From the TUC

Housing Benefit cut for unemployed people: it could be worse than we thought

09 Nov 2010, by in Society & Welfare

In his evidence to the Work and Pensions Select Committee Lord Freud revealed some disturbing news about the Government’s proposal to cut Housing Benefit for those who have spent 12 months or more on JSA.  When asked by Kate Green MP when the 12 month period will start from Lord Freud responded:

‘The way that it is constructed at the moment is from the time that they start on JSA, so it’s 12 months from the time that they start on JSA’.

This suggests that people who spend 12 months on JSA, move into work but are then made redundant again could face an immediate 10 per cent HB cut when they lose their second job. In theory, this could be done via a ‘linking rule’, which would mean that people returning to benefit within a set period of time would revert to their previous claim level.

What could this mean? Will someone who spends 12 months out of work and then loses their job again five years later be subject to an immediate Housing Benefit cut as their redundancy kicks in, as a means to ‘incentivise’ them to move into jobs? Will a worker with five seperate periods of spending two months on JSA be subject to a cut the minute their latest temporary job comes to an end? It would be understandable if a Government introducing such a sanction wanted to prevent people from moving into work for a day to avoid the reduction, but if the sanction applies to those who have been working for several months, or even years, it will be significantly worse than we could have expected.

Lord Freud’s evidence also highlighted another particularly harsh aspect of the change – most unemployed people will not have access to extra help to find work during the first 12 months of their JSA claims. While the Government has been keen to use the support provided through the Work Programme as a justification for placing additional sanctions on claimants who don’t move into jobs, it turns out that many unemployed people will have their benefits cut at exactly the same time as they are first able to access it. As well as being unfair, this also raises implementation problems. Will an unemployed person be in the mood to build a supportive relationship with an adviser if the first job their advocate provides is to cut their Housing Benefit?

3 Responses to Housing Benefit cut for unemployed people: it could be worse than we thought

  1. gwenhwyfaer
    Nov 9th 2010, 4:05 pm

    Will someone who spends 12 months out of work and then loses their job again five years later be subject to an immediate Housing Benefit cut as their redundancy kicks in

    I’m fairly sure there’s never been a linking period for anything longer than a couple of years, and that length is for IB/IS claims. At present, the JSA linking period is 12 weeks. Without wishing to minimise the fact that the 10% cut after 12 months is every bit as appalling as everyone says it is, it doesn’t help anyone to start scaremongering. Now, if you produce a document that suggests that the goverment are considering extending the linking period to 5 years, I’ll be right behind you; but at present, this is just speculation, and for those of us who are in the situation right now it doesn’t actually help us a great deal to scare the crap out of us every few days.

  2. Nicola Smith

    Nicola Smith
    Nov 9th 2010, 4:11 pm

    Dear Gwenhwyfaer,

    My intention is absolutely not to scaremonger, but to make the point that it seems likely that the JSA cut will apply to people who lose their jobs and then move back into work as well as to people who have claimed constantly for over 12 months. The post also points out that until the Government produces specific information on what any linking period will look like, the precise impact of this cut remains uncertain.

    I know this is an extremely worrying time for people claiming Housing Benefit – our intention with this blog is to make that point as clearly as possible so that the impacts and the uncertainties surrounding these changes are as widely known as possible.

    Nicola

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