After publication of the Welfare Reform Bill last year, many expressed concern about its plan to pay housing benefit direct to tenants instead of landlords.
We believe lender funding to social landlords could be jeopardised by tenants failing to pay their rent. This could push up arrears and make the proposition more risky for lenders and investors.
Along with other concerned organisations, we supported an amendment to the bill to allow recipients to choose whether they or the landlord should receive their benefit. That amendment has now been withdrawn.
This month the government announced five local authorities and their housing association partners will begin a pilot on the consequences of direct payments from June. The project will take a year and will test how, not if, the system will work – the commitment to direct payments stands.
We also disagreed with the bill’s plan to impose a tax on social housing households that had one or more extra bedrooms. The House of Lords backed a compromise amendment exempting families with one additional bedroom and no alternative property.
Without this, the bill would penalise many households for having an extra room, rather than targeting high level under-occupation, its main objective. We hope MPs will allow the bedroom tax amendment to stand when the bill returns to the House of Commons next month.