The Benefit Cap: Is it working?

by CARIDON LANDLORD SOLUTIONS

19:00 PM, 13th April 2017
About 2 years ago

The Benefit Cap: Is it working?

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The Benefit Cap: Is it working?

On Wednesday 5th April 2017 evening BBC1 Panorama featured “The Benefit Cap: Is It Working?” Seminar details: Caridon

The programme was similar to Dispatches Benefit Families recently featured on Channel 4.

The reporter followed 5 families over 5 months to see how they were affected by the benefit cap and whether they were coping.

Caroline Nokes MP, Minister for Welfare Delivery was featured at the beginning of the programme and made the following statement “The benefit cap was introduced to try and level the playing field between families that are in work and those that are reliant on benefits and to incentivise work”

The show featured Sarah a single mother of 7 children, 3 of which are in foster care, whilst the other 4 remain in Sarah’s care. Sarah has not worked for 17 years and says that she is not currently in the position to work because she has no stable accommodation which hinders her employability.

Prior to the benefit cap Sarah received £428 per week in benefits, following the cap, her benefits were reduced by £44.00 per week causing Sarah to fall into arrears as the £44.00 was deducted from her housing benefit weekly entitlement. Sarah lost her home and belongings.

As a result of her unstable living conditions Sarah’s children were placed with others whilst she resided on her sisters’ sofa.

Whilst looking for accommodation Sarah met with a benefit advisor to check at what rate she would not be affected by the benefit cap and was advised that with 3 children or under, she would fit into the exemption criteria as her benefits would not exceed the £20,000 a year cap threshold. Sarah was told if she chose this option she may have to choose which of her children would stay in her care and which to put into foster care or with family members to prevent her from falling into the arrears again because of the cap.

Eventually Sarah was offered a Council property and was granted £30.00 from Social Services to move and to also provide her with basic necessities. Sarah took her youngest daughter Frankie back to move into the new house with her. This was short lived as Sarah found herself in a catch 22 situation, she could not claim benefits for the children until they lived with her but the property was unsuitable for the children as Sarah could not provide beds or furniture form them.

Social Services were aware of her situation and agreed to take Sarah to collect some furniture but they failed to show up they later contacted her to inform her that they were unable to offer her a lift to collect the furniture.

At the end of the show it was explained that Sarah was not in receipt of Housing Benefit and could possibly fall into the same cycle again.

The show then went onto feature Kim and her husband Steve who have 4 children. Both have been out of work for 9 years. For them to be exempt from the cap they would have to work 24 hours a week between them.

Kim suffers with Myalgic Encephalomyelitis (ME) and depression. Steve has an injury on his arm from previous employment and is restricted from work.

They are affected by the benefit cap and only receive £2.00 per week Housing Benefit they are expected to make up the difference from their other benefits which they have been unable to do, so they have fallen behind and are at risk of losing their home. Although Steve spends approximately £40.00 per week on beers and cigarettes.

The family went to the Council to apply for a DHP to meet their rental obligation this was granted up until March when the family will have to make a new application if their circumstances do not change and they have not found employment.

Coleen’s story was slightly different from the others, Coleen is a 60 year old widow who gave up work to take up kinship of her 4 grandchildren as their mother was unfit to care for them. Colleen used to receive £467.00 per week in benefits which was reduced by £75.00 per week. Her housing benefit entitlement is £50.00 per week because of the cap and like the other families featured she is in arrears.

What is different about Colleen’s story is that she receives £29,000 per year kinship allowance in addition to her state benefits. She firmly states that the money is for her grandchildren so that they can have a good life, enjoy various activities and holidays. She does not feel that she should top up the rent from the kinship allowance that she receives, as those on carers allowance are exempt from the benefit cap, and she is campaigning for the same rulings to apply to kinship guardians.

If her grandchildren went into care it would cost the Local Authority approximately £100,000 to mind them.

We also followed the story of single dad of 4 Bruce, on his quest to find employment but finding it difficult due to child care issues.

He applied for a job in Barclays Bank and was successful but turned down the position as the hours were advertised as 20 hours per week but in fact the job was 25 hours per week. Bruce ideally wanted to work 16-21 hours.

