EMERGENCY BUDGET: Housing benefits capped and cut

22 June 2010 | By Samuel Dale

The chancellor of the exchequer has announced a cap on housing benefits and plans to reduce their cost by almost £2bn in today’s Budget.

George Osborne pledged to reduce the housing benefit budget by £1.8bn during the parliament.

To do this he is introducing a cap on housing benefits at £280 a week for a one-bedroom property to £400 a week for four bedrooms or over.

And social tenants entitlement to properly sized homes will be limited, deductions up-rated and certain awards reduced.

The chancellor says: “ Spending on housing benefit has risen from £14bn ten years ago to £21bn today.

“That is close to a 50% increase over and above inflation. Costs are completely out of control.”

Readers' comments (15)

andy_surprised | 22 Jun 2010 3:24 pm
Well I'm surprised that anyone could even now be receiving anything near £280 per WEEK. My claim for housing benefit hit the council ceiling at £300 per MONTH some years ago leaving me to pay the rest from my £60 per week job seeker's allowance while I looked for work.

So how on earth can this new limit be seen as a bad thing? Has someone confused weeks with months?
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Andrew Oliver | 22 Jun 2010 5:14 pm
Nobody wants child poverty in Britain and imperfect as it is no-one has come up with a better measure than giving benefits to children's parents.

However, given that people with jobs often can't afford to buy or rent in the area where they work at some point we have to start making those raising families without planning to be employed in the long-term move to cheaper neighbourhoods.

So, I welcome these caps, they are not so swingeing that everyone will be forced into the worst kind of housing in the toughest neighbourhoods, but how do you incentivise people to aspire to doing better for their families by the fruits of their labours if you let them live in million pound properties paid for by the state.
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Anonymous | 22 Jun 2010 7:54 pm
I too am surprised at the cap of £280 per week. (Are they *sure* its 'per week')???

At first I was somewhat concerned - being self employed and in the first year of business - housing benefit being vital to surviving long enough for the business income to increase to a point where I can actually afford to pay rent (i.e get off housing benefit as soon as possible). I thought the cap was £280 per month, but even that is way over what I'm supported with so thankfully I'll be able to survive long enough to stabilise the business!

I can't imagine anyone already getting more than around £1200.00 per month in housing benefit alone - that's around £14K per annum!

I would be interested to know the circumstances of people that are going to be affected by these cuts before stating how I feel about it, but for now I can't imagine why anyone would need to have such a large sum in housing benefit - except for extreme circumstances (and in those cases it would be so few people that the new cap would be pointless for the government - there must be a LOT of people for it to be worth their while)...
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john harrison | 22 Jun 2010 9:36 pm
Its about time HB was cut.I live in Westminster and people are claiming over £500 a week in an apartment for a couple with a child.How the hell can they ever aspire to work? most of these people have migrated from european countrys and other states(Edgware Road landlords)looking for an easy way to live and propagate kids...no intention of working. This has to be an incentive to stay away if you can't afford to be here.by the way i live in a tourist hostel for £70 a week of which there are hundreds in london..people who aspire to work and contribute to society should be here first not claiming huge HB in flats at £280 a week for a single person.
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Anonymous | 22 Jun 2010 10:18 pm
It is tough but it has to be done, Labour seemed to just carry on spending it is only now the Torys have the actual job of sorting the finances out. What a mess!
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A Working mum | 23 Jun 2010 9:10 am
I am a lone parent in f/t work, I have an 11 year old daughter. My wage is low- £13,000. I can not get a mortgage, am not eligible for social housing. So I rent privately. In our area of Hampshire rents for a 2bdrm house are around £850 PCM. That's my entire month's wage. So I get help from housing benefit- I still pay the majority myself. Without this we would be homeless! We are in a modest, compact 2 bdrm terrace. Nothing grand. I am worried how the cap on HB will affect us, having already been homeless once, (relationship breakdown) which is how I came to be renting in the private sector in the first place. I'm not a sponger- I work hard and am proud to work.
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Redundant Mum | 23 Jun 2010 1:11 pm
After reading some of the post I am shocked to learn that someone who has children is not eligable for social housing. David Cameron it is not fare that someone who works has a child is not able to rent a home via the council or housing association this is also something the goverment should be looking at. People will not be able to live or put food in there childrens mouths.
Please Goverment siv out the people that really are taking the biscuit on public funds and not hard working people. Or people like myself who happen to be on benefits due to loosing there jobs.
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Mel | 23 Jun 2010 11:27 pm
The £280 per week limit is an example of the HIGHEST current rent payable in certain areas - I assume central London. The real bombshell here is that ALL rates in ALL areas are going to be dropped to 30% of the area's market rent - so someone currently eligible for £600 per month will only get £180 under the new rules, they will have to make up the difference themselves. This seems to be getting missed by the papers and blogs by the sensationalism of the £100k a year stories, and will affect a lot of working people as well as those whose sole income is benefits.
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Anonymous | 23 Jun 2010 11:31 pm
i am stunned at this my rent is over £1000 a month we cannot get social housing as we had to sell our last home due to sickeness and unable to work((plus unable to get adequate points to apply for any housing anywhere in the lothians) and had to rent for the sake of our children i cannot work with 4 kids to look after if i had adequate childcare help i would but you calculate school holidays and lack of help via family how are we supposed to do this my partner works hard and works varied shifts and unable to even work at weekends we are not all spongers and money does not go far shopping at farmfoods and poundland to survive is not fun i tell you transport i have to cycle or walk no car holidays nights out drink ciggies etc clothing is a luxury i am worried sick about this i really dont fancy having to drag my family to a hostel what is the goverment playing at? the rich are still overpowering the poor.....
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Anonymous | 24 Jun 2010 1:56 am
The Liberals have sold all the people who voted for them i was not one.
They have taken the Tory 10 piecesof silver
The Tories are a right wing party still with the thatcher ideology does anyone remember the misery of the eighties as the rich got rich and the poor got poorer.
We need to protest and not stand for these extreme attacks on the vunerable in society organise i can see riots on the streets like Nick Clegg the Traitor said before he became intoxicated with the vice of power he has lost the plot Liberals fight him you sheep.
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