Housing benefit reform put on ice - I/H , Tom Lloyd 9/12/09
The government has backed down on proposals to scrap excess housing benefit payments available to tenants through the local housing allowance.
Under the existing system, tenants who receive housing benefit and rent from private landlords can keep £15 a week of their benefits if they shop around for a good deal.
But in the Budget in April the chancellor, Alistair Darling, said the excess payment would be scrapped from April 2010.
Today’s pre-Budget report has reversed that decision, stating ‘recent consultation suggests that there are disadvantages to withdrawing the excess’.
The government will now delay any reform until April 2011, and has said it will launch an ‘immediate’ consultation on its approach to housing benefit reform and affordability.
The report states: ‘The government will also introduce a package of administrative reforms that will save around £100 million per year by 2012-13. This includes measures to reduce the scope for fraud and error across the benefits system to ensure recipients receive correct payments.’