Impact of welfare reform William Jones Senior Housing Law Caseworker Shelter Cymru

The Welfare Reform Act… ‘….will restore fairness and simplicity to a complex, outdated and wildly expensive benefits system.’ DWP

Main changes so far… Local Housing Allowance cut to 30 th percentile Under-occupancy charge for social housing tenants – the bedroom tax Extension of the Shared Accommodation Rate to under 35s Ending of council tax benefit Legal Aid cut for welfare benefits and housing advice Household benefit cap

Impacts LHA cut Reduces access to the bottom third of the PRS and increases demand for lower price properties Landlords less likely to rent to HB recipients – 67 per cent of landlords have said they would be unwilling or unable to reduce their rent in line with the cut (NLA research)

Impacts Bedroom Tax Greater risk of arrears and homelessness – one HA already reporting 146% increase in arrears and Shelter Cymru advisers seeing lots of related cases Tenants cutting back on heating and food to meet additional average costs of £9.80 to £17.50 per week Greater costs to public – smaller properties in PRS more expensive than larger social rented homes

Impacts Extension of SAR from under 25s to under 35s Access to PRS accommodation greatly reduced for this age group Impact on family relationships where separated parents share child care

Impacts Ending of council tax benefit Breathing space in Wales due to Welsh Government covering costs of CTB cut for one year But from next year, everyone will have to pay something

Impacts Legal Aid cut for welfare and housing advice No Legal Aid funding to help people challenge benefit decisions regarding DLA, ESA etc Legal Aid provided only for housing advice at crisis point, not prevention, which will lead to greater homelessness and increased costs overall – it has been estimated that every £1 invested in early advice saves £9 in associated costs later

Impacts Household benefit cap Will hit larger families hardest HB/other housing costs will be the mechanism for limiting the total benefit income Increased homelessness, overcrowding, segregation as claimants move to cheaper areas

Other factors to consider Not just bedroom tax and capping of household benefits But also DLA, PIP, ESA etc Cumulative effect of cuts Benefits have been frozen, but rents haven’t Neither have energy or food costs Cost of living Including rent payments direct to tenants, not landlords Paid in arrears to just one person in the household – impact on families where there are problems with domestic abuse or addiction Introduction of Universal Credit

Worried?

Responding to the changes Are we seeing a tougher approach to arrears from housing associations and councils? April – June 2013: 11% increase in possession orders 16% increase in court orders 78% of claims were from the social housing sector

Also… …we are starting to see some Housing Associations asking for one week’s rent in advance Where are people already in financial difficulties going to find this money?

Homelessness on the rise again? Number of homelessness decisions taken by LAs indicates levels of households approaching them for help From a high of more than 22,500 in , levels dropped steadily until 2010, when the welfare changes were introduced Since then, levels have started rising again

What next? Homelessness is increasing and it seems that HB and other welfare cuts are a contributing factor Large parts of some cities are becoming unaffordable to people on benefits and/or low incomes Work is not paying – more than 90% of new HB claims between were from working households

What next? The introduction of the bedroom tax has created huge insecurity for tenants and threatens to undermine communities Meanwhile, smaller properties in the PRS will actually be more expensive, increasing overall HB costs Legal Aid cuts mean people can’t get prevention advice at early stages of problems

Finally… The welfare reforms have had a disproportionate impact on the poorest and most vulnerable people in society, but we are all poorer for it It’s a bleak picture, but it has shown how many of us are committed to working together to mitigate the worst effects Thank you for your time today