10 JUL 2019
Thank you for taking the time to email me with your concerns about homeless young people and the shared accommodation rate.
I understand your concern on this matter but hope the following information on this topic from the House of Commons Library concerning eligibility and exemptions provides some reassurance:
The first point to note is that the personal allowances, which form part of the calculation of entitlement to Housing Benefit/Local Housing Allowance for all claimants, are set at lower levels for single people under 25. For example, from April 2019 the personal allowance for a single Housing Benefit claimant aged under 25 is £57.90 per week, while the allowance for someone aged over 25 is £73.10. The personal allowance is the minimum amount deemed necessary for the normal expenses of a person or couple in the relevant age group.
The differential treatment of single benefit claimants (without children) aged under and over 25 was introduced by the Social Security Act 1988. Prior to then, the rate of benefit which was payable depended on whether the person was a "householder", a distinction which caused considerable administrative difficulties. The introduction of the age threshold was justified on the grounds that most young people under 25 did not live independently and accordingly had fewer financial responsibilities, and because of the need to target resources on those likely to be in greatest need.
In addition, the Shared Accommodation Rate (SAR) was introduced in 1996 – this measure limited the Housing Benefit that a single person under the age of 25 could receive to the average rent level charged for a room in a shared house. The SAR was introduced "to ensure that Housing Benefit does not encourage young people to leave the parental home unnecessarily or to take on higher priced accommodation at the taxpayers' expense than they could afford from their own earnings." [Department of Social Security Press Notice, 96/09, 2 April 1996].
There are some exemptions from the SAR for certain categories of claimant:
local Authority and housing association tenants. Social sector tenants normally have their rent met in full (less deductions for non-dependants and earnings) as rents are generally below market rates;
tenants in certain supported accommodation. This covers tenants who are in accommodation where the landlord is a county council, voluntary organisation, housing association or registered charity and provides care, support or supervision. These cases are assessed under pre 1996 rules which recognise that their housing costs may be more expensive;
claimants entitled to the Severe Disability Premium - that is people who receive the middle or highest rate care component of Disability Living Allowance, or the Personal Independence Payment daily living component, who live alone and who don't have a carer;
claimants who have a non-dependant residing with them;
claimants under the age of 22 who were formerly in social services care. This allows care leavers some leeway to become settled and move in to work or establish links whereby they could share accommodation with others. [this exemption does not apply to the extended age group]; and
claimants entitled to an extra bedroom to allow for a non-resident carer to sleep over where overnight care is required.
Local Housing Allowance (LHA) was rolled-out for new claimants living in the deregulated private rented sector after 7 April 2008. LHA is not a benefit in its own right – it involves a variation in the way in which the rent element of Housing Benefit (HB) is calculated for tenants living in the deregulated private rented sector. When initially introduced, LHA rates for properties with different numbers of bedrooms within a Broad Rental Market Area (BRMA) were calculated at the median of market rents. Since April 2011, they have been calculated on the basis of the lowest 30th percentile of market rents within the BRMA. Furthermore, LHA rates have been frozen since April 2016 and will remain so until 1 April 2020.
For example, these are the current LHA rates within the South Devon BRMA – the LHA rate is the maximum weekly rent that Housing Benefit will cover for a deregulated tenancy in the private rented sector:
Shared Accommodation Rate: £63.50 per week
One Bedroom Rate: £96.91 per week
Two Bedrooms Rate: £128.19 per week
Three Bedrooms Rate: £153.02 per week
Four Bedrooms Rate: £192.24 per week
As part of the October 2010 Spending Review, the Coalition Government announced that the SAR would be extended to cover single claimants up to age 35. This change was implemented with effect from 1 January 2012 by The Housing Benefit (Amendment) Regulations 2011 (SI 2011/1736). Two further exemptions were added which only apply to the extended age group:
...the Government has looked carefully at the arguments presented by a number of commentators, the Committee and other Government departments on the potential effect of these changes on specific groups and has decided to introduce two additional exemptions which will apply to the extended age group only. The first is for a small but clearly defined group of ex-offenders who are subject to management by more than one agency under the Multi Agency Public Protection Arrangements (MAPPA) and who are most likely to pose a risk of serious harm to others if they share accommodation. Offenders subject to MAPPA arrangements are in the main 25 years or over. In Scotland, MAPPA legislation is not yet fully in force in relation to violent and certain other offenders and so local authorities will be responsible for applying the exemption where it is considered that a claimant would present a risk of causing serious harm to the public. The Government is keen to avoid a situation that potentially risks putting members of the public in danger.
The second exemption is for people who have spent three months or more in a homeless hostel, or more than one hostel, specialising in rehabilitating and resettling this group within the community. To benefit from this exemption claimants would need to have been offered and to have accepted support services to enable them to be rehabilitated or resettled in the community. The three month qualifying condition is designed to target the exemption at people receiving a sustained programme of rehabilitation rather than people who have sporadic, short term stays. This exemption addresses the concerns raised by a number of commentators about the impact of these changes on rough sleepers, and in particular the silting up of hostel accommodation. The Government accepts that without this it will be difficult to secure suitable move-on accommodation for this group to help them in to a more settled way of life, which could undermine the Government's ambition to end rough sleeping. This exemption has been targeted at people aged 25 and over who are at greater risk of rough sleeping.
[SSAC Report on SI 2011/1736 and Government response, July 2011]