Housing benefit payments for young Universal Credit recipients not enough for Redbridge rent

Redbridge is the third worst local authority in the country for housing benefit payment shortfall.

Young Universal Credit recipients get £352 in housing benefits; the average room costs £664 a month – a 47 per cent shortfall.

Cllr Farah Hussain, cabinet member for housing and homelessness, says Redbridge Council is working to support struggling Universal Credit recipients.

She said: “We are fully aware that the introduction of the Government Universal Credit scheme means that some residents are finding things tough. The stark reality is that day-to-day living costs, including current rental costs, far exceed what most people receive through Universal Credit. The ever-increasing gap between housing benefit payments and the private rental market is a prime example of this.”

Leading charities have called on the Government to rethink the "illogical and confusing" system, which they say leaves vulnerable young people, including care leavers, trapped in homeless hostels.

Universal Credit uses the Local Housing Allowance to calculate how much housing benefit claimants are entitled to, with rates based on the private rental market in the local area and set at the same level for all.

Under the system, most single people aged under 35 are only entitled to a set amount to help towards the cost of a room in a shared house - known as the Shared Accommodation Rate, the lowest LHA band.

But analysis of the latest rental market figures from the Office for National Statistics by youth homelessness charity Centrepoint shows there is just one local authority area in England (Rother) where the rate covers the average cost of a shared room.

Centrepoint said prices may have increased since September, when the ONS figures for the previous 12 months were published, leaving young people in an even worse position.

Chief executive Seyi Obakin said it "defies logic" that under-25s are not entitled to greater help with their housing costs, regardless of their vulnerability.

"The current system means that many young people are ready to move on from care or a homelessness hostel but can't," he added.

"The negative impact this has on young people, and the bed-blocking it creates, is simply unsustainable."

Some young people, such as care leavers aged 18 to 21 and over-25s leaving homeless hostels, are able to claim a higher rate for a one-bedroom property.

But this is also not enough to rent the average one-bed in all but two local authorities.

Sam Royston, director of policy and research at The Children's Society, said the "illogical and confusing" system leaves young care leavers facing a financial cliff edge on their 22nd birthday.

He called for the Government to exempt care leavers from the shared accommodation rate until they are 25, to give them a chance to create a stable home of their own.

A Department for Work and Pensions spokesman said about 900,000 people nation-wide would see their benefit rise by an average of £10 in April.

He added: "This government continues to spend around £23 billion a year helping people with their housing costs and since 2011 have provided authorities with more than £1 billion in Discretionary Housing Payments to protect the most vulnerable."

"We continue to spend £95 billion a year on working-age benefits."

Cllr Hussain added: “For those people who are struggling with Universal Credit and are feeling the pinch, we do have support schemes in place. The discretionary housing payment scheme, which is funded by the Department for Work and Pensions and administered by the council, helps people to meet their shortfall in rent, whilst seeking suitable alternative accommodation. We also provide additional welfare benefit support and will shortly be starting a money management service to help residents who are experiencing financial hardship.”

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