Universal Credit housing benefit ‘often not enough to cover average room rent’
Housing benefit payments for young Universal Credit recipients are not enough to cover the average rent of a room in a shared house in almost all of England’s local authorities, new analysis shows.
Leading charities have called on the Government to rethink the “illogical and confusing” system, which they say leaves vulnerable young people, including care leavers, trapped in homeless hostels.
Universal Credit uses the Local Housing Allowance to calculate how much housing benefit claimants are entitled to, with rates based on the private rental market in the local area and set at the same level for all.
Under the system, most single people aged under 35 are only entitled to a set amount to help towards the cost of a room in a shared house – known as the Shared Accommodation Rate, the lowest LHA band.
But analysis of the latest rental market figures from the Office for National Statistics by youth homelessness charity Centrepoint shows there is just one local authority area in England (Rother) where the rate actually covers the average cost of a shared room.
Young people face a shortfall in the remaining 232 council areas – in 166 authorities, it is £100 a month or more.
That is after a rise of 1.7% scheduled for April is taken into account.
Recipients in Thurrock, Essex, are left the worst off, where the £298 shared accommodation rate covers just 44% of the £673 a month needed to rent the average room.
Centrepoint said prices may have increased since September, when the ONS figures for the previous 12 months were published, leaving young people in an even worse position.
Chief executive Seyi Obakin (pictured) said it “defies logic” that under-25s are not entitled to greater help with their housing costs, regardless of their vulnerability.
“The current system means that many young people are ready to move on from care or a homelessness hostel but can’t,” he added.
“The negative impact this has on young people, and the bed-blocking it creates, is simply unsustainable.”
Some young people, such as care leavers aged 18 to 21 and over-25s leaving homeless hostels, are able to claim a higher rate for a one-bedroom property.
But this is also not enough to rent the average one-bed in all but two local authorities.
Sam Royston, director of policy and research at The Children’s Society, said the “illogical and confusing” system leaves young care leavers facing a financial cliff edge on their 22nd birthday.
He called for the Government to exempt care leavers from the shared accommodation rate until they are 25, to give them a chance to create a stable home of their own.
The charities estimate it would cost £5.8 million to make the change, and £3.7 million to allow hostel leavers to claim the higher one-bed rate before they turn 25.
Green Party MP Caroline Lucas called on ministers to “find it in their hearts and budgets to end youth homelessness”.
She said: “These young people cannot rely on the bank of mum and dad, they can’t move back into the family home to save up.
“This support would save money overall, as stable, supported young people can fulfil their potential rather than suffer in chaos and danger.”
A Department for Work and Pensions spokesman said about 900,000 people would see their benefit rise by an average of £10 in April.
He added: “This government continues to spend around £23 billion a year helping people with their housing costs and since 2011 have provided authorities with more than £1 billion in Discretionary Housing Payments to protect the most vulnerable.”
“We continue to spend £95 billion a year on working-age benefits.”
Top 10 areas with the biggest shortfall (%):
- Thurrock, Essex – £298 received, £673 average room, 56% shortfall.
- Halton, Liverpool – £229 received, £433 average room, 47% shortfall.
- Redbridge, London – £352 received, £664 average room, 47% shortfall.
- South Norfolk – £280 received, £524 average room, 47% shortfall.
- New Forest, Hampshire – £298 received, £556 average room, 46% shortfall.
- Hart, Hampshire – £301 received, £557 average room, 46% shortfall.
- Camden, London – £472 received, £829 average room, 43% shortfall.
- South Ribble, Lancashire – £244 received, £428 average room, 43% shortfall.
- Oldham, Manchester – £247 received, £422 average room, 41% shortfall.
- Greenwich, London – £384 received, £655 average room, 41% shortfall.
Copyright (c) PA Media Ltd. 2020, All Rights Reserved. Picture (c) Ben Stansall / PA Wire.