Housing Benefit Reform Next Steps

It is widely accepted that the housing benefit scheme is poorly structured in relation to the Government's social security and housing policy objectives, highly complex, poorly administered and confusing to claimants and therefore in need of major reform.;The Housing Policy Green Paper, published in 2000, acknowledged that housing benefit has serious deficiencies. Since then a number of modest but important modifications to the scheme have been introduced or are planned. However, New Labour included a commitment to more radical reform of housing benefit for private tenants in its 2001 election manifesto. Meanwhile, proposals for a second generation of tax credits to be introduced in 2003 have renewed concerns about their relationship with housing benefit for people in low paid employment. Based on previous studies of housing benefit reform sponsored by the Foundation and undertaken separately by the authors, this report focuses on two key issues: the rules which restrict the amount of rent that is taken into account when assessing housing benefit entitlement (referred to as "rent restrictions") and how they might be reformed; and the relationship between housing benefit and the new generation of tax credits. It also explores options for reforms to restructure and simplify the current housing benefit scheme.