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Housing and Welfare Reforms: Issues for ALMOs

Housing and Welfare Reforms: Issues for ALMOs. Steve Wilcox University of York. Housing and welfare reforms: Issues for ALMOs. Housing Benefit Reforms The Maximum Benefit Cap Universal Credits. The Housing benefit reforms. Private sector reforms Caps & lower LHA rates

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Housing and Welfare Reforms: Issues for ALMOs

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  1. Housing and Welfare Reforms:Issues for ALMOs Steve Wilcox University of York

  2. Housing and welfare reforms: Issues for ALMOs • Housing Benefit Reforms • The Maximum Benefit Cap • Universal Credits

  3. The Housing benefit reforms • Private sector reforms • Caps & lower LHA rates • CPI Indexation (& definition) • Increased non dependent deductions • Social sector size limits • Additional bedroom for carers • Discretionary Housing Payments increase

  4. Caps and Lower LHA Rates • Maximum National Caps • Maximum 4 Bed Rate • 30th Percentile Rates (5/8% below median) • Removing £15 excess provisions • Increased pressure on social sector

  5. The Maximum Benefit Cap • Based on national average earnings • Applies to all tenures • Only applies to out of work households • Doesn’t apply to disabled or retired • Impact on large families in high rent areas • Likely to be some modifications?

  6. Impact of Maximum Benefit Cap

  7. Universal Credits I • Major Structural Simplification • Based on Dynamic Benefits • Single Integrated Taper • Aims to promote work incentives • Higher initial costs • Long term savings from work impacts ?

  8. Universal Credits II • Transitional protection • Future ‘gainers’ and ‘losers’ • Integrated ‘real time’ weekly adjustments • Challenging IT and Admin Reforms • Limited lone parent allowances • Help with housing costs reconfigured

  9. Universal Credits:Help with housing costs • High earnings disregard • But reduced if help with housing costs • Mortgage costs included (?) • Council tax benefit excluded (?) • Many in work claimants better off • But complexity will dilute message

  10. Marginal deductions from gross earnings:Current system and universal credit

  11. The Earnings Disregard Formula • Earnings disregard for tenants = • Higher earnings disregard • Rent times 1.5 • Subject to lower earnings disregard floor • But no disregard for a single person

  12. Higher and lower earnings disregards

  13. The current benefit poverty trap Couple with two children. £80 pw rent. 2010/11 Rates Under £180 pw less than 30 hours

  14. The structure of universal credits Couple with two children. £80 pw rent.

  15. Net impact of systems compared Couple + 2 children. Rent £80. Council Tax £15. £5.93 per hour earnings.

  16. Universal Credit Issues • Risks & intermediate rents • The national cap & work • Complexity of earnings disregards • The direct payment issue(s) • The monthly payment norm • Provisions for mortgage costs? • Council tax benefit?

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