Statement on the shared rate for under 35’s being brought forward

Work and Pensions

Housing Benefit Shared Accommodation Rate

The Minister of State, Department for Work and Pensions (Steve Webb): My hon. Friend, the Under-Secretary of State, responsible for welfare reform, Lord Freud of Eastry, has made the following statement.

 The Government announced in last October’s comprehensive spending review that it would extend the housing benefit shared accommodation rate to people under the age of 35 from 2012. This rate currently applies to people under the age of 25 and reflects the costs of renting non-self-contained accommodation in the private sector where the tenant has exclusive use of a bedroom but shares other facilities such as a bathroom.

 We intend to bring forward these changes by three months so that they start to take effect from January 2012.

 The local housing allowance reforms, to be introduced from this April, cap the level of payments to a maximum of a four bedroom rate and reduce local housing allowance rates so that they are based on the 30th percentile of rents rather than the median. They also introduce overall caps on the rate of local housing allowance for one, two, three and four-bedroom accommodation. Existing customers will be given up to nine months transitional protection from these reforms starting from the anniversary date of their claim.

 By introducing the shared accommodation rate changes slightly earlier, this will bring the timing of the shared accommodation rate change more closely into line with the local housing allowance reforms for existing customers. It will ensure that single people aged 25 to 34 reaching the end of their transitional protection period will experience at that point a single reduction in their housing benefit, rather than two separate reductions.

 That is why we have decided to bring forward the shared accommodation rate changes. We will publicise these proposed changes through appropriate channels to make sure that those affected are aware of them in advance.