Lastly, we followed Maria a single mother of 3 who has been out of work for 10 years. Her weekly benefit were £450 now cut by £65.00 per week due to the benefit cap.

Again, Maria is expected to cover her rent shortfall from her other benefits and is now £700.00 in arrears causing the Housing Association to serve notice on her, she has applied for a DHP to assist her with the shortfall and to clear the arrears luckily this was awarded short term.

8 years ago Maria was badly assaulted since then she has severe pain in her lower back meaning she cannot lift or bend and is also incontinent, however, DWP have assessed her as being able to work. In order for her to be exempt from the cap she will need to work 16 hours a week.

Throughout the show Maria is seen at the food bank in Wirral and often runs out of hot water or gas and is struggling.

Since the benefit cap has been introduced the Government has reportedly saved £150 million and continues to pay £100 billion in benefits for those of working age which is not really a significant saving considering the other associated costs that the Local Authority bear. To date more than 66,000 households have been capped, from this figure 11 per cent have had their housing benefit cut to 50 pence per week affecting 7585 families.

Since the initial benefit cap came into force only 1 in 20 have responded and are now employed and only 5% was offered a job within a year. Of the people featured in the programme, only 1 found a job which he had to turn down as it was not practical.

I’m sure most LHA/Universal Credit Landlords watched the show but for those landlords who never I thought I would give an overview, the programme is also available to watch on BBC IPlayer.

Again, I would love to hear your views!!

Regards

Sherrelle



Comments

Mick Roberts

8:17 AM, 14th April 2017
About 2 years ago

That DWP woman han't got a clue.

That blonde Sarah was my tenant.
Sarah was with me 3-4 years ago when the 16k cap was in, & we found ways with discretionary etc. But the latest '3 kids & your homeless cap', wasn't sustainable. We wasn't going to be able to pay the mortgage.

Sarah still in touch with me, no kids, no money to get house done to get kids back.

And I've also got one of these 50p per week HB tenant caps-Girl has lived with me in her home 20 years, 3 doors away from her Mums who is ill & she has to look after her.

The BBC did loads of phone interviews & took quotes from me, but din't use one of my quotes.

I wanted to get across stuff like this:

The Govt wish to cap the tenants benefit.

The tenant hasn't been capped at all. Because they still getting the same money as the majority ain't paying the difference to the Landlord. It's the Landlord that gets capped. As the tenant is getting exactly the same amount of money. The tenant isn't bothered. Tenant getting a free house while Landlord has the costs and suffering and hassle of court and eviction.

So who is the cap against as it's only the housing part that has been capped?

This benefit cap.

If they lowered the tenants benefit direct from them and not the Landlords Housing Benefit. At least then the tenant wouldn't be homeless, because they wouldn't have to physically hand over the money.

And they'd have to learn they're getting less money.

Council tax TV licence water etc get paid direct. Why not the important house?

I too, have had no tenants find work cause of the cap, only the normal ones that were looking anyway.

Brilliant article Sherrelle, getting the points across. Alas, will the Govt. ever listen?

Chris Daniel

12:46 PM, 14th April 2017
About 2 years ago

PLEASE don't get me started on this, I see examples of Disabled ( genuinely ) amputees, blind, wheelchair, you name it, struggling to get into places of work and the majority of those out of work complaining about bad backs - but are really fitter than you or I.
Why do people who haven't worked for decades think that Tax payers will pay for their rent in places like London.
If you rent whether on benefit or otherwise, basic economics says you rent where you can afford, - Not EXPECT.

CARIDON LANDLORD SOLUTIONS

13:17 PM, 14th April 2017
About 2 years ago

Hi Mick
The minister said exactly the same thing that she said on Dispatches and was emotionless.
The BC is hitting landlords, LA and HA the most.
88,000 are expected to be affected by the cap that is more homeless families.

Robert Mellors

13:49 PM, 14th April 2017
About 2 years ago

Reply to the comment left by "Chris Daniel" at "14/04/2017 - 12:46":

Hi Chris

I agree in theory that tenants should rent property they can afford, but if it is a lone parent with four kids who's Housing Benefit is restricted to 50p a week, then this I a bit difficult. Do you know of any suitable properties available for 50p a week rent?

