Researchers: Peter Kemp, Annie Irvine and Kath Nice
Funder: Joseph Rowntree Foundation
Duration: September 2005 to September 2006
In November 2002 the Government announced proposals for a major reform of housing benefit (HB). HB for private tenants is to be replaced by a local housing allowance (LHA), which is currently being tested in a number of 'pathfinder' local authorities over a two-year period before being rolled out nationally. In due course the LHA was expected to be extended to include local authority and housing association tenants. The key feature of the LHA is that entitlement is no longer based on the tenant's rent. Instead, within each local market area there is a flat-rate allowance for all claimants, which varies only by household size and composition. However, most of the controversy about the reform has focused on the proposal to pay the LHA to claimants rather than landlords. The Government has argued that moving away from direct payments to landlords should increase personal responsibility and help bridge the gap between being out of work and taking a job. It also fits in with their objective of payment modernisation and financial inclusion. However, critics argue that, if HB is paid to the tenant instead of the landlord, it will be spent on other things rather than the rent. Arrears and hence evictions and homelessness will increase. Mortgage lenders are worried that higher rent arrears will reduce landlords' ability to service their loans. Despite these claims and counter-claims, there is relatively little research evidence on HB payment methods.
The aims of the research were to examine HB recipients' understanding, experiences and views of different payment methods (payment to the tenant versus payment to the landlord). It examined their wider household budgeting, their beliefs and behaviours about paying the rent (and not paying it), how they would budget for the rent if HB were to be paid to them and not the landlord, and their perceptions about the relative risks and benefits of moving into paid work under the two different payment regimes.
The project comprises a qualitative study of HB recipients. Semi-structured interviews were conducted with housing benefit recipients renting from local authorities, housing associations or private landlords.
The sample will be purposively selected to comprise three household types: families with children, single people under 25, and pensioners. The research was conducted in four localities, selected to represent different housing and labour markets and a geographical spread, including one with a relatively large black and minority ethnic population.
Publications and presentations
Living on a low income and using banks to pay bills, 2010
Nice, K. and Irvine, A., The Journal of Poverty and Social Justice, 18, 1, 53-67. 2007
Direct Payment of Housing Benefit: What do claimants think?, 2007
Irvine, A., Kemp, P. A. and Nice, K., Chartered Institute of Housing. Paying housing benefit to claimants, 2007
Irvine, A., Kemp, P. A. and Nice, K., Findings, Joseph Rowntree Foundation. 2006
Managing money in older age: are pensioners really as financially vulnerable as commentators suggest?
Irvine, A. and Nice, K., Challenging Myths - Researching Reality: The Role of Social Research, University of London, 6 December 2006. Promoting choice and responsibility? Claimant perspectives on the payment of housing benefit
Kemp, P. A., Nice, K. and Johnson, A., The State of Welfare: Past, Present and Future, 39th Social Policy Association Conference, University of Birmingham, 18 July 2006.
Inside housing, 10 May 2007. Claimants admit to money weakness