Local Housing Allowance and Universal Credit
(asked on 2nd February 2024) - View Source
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, how many universal credit claims for which the local housing allowance did not cover rent were subject to deductions for (a) universal credit advances, (b) universal credit overpayments, (c) tax credit overpayments and (d) any combination thereof.
Government spends around £30bn annually on housing support. In addition, Local Housing Allowance (LHA) rates will be increased from April 2024 to the 30th percentile of local market rents. This will mean 1.6 million private renters in receipt of Housing Benefit or Universal Credit (UC) will gain on average around £800 a year in additional help towards their rental costs in 2024-25. This is at a cost of £7bn over five years.
The Secretary of State has committed to review LHA rates annually. That review includes consideration of current rents, as well as the broader fiscal context. LHA rates are not intended to meet all rents in all areas: instead, it ensures that claimants in similar circumstances and area are treated the same.
For those who face a shortfall in meeting their housing costs and require additional support Discretionary Housing Payments (DHP) are available from local authorities. Since 2011 the Government has provided nearly £1.7 billion to local authorities for households who need additional support with their housing costs.
The requested information is provided below
Table 1: Median deduction amount for households where Local Housing Allowance does not cover rent in August 2023. | |
Deduction type | Median deduction amount for the selected deduction type |
Advance Repayments | £43 |
DWP non-fraud overpayments | £49 |
Tax Credit overpayments | £42 |
Other (Not in the above) | £25 |
Table 2: Number of households where Local Housing Allowance does not cover rent in August 2023. | |
Deduction type | Number of Households |
Advance Repayments | 270,000 |
DWP non-fraud overpayments | 140,000 |
Tax Credit overpayments | 90,000 |
Households with any combination of: advance repayments, DWP non-fraud overpayments or tax credit overpayments | 380,000 |
I refer the member to the answer provided on 31 January 2024, that shows the median difference between the cost of rent and the Local Housing Allowance (LHA) in households where rent exceeds the LHA, available here: Written questions and answers - Written questions, answers and statements - UK Parliament
Notes:
1. Household numbers have been rounded to the nearest 10,000 and deduction amounts have been rounded to the nearest £1.
2. Deductions include advance repayments, third party deductions and all other deductions, but exclude sanctions and fraud penalties which are reductions of benefit rather than deductions.
3. "Advances" include all four UC advance types: New Claim, Benefit Transfer, Budgeting and Change of Circumstances.
4. The tables include the number of distinct Universal Credit households subject to a deduction in August 2023.
5. Households could have more than one deduction type so adding claims by deduction type may not sum to the total.
6. The 'other' category in table 1 includes households with a deduction, where the deduction type is not the following: universal credit advances, DWP non-fraud overpayments, tax credit overpayments. The median given is of the sum of all 'other' deductions for each household.
7. It is not possible to separate UC overpayments from other DWP non-fraud overpayments.
8. Figures are provisional and are subject to retrospective change as later data becomes available.