Report looks at the April 2013 changes to Housing Benefit and LHA

The National Audit Office published a report this week that took a close look at how the Department for Work and Pensions will manage the changes in Housing Benefit that are due to take effect in 2013. Starting in April of 2013, the amount of support that will be paid to tenants that live in under-occupied homes and the private sector will be decreased. New changes are expected to save the government as much as two billion pounds.

The amount that is paid for private sector accommodation by the Local Housing Allowance will now have a cap placed on it on a yearly basis. It also will have to increase its allowance using the Consumer Prices Index in place of the higher rent inflation that is often much higher. The watchdog organisation is afraid that the changes may place pressure on how much affordable housing is available to those in need.

Increasing pressure on rent and increasing employment may help lower the impact of the change according to the NAO. Based on the trends 48% of local authorities may find themselves low on available properties over the next five years. In addition, further assessment will be completed to see how the changes will affect the local administrative burden on authorities.

It is estimated that about two million households will be affected by the changes. In addition, claimants that live in larger and more expensive areas such as London and other cities are expected to be among the most affected. Families with a large amount of children are also likely to be highly affected by the changes as their eligibility will change.