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fru-gal

George Osborne 'targets Housing Benefit' To Pay For Tax Credits Retreat

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George Osborne backs off from a raid on universal credit and eyes cuts to housing benefit instead


I thought it was tax credits they were going to set fire to?

UC does the job doesn't it - well ignoring the fact it can't be administered ... Is a computer system really that hard to do?

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Also this; http://www.insidehousing.co.uk/give-and-take/7012796.blog

Quote from the article;

That hopefully gives some idea of what might be on the agenda if Osborne does look to cut housing benefit by another £2 billion next week. As a final illustration, here are some costed options from the Institute for Fiscal Studies from its Green Budget in February:

  • Abolish housing benefit for the under-25s (estimated savings £750m). Under-21s on JSA are already set to lose their automatic entitlement. The savings estimate assumes exemptions for families with dependent children.
  • Reduce maximum housing benefit for all social tenants from 100% to 90% of rent (£1.6bn). Effectively this would be a bedroom tax on all tenants. However, this savings estiamte includes pensioners (see below).
  • Reduce maximum housing benefit for all tenants from 100% to 90% of rent (£2.5bn). This savings estimate also includes pensioners – they get £6.8bn in housing benefit so exempting them would reduce the saving by £680m.
  • Reduce maximum housing benefit entitlements for social sector tenants to LHA rates (£700m). The IFS estimates that 750,000 social tenants have a rent higher than the local LHA rate and that they would lose an average of £1,000 a year each.
  • Reduce LHA rates from the 30th to 20th percentile (£400m). This would squeeze the options for tenants on housing benefit even further.
Edited by fru-gal

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Abolish housing benefit for the under-25s (estimated savings £750m). Under-21s on JSA are already set to lose their automatic entitlement. The savings estimate assumes exemptions for families with dependent children.

Reduce maximum housing benefit for all social tenants from 100% to 90% of rent (£1.6bn). Effectively this would be a bedroom tax on all tenants. However, this savings estiamte includes pensioners (see below).

Reduce maximum housing benefit for all tenants from 100% to 90% of rent (£2.5bn). This savings estimate also includes pensioners – they get £6.8bn in housing benefit so exempting them would reduce the saving by £680m.

Reduce maximum housing benefit entitlements for social sector tenants to LHA rates (£700m). The IFS estimates that 750,000 social tenants have a rent higher than the local LHA rate and that they would lose an average of £1,000 a year each.

Reduce LHA rates from the 30th to 20th percentile (£400m). This would squeeze the options for tenants on housing benefit even further.

Capping social rents to the LHA rents thing is interesting.

LHA rates - would they then apply the LHA bedroom rules to people in social housing (Bedroom tax via a different route)

Shared Accommodation Rate:£67.20 per week

One Bedroom Rate:£101.98 per week

Two Bedrooms Rate:£119.98 per week

Three Bedrooms Rate:£133.32 per week

Four Bedrooms Rate:£186.47 per week

Or proper Oldham LHA rates are lower.

Oldham & Rochdale BRMA

Shared Accommodation Rate:£55.90 per week

One Bedroom Rate:£83.91 per week

Two Bedrooms Rate:£97.81 per week

Three Bedrooms Rate:£113.92 per week

Four Bedrooms Rate:£149.59 per week

So if a pensioner couple need only one bedroom then round here they're still going to be able to get more than social housing costs.

http://www.rightmove.co.uk/property-to-rent/find/First-Choice-Homes-Oldham/Oldham.html/svr/3123?locationIdentifier=BRANCH%5E106636&propertyStatus=all&includeLetAgreed=true&_includeLetAgreed=on

There's a 2 bed there for 76 quid a week.

Are social rents as high as LHA rates anywhere?

Edited by SarahBell

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Capping social rents to the LHA rents thing is interesting.

LHA rates - would they then apply the LHA bedroom rules to people in social housing (Bedroom tax via a different route)

Shared Accommodation Rate:£67.20 per week

One Bedroom Rate:£101.98 per week

Two Bedrooms Rate:£119.98 per week

Three Bedrooms Rate:£133.32 per week

Four Bedrooms Rate:£186.47 per week

Or proper Oldham LHA rates are lower.

Oldham & Rochdale BRMA

Shared Accommodation Rate:£55.90 per week

One Bedroom Rate:£83.91 per week

Two Bedrooms Rate:£97.81 per week

Three Bedrooms Rate:£113.92 per week

Four Bedrooms Rate:£149.59 per week

So if a pensioner couple need only one bedroom then round here they're still going to be able to get more than social housing costs.

http://www.rightmove.co.uk/property-to-rent/find/First-Choice-Homes-Oldham/Oldham.html/svr/3123?locationIdentifier=BRANCH%5E106636&propertyStatus=all&includeLetAgreed=true&_includeLetAgreed=on

There's a 2 bed there for 76 quid a week.

