Chancellor George Osborne’s other announcement to introduce a cap on benefits at £26,000 is even more unfair than the child benefit changes.
Our guest writer is Pete Challis, chair of the ALG Housing Committee (1990-99)
The media have made much of the unfairness in the proposals to remove eligibility for child benefit to any family where there is a higher rate taxpayer. The unfairness that one person earning more than £43,875 will lose their child benefit while two earners whose combined incomes is £80,000 will keep child benefit was immediately seized on.
But chancellor George Osborne’s other announcement to introduce a cap on benefits at £26,000 is even more unfair. It takes no account of housing costs, family size or council tax and penalises couples.
To illustrate the postcode lottery that is being created and the impact, compare the following. (Note that the calculations do not include child tax credits, which is a further factor and penalty.)
Take a couple (Couple A) on job seekers allowance with 4 children living in a 4 bedroom home in the private rented sector in Camden. They pay £400 a week in rent (£20,800 a year) – the new ceiling being imposed from next year, their council tax is £1,332 (Band D). Their job seeker’s allowance (£5,343) immediately takes them over the cap.
Their job seeker’s allowance is effectively cut from £102.75 a week to £74.38 a week and they effectively lose all child benefit.
Now take the same couple (Couple B) on jobseekers allowance with 4 children but this time living in a 3 bedroom home in the private rented sector in Camden. They pay £340 a week in rent (17,680 a year), their council tax is still £1,332 (Band D). They keep job seeker’s allowance (£5,343) and child benefit for Child 1 but effectively lose some child benefit for Child 2 and all child benefit for children 3 and 4.
Compare them with a single parent on jobseeker’s allowance with 4 children who also lives in a 3 bedroom home in the private rented sector in Camden. The rent is £340 a week (£17,680 a year), their council tax is now £999 (single person discount Band D). They keep job seeker’s allowance (£3,432) and they keep child benefit for all their children.
In order to keep all their child benefits the couple (Couple D) must move into a 2 bedroom home with a rent at £290/week, the children share the two bedrooms and they sleep in the living room but they keep their Jobseekers allowance and all their child benefit.
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Camden |
Camden |
Camden |
Camden |
Birmingham |
| Couple A | Couple B | Sngl prnt C | Couple D | Couple E | |
| HB | £20,800 | £17,680 | £17,680 | £15,080 | £11,369 |
| CTB | £1,332 | £1,332 | £999 | £1,332 | £1,261 |
| JSA | £5,343 | £5,343 | £3,432 | £5,343 | £5,343 |
| CB 1 | £1,056 | £1,056 | £1,056 | £1,056 | £1,056 |
| CB 2 | £697 | £697 | £697 | £697 | £697 |
| CB 3 | £697 | £697 | £697 | £697 | £697 |
| CB 4 | £697 | £697 | £697 | £697 | £697 |
Alternatively, if the couple (Couple E) could move into a 5 bedroom property in Birmingham (£218.63 a week) they would be unaffected by the cap.
48 Responses to “Housing benefit changes even more unfair than child benefit cuts”
Chris
Over the past few years Clegg has hawked his conscious around over child poverty and continually mislead the public over Labour’s achievements in raising children out of poverty. Yet he is now presiding over benefit cuts that will undoubtedly increase child poverty especially among some of the most vulnerable children in society, punishing them for the sins of their parents.
@Duncan Scott
You’re very misinformed about HB!!!
“Why should people unemployed in London who love living in Camden be able to afford to do so solely at the taxpayer’s expense?”
HB is paid to those on a low income as well as jobseekers. Recipients generally work or look for work in low wage sectors, moving further out of London would make it much harder for them to commute to work or look for work. If your a cleaner you have to get into the office at 5 am, very little public transport at that time, how does it make work pay if spend all your money commuting?
“Taking the argument to its logical conclusion, it basically means that people who fluke born in nice areas get state subsidy to keep them in the nice area at the expense of everyone else.”
LOL, don’t believe the Daily Fail pal! Parts of Camden are fucking horrible yet the rents are still high. HB isn’t renting 5 floor town houses in South Kensington for illegal immigrants.
“Also, a separate point: overly generous housing benefit has an inflationary pressure on private-sector rents. If housing benefit is uncapped, there is a bottomless pit of money that landlords can extract from the taxpayer via unemployed tenants.”
That almost makes sense if it weren’t for the fact HB is *already* capped at the median rent in a particular area! Osborne’s reforms cap HB at 30% level of local rents.
Plus, I doubt you’ve ever claimed HB because you seem to think landlords are falling over themselves to take claimants, they aren’t. Its actually very hard to get a new place paid for by HB, these cuts will make it even harder. Ghettoizing jobseekers and low paid workers into areas of deprivation and squalor that would make Beveridge turn in his grave – real fucking progressive.
The cuts have been compared by a *tory* minister to the modern day equivalent of the highland clearances, that is the reality that your defeating.
Chris
oops…
The cuts have been compared by a *tory* minister to the modern day equivalent of the highland clearances, that is the reality that your defending.
Alan Jon
The thing is, my girlfriend and I would like to live in Camden, but on our wages we can’t aford it, so we have to live out in a grotty zone 3 suburb.
I’m not saying that’s a fault of the claimants, it’s a fault of your example.
I’d love to see some proper data analysis done here on how many people this is going to affect. I bet the numbers of people effected outside of London are tiny.
What we really need to be talking about is why rents, particularly in London, are so high? Donning my socialist cap for a moment, why are people allowed to take out loans on second and third homes then rent them out and sit back and earn money from doing nothing? We need to go back to a time (if there ever was one) when a house was a home and not an investment.
John Lees
Chris – why should I pay to put someone into a house I can not afford to live in? If you need 4 bedrooms and can not afford it don’t have children. If it was impossible to travel into work in teh city centre from cheaper housing ouside then the wages would go up until it was possible.
Chris
@Alan Jon
“I’d love to see some proper data analysis done here on how many people this is going to affect. I bet the numbers of people effected outside of London are tiny.”
As I said previously the £400 a week cap is misleading, the cap on *all* HB claims is going to be cut by 20%. As HB is dependant on the area you live in it will affect people all over the country.