A leading Welsh homelessness charity has warned that changes to the housing benefit system could leave thousands of people at risk of losing their homes.
Shelter Cymru was responding to a report by the Department for Work and Pensions (DWP), which reveals that almost all the people in Wales who receive Local Housing Allowance (the type of housing benefit paid to tenants in the private rented sector) will lose out by an average of nine pounds a week under the new system proposed by the Westminster Government.
Currently, 48,710 people in Wales receive Local Housing Allowance (LHA). The DWP estimates that 48,530 of these will lose out under the package of reforms due to come into force in 2011-2012.
John Puzey, director of Shelter Cymru, said: “The current system of housing benefit is far from perfect and we have long argued for reform to make it more straightforward and to tackle disincentives to work.
“However, we are very concerned that the changes outlined by the Westminster government will result in many more people falling into arrears and facing the threat of eviction and homelessness.
“Many people in the private rented sector already make up a shortfall between their benefit and the cost of their rent. These changes will put an extra strain on their already limited resources.
“A recent survey we carried out revealed that nearly half of people in Wales who have a mortgage or pay rent struggle at least some of the time with their payments, and 23 per cent say that housing costs are a source of anxiety in their household.
“Worryingly, nearly a quarter of those questioned also said that they have reduced the amount they spend on food to meet housing costs, while 14 per cent have had to reduce the amount they spend on heating.
“The changes to Local Housing Allowance are just one part of a package of measures that we believe will only exacerbate this situation and hit vulnerable people especially hard.”
The changes entail calculating LHA rates at the 30th percentile of private sector rents in the area instead of the current method, which bases LHA rates on the average private rent. The LHA will also be capped at £250 a week for a one-bedroom home, £290 for two bedrooms, £340 for three bedrooms and £400 for four bedrooms.
In Neath Port Talbot, 99 per cent of those renting two-bedroom homes would lose out. In Gwynedd, the average loss for those renting four-bedroom homes would be £23 per week. Those renting three-bedroom homes in Conwy, Denbighshire, Ceredigion, Vale of Glamorgan, Ynys Mon, Newport, Cardiff and Bridgend would lose between £10 and £16 a week.
