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Opinion: benefit claimants being paid to move away

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Opinion: benefit claimants being paid to move away

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Published by Max Salsbury for 24dash.com in Housing and also in Local Government

Camden Council 'to deliver £3 million savings' through improved benefits service Camden Council 'to deliver £3 million savings' through improved benefits service

The London Borough of Brent is to hand one-off payments of £6,500 to around 150 large families on benefits to move out of the area.

The move is billed as part of a £1m ‘New Start’ scheme intended to help those most hit by welfare cuts.

Here Judith Barnes, partner & head of local government at international law firm DAC Beachcroft LLP, reacts to the news:

This looks like the sign of things to come. Local authorities, particularly those in London, have been adopting a range of measures to help those on benefits that will be most affected by the Coalition changes in benefit entitlements.

Last year, several London Boroughs were renting or buying homes in places as far afield as the south coast and the Midlands in which to house private rented tenants at lower cost, with the reduction in local housing allowance. The cap on local housing allowance is between £250-400 depending upon the size of the property.

Additionally, the Universal Credit cap on total benefits, including housing benefit of £500 per week (making £26,000 pa - the average household income for a family), which is being phased in from 2013, may well force a family re-think on accommodation.

Many London Boroughs are now offering a financial incentive in order to help families that will not be able to afford the rent on their homes due to the cap on housing benefit that will be introduced and the so-called 'bedroom tax' that will result in a clawback of housing benefit of up to 25 percent for surplus rooms.

While Ealing offers £1,000 for tenants to move out of the borough and an additional £1,000 for giving up an extra bedroom, Brent is reported to be offering £6,500. It is not clear what the financial incentive will cover (other than perhaps removal costs) but the issue for the family may be the difficulty in finding a suitable rented home that is affordable further outside the capital and the impact that will have on schools, friends and communities in London.

Those hard-working families in poorly remunerated positions may also be losing some council tax benefit, though if they are working they should be able to retain a proportion of the extra income over the cap. However, the financial pressures may still be too much for some families who are likely to resent the need to move. Many will be reluctant to give up a job as it is often said that it is easier to get a job if you are employed. Where the decision is to move much wider afield the tenants may also need to think about securing childcare and may lose existing support networks, so these are just a snapshot of the factors that need to be taken into account.

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