Welfare reform continues to cause controversy as a new report by the Scottish Federation of Housing Associations (SFHA) and another by the Work and Pensions Select Committee demonstrate the impact that benefit sanctions and housing benefit reforms are having on vulnerable claimants.

According to the DWP’s own statistics, benefit sanctions have more than doubled since the Coalition took office in 2010.  SFHA’s report questions the fairness and the severity of some of the sanctions being applied, particularly as many people being sanctioned have been assessed as fit for work and had their claim for Employment Support Allowance disallowed.  Their members report that many of those being sanctioned are having their benefits suspended for relatively trivial offences, or have found the conditions of their benefit impossible to fulfil. The punitive sanctions regime has led to vulnerable tenants having no money for weeks at a time for food or heat.

Impact on Housing Benefit Claims
Despite still being legally entitled to Housing Benefit when subject to benefit sanctions, local authorities are suspending claimants benefit until they provide ‘proof of income’.  This has led to rent arrears for many tenants, especially the more vulnerable who have often found it difficult to comply with such requests.

Driven off Benefits?
GCVS previously reported that people are being driven off benefits by sanctions, a fact which appears to be borne out by the report.

The report claims that benefit claims are reducing due to the sanctions regime, not rising employment, pointing to the fact that claims for JSA have fallen more rapidly than the official unemployment statistics.  In Scotland, while the official unemployment rate for the final quarter of 2013 had fallen by 3%, claims for JSA had fallen by a massive 8%.

Homelessness Risk
Some vulnerable tenants, however, have been affected by both the bedroom tax and sanctions and are falling into a spiral of debt, putting their tenancies at risk, or already presenting as homeless.

While the Government boasts that it is saving taxpayers £1m a day due to the bedroom tax, the true cost of the measures are being picked up elsewhere, not least in the misery that those struggling to pay the extra rent endure.

Risk to Housing
In addition to losing revenues through increased arrears, due to the bedroom tax and now sanctions, housing associations are having to invest heavily in helping tenants to sustain their tenancies.

The risk to revenue through rent mounting arrears is presenting a ‘significant threat’ to housing associations’ ability to maintain homes, to service debt for improvements to existing stock and to build new homes.  The SFHA has also raised concerns that lenders to the sector will share such concerns, putting further investment in Scotland’s housing stock at risk.

MPs’ Raise Bedroom Tax Concerns
The sanctions regime, the bedroom tax and other welfare reform measures are having consequences far beyond their intended aims. On the removal of the ‘Spare Room Subsidy’ The Work and Pensions Select Committee reports that,

“We are deeply concerned that the policy is causing severe financial hardship and distress to people with disabilities, many of whom will not easily be able to move. We do not believe that Discretionary Housing Payments are able to provide effective support to these households because of their short-term and temporary nature, the variability in award and the distress that having to re-apply can cause to affected households.”

Indeed, despite the Government’s claim that the system is fairer and is designed to free up larger houses from those who have spare rooms, only 6% of claimants affected by the measure have moved to another property since its introduction according to research by the BBC.

The Select Committee has recommended that in areas where there is a shortage of suitably sized alternative accommodation, or where a home had been significantly adapted for a disabled person, tenants should not be subject to measure.

Sources:  Scottish Federation of Housing Associations, Work and Pensions Select Committee