There is currently a great deal of concern and uncertainty about the ongoing impact of housing benefit reform on older people’s housing Older private rented sector tenants are already being affected by the limits placed on Local Housing Allowance (LHA) especially in the London and the South East. Changes came into force in April meaning that LHA will only cover the bottom 30% of market rents. It is still too early to fully assess the impact of these changes, but up to 80,000 older people could be affected. If LHA does not cover the full rent, older people will have to make up the deficit or find alternative accommodation. As well as creating hardship it is possible that some may find themselves homeless, despite the availability of discretionary additional payments. The situation could become worse after 2013 because benefit rates will be set against the Consumer Price Index – which is unlikely to keep up with rent increases.
Changes to Local Housing Allowance are just one aspect of wider reforms to the housing benefit system as part of the Welfare Reform Bill to introduce a unified single benefit – Universal Credit. A particular area of concern is the proposed restriction on housing benefit for working age people who are deemed to under occupy. This could have a devastating effect on many disabled people living in adapted housing. The National Housing Federation is currently campaigning to stop these changes happening in 2013. There are some fears that this rule could, in future, easily be extended to retired older people, also forcing them to leave settled accommodation. The Bill gives the Secretary of State sweeping powers to change the regulations without referral to Parliament.
As well to the Welfare Bill there are new proposals on the funding of supported housing, which could affect older people living in sheltered schemes. The housing benefit budget for all supported housing is relatively small (1-2%) but reforms could have a massive impact on many vulnerable people. The Government are seeking a way of controlling and simplify housing benefit for sheltered schemes by introducing a fixed rate of housing benefit. Although this rate will not apply to housing associations registered with the Tenant Services Authority, it is still likely to have a knock on effect at a local level on the rate that providers receive. This is problematic because supported housing schemes are paid at a special rate, based on local conditions, in recognition of extra housing management costs. If this element is reduced it will mean that providers will still need to make up the deficit. As a result they may cut back services or expect residents to pay more.
The DWP have said their reforms will be cost neutral. In reality they could result in significant cuts to sheltered housing, further damaging traditional forms of support. When the Government introduced the Supporting People funding regime, in 2003, they wanted to separate the costs of housing from the costs of support services. This has contributed to a decline in services that had previously been integral to most sheltered schemes. Supporting People funding for sheltered schemes is discretionary funding, not a statutory requirement like housing benefit. Every week local authorities are announcing cuts to Supporting People funding that impact on sheltered schemes. If the housing management costs of sheltered housing are reined in, this will be a double whammy representing an additional destabilisation of sheltered housing. This is despite research by Cap Gemini, commissioned by the Government, demonstrating that sheltered housing saves money over the longer term, if you take into account the way it reduces costs on other services. The end result of all the changes could be a further decline in sheltered housing which inevitably will impact on vulnerable older people. Yet there has still been no proper debate about the future of sheltered housing and no meaningful engagement with residents.
With all the changes going on at the moment it is vital that we fully consider the impact on vulnerable older people who have limited options and deserve guarantees of safety, security and support. Although a simplification of the benefits system is desirable we still need to take account of the complex circumstances that make older people’s housing viable and protect the most vulnerable.