The coalition government’s plans to cut the welfare bill and reform how benefits are calculated and paid, including Housing Benefit, have become clearer today. Former Conservative leader and Secretary of State for Work and pensions, Iain Duncan Smith appears to have won his battle with the Treasury and Chancellor George Osbourne to streamline benefits and see a single universal payment replacing housing benefit, income support, incapacity benefit and dozens of other benefits.
This “universal payment” is believed to be a vital reform necessary to find long-term savings and also cut the overall benefits bill over time. Duncan Smith also wants to see a guarantee that anyone who takes work will not be worse off. Claimants will be allowed to retain more of their benefits if they enter work or increase their hours.
Landlord groups, including the Residential Landlords Association, have recently been putting pressure on the DWP to make good on election promises from both the Conservatives and the Liberal Democrats that social tenants could opt in to direct payment of rent to landlords. It’s not clear whether this will form part of proposals.
This victory for benefits reformers within the coalition represents a massive shift in how the benefits system works and is quite possibly the most radical change in the benefits system since its inception. But, as ever, the devil is the detail and we’ll have to wait to see what this change will mean for landlords as more information becomes available. We’d expect to learn more as the Comprehensive Spending Review on 20th October draws closers.
photo credit: Harshil.Shah