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