Are social rents as high as LHA rates anywhere?

I never understood why housing benefit (for social homes) wasn't also capped at a percentage. If private tenants (whose rent is normally much higher) have their rent capped, then it is logical that those in social housing have it capped too. It would be also be better to bring LHA (for private tenants) down further as otherwise this is going to grow and grow and this is just a bung to landlords. At the moment someone claiming LHA can get most of their rent paid by LHA, whilst those who don't claim have to find money from their taxed income (where I live, someone claiming theif full LHA entitlement would have 87% of the equivalent rent I pay, paid for by LHA). It also means that taxpayers are basically paying for the competition to price them out of rented housing (LHA sets a floor on rents).

Edited by fru-gal

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As long as the 30th percentile does the intended job of not creating an automatic upwards ratchet in rent levels for everyone (it should, right?) then I don't have a strong urge to push it down further.

Is there any evidence for the impact of the 30th perecentile (it used to be 50th) ?

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I'd support any of those.

Except the 'no benefits under 25' one - adults are already forced to remain children for far too long. It's disgusting how politicians treat young adults as a soft target.

LHA should also be frozen. Otherwise it is just a price escalator, ensuring that rents rise every year even for those who aren't entitled.

I'm concerned about people who can't pay the rent - but that's the fault of greedy landlords and a nonexistent industrial policy. Hopefully it will be the landlords who will take the hit from this, not the tenants.

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As long as the 30th percentile does the intended job of not creating an automatic upwards ratchet in rent levels for everyone (it should, right?) then I don't have a strong urge to push it down further.

Is there any evidence for the impact of the 30th perecentile (it used to be 50th) ?

You cna look up LHA by postcode and look at historical data

Currently

Central Greater Manchester BRMA

Shared Accommodation Rate:£67.20 per week

One Bedroom Rate:£101.98 per week

Two Bedrooms Rate:£119.98 per week

Three Bedrooms Rate:£133.32 per week

Four Bedrooms Rate:£186.47 per week

Weekly LHA rate for December 2013

Central Greater Manchester BRMA

Shared Accommodation Rate:£65.00 per week

One Bedroom Rate:£97.09 per week

Two Bedrooms Rate:£114.23 per week

Three Bedrooms Rate:£126.92 per week

Four Bedrooms Rate:£187.50 per week

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I'd support any of those.

Except the 'no benefits under 25' one - adults are already forced to remain children for far too long. It's disgusting how politicians treat young adults as a soft target.

LHA should also be frozen. Otherwise it is just a price escalator, ensuring that rents rise every year even for those who aren't entitled.

I'm concerned about people who can't pay the rent - but that's the fault of greedy landlords and a nonexistent industrial policy. Hopefully it will be the landlords who will take the hit from this, not the tenants.

How is having the state subsidise young peoples' accomodation make them any more grown up that having their family subsidise it?

LAHB is inflationary and, like all the other state interventions in the housing market, is to the detriment of the majority of young people.

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I'd support any of those.

Except the 'no benefits under 25' one - adults are already forced to remain children for far too long. It's disgusting how politicians treat young adults as a soft target.

LHA should also be frozen. Otherwise it is just a price escalator, ensuring that rents rise every year even for those who aren't entitled.

I'm concerned about people who can't pay the rent - but that's the fault of greedy landlords and a nonexistent industrial policy. Hopefully it will be the landlords who will take the hit from this, not the tenants.

I am not sure I agree that vulnerable people under 25 shouldn't be able to get benefits. But I don't think that makes someone a child. Many countries have no social support. It doesn't make the population children. Dependance on the state isn't exactly a mature adult thing to do tbh.

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Looks like all round good news if it happens

I think it's fairer if benefits cuts hit the elderly equally to the working age demographic.

I believe housing benefit cuts do this of it's that simple?

Edited by Si1

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I think it's faster if benefits cuts hit the elderly equally to the working age demographic.

I believe housing benefit cuts do this of it's that simple?

I think they have to start including pensioners in the HB changes. It's not fair to remove all HB from the under 25s but let old people live in huge houses at the tax payer's expense.

If it means someone has to do some joined up thinking to provide more suitable accomodation for single and couples than so be it.

The sad thing is bedroom tax was supposed to redress some of the inbalance of bedrooms to people ratio. It hasn't. It should have done.

