Housing benefit changes even more unfair than child benefit cuts

Left Foot Forward

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.


 
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.

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48 Responses to “Housing benefit changes even more unfair than child benefit cuts”

  1. jeff marks

    why do way people who don’t work anything? can’t they just starve?

  2. Sam Korn

    “If someone is on ‘job seekers allowance’ for a whole year then they need to recognise that they aren’t going to get a job and need to rearrange their lives to be the minimum burden on those of us who do work.”

    So you want them to move away from where they live, from where they have friends and connections through which they might find a job, to somewhere they don’t know and where they aren’t known, further lessening their chances of getting a job? You want them to spend their time looking for somewhere else to live and organising a move of house (no small task!) rather than looking for a job? You think that someone who hasn’t had a job for a year must be unemployable and can only be considered a “burden” on the rest of society?

  3. jeff marks

    ps well done lff for separating the useless tweets from the comments. would prefer them not to be there at all.

  4. jeff marks

    move them to india and they’ll realise how lucky they are.

    supporting some shirker here for a year, even limited to 26k would provide clean water for hundreds of people in India, would save thousands from waterborne diseases in Africa.

    I can see NO justification for paying someone in this country not to work.

  5. More reflections on child benefit cuts | ToUChstone blog: A public policy blog from the TUC

    […] far more significant cuts in their benefits. Housing benefit cuts will have the same effect on poor Londoners as the Highland clearances once had on Scotland. New Scope research shows that the cuts could have […]

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