laid exempting sheltered and supported accommodation from the rent reductions for a period of 1 year while a review of the financing of supported housing is carried out. 
• The regulations are also expected to clarify the position on service charges, which it is the Government's intention to exclude from the reductions except in some cases where an affordable rent is charged.
• Schedule 2 of the Act covers the situation where a new tenancy begins during the period of the rent reduction. Councils are permitted to let the property at a rent calculated by reducing the 2015/16 target rent by 1% for each intervening year even in cases where this would be more than the rent paid by the previous tenant.

View PDF version.

Progress of the Bill

The Welfare Reform and Work Bill completed its passage through the House of Lords and received its Third Reading on 9 February. The Lords made a number of amendments. The Bill then went back and forth ("ping-pong") between the two Houses of Parliament until agreement was reached on 7 March. The Bill received Royal Assent on 18 March and is now enacted.