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I think they have to start including pensioners in the HB changes. It's not fair to remove all HB from the under 25s but let old people live in huge houses at the tax payer's expense.

If it means someone has to do some joined up thinking to provide more suitable accomodation for single and couples than so be it.

The sad thing is bedroom tax was supposed to redress some of the inbalance of bedrooms to people ratio. It hasn't. It should have done.

A major plank of Osborne's political approach is political cost.

He's favoured oldies up to now because, AFAIK, that was key to winning the last election.

The brouhaha surrounding the tax credits changes, to my mind, indicates the significant political disquiet of the working age population at having to suffer whilst the 60 somethings, who were in charge of the levers of power leading up to this f#cking mess, get away with comfy state subsidies conveniently ignoring the fact that they paid on far less than they are now taking out.

Edited by Si1

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I think they have to start including pensioners in the HB changes. It's not fair to remove all HB from the under 25s but let old people live in huge houses at the tax payer's expense.

If it means someone has to do some joined up thinking to provide more suitable accomodation for single and couples than so be it.

The sad thing is bedroom tax was supposed to redress some of the inbalance of bedrooms to people ratio. It hasn't. It should have done.

+1 and pension tax credit should look at the value of your home.

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I am not sure I agree that vulnerable people under 25 shouldn't be able to get benefits. But I don't think that makes someone a child. Many countries have no social support. It doesn't make the population children. Dependance on the state isn't exactly a mature adult thing to do tbh.

But in a country where over 25s have full entitlement to benefits either the young have to grow up faster than the earlier, coddled generation, or go to their parents with the being bowl out.

The underlying expectation from the government is that parents will step in and help their children with housing. Woe betide the young adult who tries to strike out on their own.

People used to leave school at 16 and build decent careers and leave home and never look back. Good luck doing that now.

Either benefits are a necessary top up due to our imbalanced economy, or they're infantalising and no-one but the most needy should be claiming.

Making one set of people more entitled than another is just politicking.

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+1 and pension tax credit should look at the value of your home.

I'd go further. All benefits, tax credits, care bills and the like should be set off as a charge against your property if you own, to be repaid on sale (or from your estate on death).

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All that chopping and changing and they're going to do this then no they're going to do that instead and when that fails they'll do another thing - it must all be part of Osborne's masterplan to soon make the UK the richest economy like he said before the general election.

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Here's a radical idea.

Instead of pumping up house prices, why not exert downward pressure. Or even, god forbid, leave them the feck alone.

That'll save billions upon billions of housing benefit to begin with, not to mention a whole raft of benefits in the longer term.

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They would love to link social housing rents to LHA and then freeze them,mainly as it gets them the bedroom tax across the whole of social housing.Lowering to 90% maximum covered gets bad headlines for little gain.It would be far better to lower to the bottom 20 percentile and might be considered.

I wouldnt be surprised if the tax credit cuts are simply delayed and staged.The main one is lowering the allowable earnings.He might even get the same cuts in over three years plus added housing benefit/LHA cuts.

IDS fought to defend UC so hard because he knows if the government base their deficit reduction on UC amounts he would get found out quite quickly that it is way behind schedule.

Tax Credits and HB are the only real areas to get the amounts he needs.

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But in a country where over 25s have full entitlement to benefits either the young have to grow up faster than the earlier, coddled generation, or go to their parents with the being bowl out.

The underlying expectation from the government is that parents will step in and help their children with housing. Woe betide the young adult who tries to strike out on their own.

People used to leave school at 16 and build decent careers and leave home and never look back. Good luck doing that now.

Either benefits are a necessary top up due to our imbalanced economy, or they're infantalising and no-one but the most needy should be claiming.

Making one set of people more entitled than another is just politicking.

This +1

It does my head in at that the level of assistance the boomers/core voters are getting. The younger generation (me included) can only have prosperity when go back to a real economy and the rentier parasites are taken down.

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I think they have to start including pensioners in the HB changes. It's not fair to remove all HB from the under 25s but let old people live in huge houses at the tax payer's expense.

If it means someone has to do some joined up thinking to provide more suitable accomodation for single and couples than so be it.

The sad thing is bedroom tax was supposed to redress some of the inbalance of bedrooms to people ratio. It hasn't. It should have done.

I think your right on this.At some point housing benefit will need to be reformed for pensioners.Given the amount renting and lack of pensions.The easiest way would be to lower the allowable income levels before you pay.Set it at £120 per couple/£74 single person whatever age you are would suck a lot of pensioners into paying some of the rent.I dont think they will tackle it yet though.Its working age benefits he is setting his stall out on.

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