Mick Roberts

15:05 PM, 14th April 2017
About 2 years ago

Reply to the comment left by "Robert Mellors" at "14/04/2017 - 13:49":

And Nottingham to rent is about as cheap as it gets, I'd guess in the bottom 20% of the country.

Robert Mellors

15:20 PM, 14th April 2017
About 2 years ago

Reply to the comment left by "Mick Roberts" at "14/04/2017 - 15:05":

Hi Mick

So I presume, like myself, you are not aware of ANY properties anywhere in the UK that would be "affordable" for a family whose HB is capped at 50p per week?

I know that the idea is that these families go and get a job, but about 85% of those affected are physically or mentally disabled or have very young children who are not old enough to go to school or nursery yet, so how can they "go and get a job"?

Mick Roberts

15:57 PM, 14th April 2017
About 2 years ago

Ha ha no, not 50p per week. It astounds me how little some people know about benefit tenants.

I know some of 'em don't want to work, I get that is wrong. But do we chop their heads off?

Yes I hadn't even finished reading your comment, before I typed my last sentence above. And yes proper mentally not there, some of mine, even though not getting the DLA for it.

Robert Mellors

17:57 PM, 14th April 2017
About 2 years ago

Reply to the comment left by "Mick Roberts" at "14/04/2017 - 15:57":

Exactly. I agree that those tenants affected by the Benefit Cap, who are capable of working, should get a job if possible (i.e. they have the skills that match the jobs that are available, and have childcare or flexible hours so that they can also care for their kids), but quite often these conditions do not exist, so it is not as simple as saying "go get a job". There is of course the option of self-employment, but again not everyone is capable of this. And of course we are only talking about the 15 - 20% who are considered to be "jobseekers", the other 80 - 85% are accepted by the DWP as being incapable of work at that particular time due to disabilities and or needing to care for very young children, and yet they are still being affected by the Benefit Cap.

In the past, when tenants in London could not afford their rent (as the HB did not cover the high London rents), then it was easy to say "move to a cheaper area", but under the new Benefit Cap, ALL areas of the UK are affected, and there are NO affordable properties for larger families to rent (3 or more kids). - If anyone knows of any 3+ bedroom properties available for 50p a week, or even £50 a week, ANYWHERE in the UK then please let us all know as I'm sure we can refer lots of homeless families to those properties. - If there are no such properties, then it is pointless saying "move to a cheaper property/area".

There are solutions for some families affected by the Benefit Cap, but these tend to result in higher costs to the taxpayers, so the result of the Benefit Cap is not a saving for the taxpayers, it is an overall increase in the tax burden (though the costs may no longer be called "Housing Benefit", so lying, or really stupid, politicians will still say that their policy has reduced the Housing Benefit bill, but they will omit to say how much extra their policy has cost in other ways).

Mick Roberts

18:14 PM, 14th April 2017
About 2 years ago

Yes, it looks good to Mr & Mrs Joe Bloogs, Oh the HB bill is down, but they keep secret how much is being spent on the full Travelodges that is happening.

Robert Mellors

19:21 PM, 14th April 2017
About 2 years ago

Reply to the comment left by "Mick Roberts" at "14/04/2017 - 18:14":

Yes, the Travelodges and B&Bs etc are funded by the Council's homelessness budget, NOT via Housing Benefit, so these are "hidden" extra costs to the taxpayers.

However, it is not just the accommodation funded by the homelessness budget, there are also added costs to the taxpayer through DHPs, social services costs for having to take the homeless children into care, older people having to go into residential homes, split families causing two properties to be needed instead of one, extra burden on the NHS and court/legal system, and increased crime (as desperate people turn to desperate measures).

There are also knock on effects to schools and the childrens' education (which makes future generations even less employable), as well as the breaking of family ties and networks of support, which cause hardship to families. - Even if people want to blame the parents for having kids, or being ill/disabled, or not working, etc, it is still hundreds of thousands of innocent children who will suffer the consequences (as well as the taxpayers who will have to pay more for all the extra costs).

All of these extra costs are hidden from the public and falsely denied by the politicians (in the same way as they say that s24 will only affect 1 in 5 landlords and won't result in any rent increases for any tenants!!!).

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