Restoring Local Housing Allowance rates helped many move on from homelessness and into safe homes in the pandemic. We need to adapt the benefit cap so it does the same.

Saskia Neibig, Senior Policy and Parliamentary Affairs Officer

In March, everyone at Crisis was thrilled to hear that the Government would be restoring Local Housing Allowance (LHA) to cover the cheapest third of rents for 12 months in response to the pandemic. For years we, along with housing and homelessness organisations, had made the case for why LHA had to cover the cost of renting to prevent homelessness.

Almost immediately, we saw the direct benefit of this investment. It’s been incredibly rewarding to hear about people finally being able to rent a home of their own after being trapped in temporary accommodation, for years in some cases. In Edinburgh, one particularly moving account came from a man who had been living in temporary B&B accommodation. Due to his severe emphysema and depression, he had been worried about the threat of coronavirus and did his best to self-isolate in his room, but with no cooking or washing facilities or even a kettle, B&B staff had to leave food at his door. He had no internet access so was cut off from the world, facing being trapped “in a room staring at 4 walls for the next 12 weeks”. 

Crisis worked with the council and a letting agent to negotiate a tenancy for him in his own self-contained property. Due to the increase in LHA rates, he was able to afford a property that he could only have dreamed of before. He wrote to the team to say:

“now to be in my own flat has boosted my health - it is clean, fresh, I can walk about, do my own cooking - it takes my mind off the Covid- 19, which I’m now not thinking about it all the time. I would like to thank all staff from crisis Scotland for what they have done for me over the past months keep up the good work going forward”.

This is by no means a stand-alone case. Across the country the number of homes that were affordable to rent at LHA rates increased, meaning more and more people were able to find affordable homes, finally breaking free from the policy trap that had been keeping people from finding a home for too long.

Although we are pleased to see the investment in LHA, we know that the benefit cap is unintentionally limiting this money from reaching families and individuals who need it most. The benefit cap limits the amount that people can receive in benefit payments, meaning that in two thirds of local areas, a small family would see their benefits cut.[1] Most people get a nine-month grace period from the benefit cap when they first apply for Universal Credit, which gives them time to get back on their feet, but more protection is needed for people facing eviction during the economic storm brought on by the pandemic. With a little amendment, the Government could target this support at people struggling with financial pressures and facing the very real prospect of losing their homes.

Extending the benefit cap grace period to 12 months would protect more people during this economic downturn, and by ensuring it covers people who are at risk of homelessness, it would help more people to get back on their feet when a stable roof over their head is most needed.

Crisis is also calling for people sleeping rough or in emergency accommodation to be exempt from the cap. This will help the Westminster Government to better support some of the thousands of people helped into emergency accommodation to find secure and affordable homes. Introducing these exemptions to the benefit cap will enable the Government to continue the incredible progress made through the Everyone In scheme towards achieving its commitment to ending rough sleeping in England.

This autumn, the Government is conducting a Spending Review, during which it sets spending priorities and budgets for the next few years. Today, we’re calling on our campaigners to once again raise their voices and show the Government that preventing homelessness is a priority, and that a fair welfare system is a key part of delivering that in the aftermath of the pandemic. Show your support by tweeting to raise awareness of how the benefit cap pushes people into homelessness.

We’d also love to hear from you if you’ve been affected by the benefit cap, to help make the case of how the benefit cap is placing families at risk of homelessness. You can use this link or email us on stories@crisis.org.uk

Together, we can ensure the welfare system works for everyone by giving financial support to people when they need it most. 


For detail of the policy proposals, see our policy briefing document

[1] Housing Outlook Quarter 2 2020 (9 April 2020) Resolution Foundation  The Resolution Foundation has found that a couple living with two children in a three-bedroom home will run up against the benefit cap in 107 out of 152 local areas in England and Wales.

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