Source · Select Committees · Work and Pensions Committee
Recommendation 7
7
Deferred
Paragraph: 57
Increase Housing Benefit applicable amount for young people in supported accommodation to remove cliff edge
Recommendation
The benefit rules for Universal Credit and Housing Benefit can interact in such a way that a cliff edge arises when claimants in supported accommodation who must Plan for Jobs and employment support 81 claim both benefits work more than 12 hours a week. This is counter-productive to encouraging younger employees to return to the labour market. DWP should not maintain any policies or practices that stand in the way of people who want to work. Not only does this reduce labour market engagement in the short-term it can also prevent people from progressing at work and becoming financially independent in the long-term. DWP needs to remove this cliff edge. The Government should increase the applicable amount within Housing Benefit for young people in supported accommodation to £117.56 a week, either by raising the personal allowance or by introducing a new premium. This would bring the benefit taper in line with those not in supported housing. This change should be implemented no later than the start of the 2024–25 financial year.
Government Response Summary
The government acknowledges the challenge but states that the recommended approach would be challenging to implement by April 2024. They are designing a proof of concept with the West Midlands Combined Authority to test financial support for young people.
Paragraph Reference:
57
Government Response
Deferred
HM Government
Deferred
The Department acknowledges the challenge presented by the interaction between Universal Credit and Housing Benefit for those residing in supported housing and it remains the Department’s ambition to address this issue as part of on-going work to improve support for the most vulnerable in society. The recommended approach detailed within the report risks disadvantaging some customer groups. However, we acknowledge that there would also be significant positive implications from such a change, including impact on claimants’ well-being and the wider labour market, so officials are working to develop effective and deliverable policy options. After a successful bid to the Labour Market Evaluations and Pilot Fund, we are also designing a proof of concept in conjunction with West Midlands Combined Authority. The voluntary PoC will test financial support for eligible 18–24-year-olds living in commissioned supported housing who move into work or increase their working hours and cease receiving Universal Credit. They will receive a top up payment for 6 months. We are hopeful that this will provide new insight to inform future policy. The Department are keen to act but it would be challenging to eradicate this issue as early as April 2024. All options would require secondary legislation and system upgrades to enable implementation. Funding would also need to be secured through a future fiscal event before implementation activity could begin.