New Housing Benefit cuts: what effect will they have?

Generali

Shakethedisease wrote: »

But if you have a family ? Or single and one child to house/look after ? Still possible ?

or £664 a year. Thats a lot when you're already on minimun wage.

I agree with all of this - it isn't possible to raise a family in London on the minimum wage without benefits. The trouble is, what are you going to do about it? The UK can't afford to pay cleaners and street sweepers the £10-12/hr required, as a guess, to raise a small family in London. I lived in London in the early 1990s working as a barman grossing £3.02/hr for a 39hr week (live out) so I know full well what this is like.

Part of the problem, as dopester identifies, is that wage subsidies like tax credits and so on decrease salaries by increasing the tax burden while increasing the cost of living. Paying the working poor housing benefit is in effect a transfer of income from higher paid workers to slum landlords.

dktreesea

drc wrote: »

I am sure this has already been said (sorry - haven't read through the whole thread) but apart from the upper limit caps, they are also going to reduce LHA so from October 2011, Local Housing Allowance rates will be set at the 30th percentile of local rents for all bands.

Well, I wish the government the best of British luck, with that plan, because they are surely going to need it when the landlords refuse to lower their rents, the recipients of HB can then not afford to rent the flat/house and end up evicted, and the council, on behalf of the taxpayers, has to then spend three times as much putting the family up in a B&B because they no longer have any suitable social housing to give them.

dktreesea

Generali wrote: »

I agree with all of this - it isn't possible to raise a family in London on the minimum wage without benefits. The trouble is, what are you going to do about it? The UK can't afford to pay cleaners and street sweepers the £10-12/hr required, as a guess, to raise a small family in London. I lived in London in the early 1990s working as a barman grossing £3.02/hr for a 39hr week (live out) so I know full well what this is like.

Part of the problem, as dopester identifies, is that wage subsidies like tax credits and so on decrease salaries by increasing the tax burden while increasing the cost of living. Paying the working poor housing benefit is in effect a transfer of income from higher paid workers to slum landlords.

Well said, exactly! Housing benefit subsidises the landlords at the expense of any taxpayer unfortunate enough to earn £10 an hour or more. The same with the minimum wage. It's about time employers pay the whole ofd the people's wages and not divide the burden between themselves and other taxpayers.

The idea that if businesses had to pay proper wages, they wouldn't employ anyone, is ludicrous. Take the building sites around where I live. Prior to the heavily subsidised national minimum wage coming into being, those sites had to pay good money for their skilled workers. Nowadays they can just pay the minimum wage and pocket the difference, confident in the knowledge that, if the employee has a family, the government will give that employee a healthy financial subsidy, the more children the merrier.

Emy1501

Would have liked to see it capped at £300 a week rather than £400 plus rather than a 10% reduction for those who don't get work for 2 years a 20% reduction falling to 40% reduction for those out of work for 5 years.

Should be a protection in their for the disabled who are not able to work plus some sort of credit system which allows those who have been in work for say 5-10 years to get an extra allowance for say 2 years if they find themselves out of work etc.

People who want to buy are always told on here if they can't afford in a certain area then move to another part of the country etc. Should be the same for benefit claimants.

We need to close all loop holes for those who can't be bothered to work and make life tough for these people and they may then start to realise that life is better with a job rather than without one.

A few years ago I rented to a couple with a kid. They were on benefit as husband claimed he could only find work as a teacher 2 days a week and wife I claimed also to be a teacher could not find work. After a few years it was time for them to move on as they were always paying the rent etc. Even though they only had one kid they decided that a 2 bed house was not suitable and therefore turned their nose up at any property which was not a three bed. In the end they got evicted etc and god know whether reality set in after that etc. It also amazes me that claimants can still claim an allowance and if the rent is cheaper they can pocket the difference!

Generali

dktreesea wrote: »

Well said, exactly! Housing benefit subsidises the landlords at the expense of any taxpayer unfortunate enough to earn £10 an hour or more. The same with the minimum wage. It's about time employers pay the whole ofd the people's wages and not divide the burden between themselves and other taxpayers.

The idea that if businesses had to pay proper wages, they wouldn't employ anyone, is ludicrous. Take the building sites around where I live. Prior to the heavily subsidised national minimum wage coming into being, those sites had to pay good money for their skilled workers. Nowadays they can just pay the minimum wage and pocket the difference, confident in the knowledge that, if the employee has a family, the government will give that employee a healthy financial subsidy, the more children the merrier.

If you cut taxes on businesses and employees you don't need the subsidy any more so long as the minimum wage is increased commensurately. As you would no longer be paying a load of civil servants to administer the transfer of money there would be a net saving so both employees and employers could gain!

chucky

dopester wrote: »

I'm not convinced those housing benefit top-ups don't have some effect of artificially increasing rent values by themselves.

very true - i think that they probably do, proving that they do is another matter though.

i've re-thought about this change and for the greater good is a very good move.

dopester wrote: »

The working people are more important that HB claimers who don't have jobs and are just claiming significant amounts of HB and other benefits in and closely around central London - imo.

in this change we're going to cause people pain like divorced mothers who have young children who cannot work for example. do they have no choice but to move to a cheaper area?

in this situation harsh in my view but the bigger picture that "working people are more important" is very true and 100% correct.

drc

Generali wrote: »

If you cut taxes on businesses and employees you don't need the subsidy any more so long as the minimum wage is increased commensurately. As you would no longer be paying a load of civil servants to administer the transfer of money there would be a net saving so both employees and employers could gain!

Isn't this what is going to happen? Corporation tax rates are coming down, employers NI is going to be reduced (or remain static) and I read they are going to abolish IR35, so looks like this government is definitely trying to encourage business and entrepreneurship.

They need to do this whilst also reducing the amount of tax credits that can be paid and raise the tax threshold incrementally year on year so it pays to work for the employee and the employer is no longer subsidised by the taxpayer.

chewmylegoff

dktreesea wrote: »

Well, I wish the government the best of British luck, with that plan, because they are surely going to need it when the landlords refuse to lower their rents, the recipients of HB can then not afford to rent the flat/house and end up evicted, and the council, on behalf of the taxpayers, has to then spend three times as much putting the family up in a B&B because they no longer have any suitable social housing to give them.

if landlords refuse to drop their rents, who will they rent their properties to?

IveSeenTheLight

chewmylegoff wrote: »

if landlords refuse to drop their rents, who will they rent their properties to?

there is a lot of assumption that rents have to lower.

I've just increased one of my rents, because there is sufficient demand (desire and ability) for the local market to increase.

the other property I could raise, however I am leaving my good tenants with the same rent they have paid for the last 3 1/2 years.
If and when they move on, then that property rent will be re-evaluated, with an increase given the current market rates.

ILW

Emy1501 wrote: »

People who want to buy are always told on here if they can't afford in a certain area then move to another part of the country etc. Should be the same for benefit claimants.

!

I truly believe that is at the heart of the matter.
Why should claimants be able to demand better properties in better areas than those that pay their own way.

Seems totally wrong to me, but hopefully is now being addressed.