Pensioners may be exempt from direct-benefit scheme

By Chloe Stothart

The government is considering exempting pensioners from its roll-out of direct housing benefit payments to social housing tenants, Housing Today can reveal.

As pensioners make up half of all housing benefit claimants in the social sector, the proposal would represent a large concession to social landlords who fear that the move – known as the local housing allowance – would result in spiralling rent arrears.

Under the scheme, where benefit is partly calculated according the number of people in the household, campaigners feared that pensioners living in under-occupied houses after their children moved away would be forced to move to smaller properties.

The government believes allowing tenants to pay their rent and letting them know how much benefit they will receive in advance will boost labour mobility by enabling them to move house more easily. As pensioners would not be targeted by the labour mobility proposals, they are not a prime group for the local housing allowance changes.

At the National Housing Federation conference in Birmingham on Friday, Paul Howarth, head of the housing support division at the Department for Work and Pensions, said: “The issue of under-occupation is a real one and better use of housing stock would be an objective, but if this is about making pensioners who have been in their home for a long time make difficult decisions, I am not sure that is the case.

“One option would be to exempt all pensioners from this. My concern would be working age people and one option would be to exempt pensioners altogether.”

Jules Bickers, assistant director of customer services at London-based Circle 33, said: “Not one person in our pilot [of direct payment of benefits to tenants] was a pensioner and still arrears increased.

“It took about 12 to 14 months to come back into line with normal payment times, which suggests it takes people who’ve not been used to administering benefits themselves this much time to become comfortable with the idea.

“It affects people across the board.”

The government’s first evaluation of private sector pilots will be published this winter. The scheme could be tested in the social housing sector by 2006 and rolled out nationally in the private housing sector by 2008.

London & Quadrant Housing Trust, which tested paying benefit to tenants in south Thames, is likely to evict some of those who did not pay the rent.

Mike Donaldson, L&Q’s director of corporate strategy and communications, said the courts had approved eviction of 10% of families in the piloted area.

“We are evicting more people and L&Q doesn’t normally evict many people,” he said. In the north Thames region, where the scheme was not tested, there were arrears of 2.5%.