BHT Sussex has launched a campaign to fix an anomaly in the benefits system which results in financial disadvantage to homeless hostel residents who are working. This is a national problem affecting both individuals and the wider economy.
At the heart of this issue is the difference between how Housing Benefit and Universal Credit calculate earnings. Hostel residents claim Housing Benefit for help with their rent, unlike people living in other accommodation who claim Universal Credit for this. This means that, once they earn a certain amount of money, those living in hostels end up financially worse off compared to those living in other types of accommodation. This is clearly unfair.
The BHT Sussex project that most clearly demonstrates the impact of this issue on our clients is our Accommodation for Work Project. This Brighton-based project, funded by the National Lottery Community Fund, offers temporary shared accommodation and support for people who are homeless to enter or re-enter employment and training.
Over the past year 72% of people who have accessed the project have found paid work, and three quarters of them were affected by this benefits anomaly, ending up worse off when they increased their working hours, simply because they were living in a homeless hostel. Those effected were working in all sorts of different roles, including as support workers, dental nurses, baristas, chefs, electricians and construction workers.
The Accommodation for Work Project has worked closely with Brighton and Hove Council’s Housing Benefit department to use Discretionary Housing Payments to prevent project residents from being financially worse off when they are working. However, as this is only a discretionary payment, this innovative work at the local level is not a solution to this national problem.
John was homeless before coming to live at the Accommodation for Work project and worked variable hours as a food courier. For him work was a positive thread in his life, keeping him going through the difficult circumstances of being homeless, so it was important to him that he was able to continue to work while at the project. As he was on a low income, he was eligible for help towards his housing costs, but as he was living in a hostel, he had to claim Housing Benefit and not Universal Credit for help with this rent. This meant that once his earnings went over a certain threshold, he was financially disadvantaged. Luckily his Support Worker was able to secure Discretionary Housing Payments to make up the difference.
“I didn’t realise I would be worse off in work because I live in a hostel… without the extra payments I would have been £900 worse off than if I was living in my own flat! “
What is BHT Sussex doing about it?
We are pressing the Government to end this unfairness in the benefits system, and we have been lobbying MPs to ask for a change in the way earnings are calculated by Housing Benefit to match how earnings are calculated by Universal Credit.
In March we wrote to all Sussex MPs outlining our campaign and asking for cross party support on this issue. We have had a promising response so far, with MPs such as Caroline Ansall (Conservative MP for Eastbourne), Lloyd Russell-Moyle (Labour MP for Brighton, Kemptown), Caroline Lucas (Green MP for Brighton, Pavilion), and Sir Peter Bottomley (Conservative MP for Worthing West) raising our concerns at various levels of government, for example with Parliamentary Questions and letters to the Department for Work and Pensions (DWP). Mims Davies, Minister for Social Mobility, Youth and Progression, has been responsive to these and dialogue between BHT Sussex, various MPs and the DWP is ongoing.
The DWP has expressed interest in receiving more evidence about the impact this benefits anomaly has on people, to assess what the impact of addressing it would be. We would be really interested in hearing from any organisation whose clients are affected by this, so we can add your voice to ours and ultimately fix this unfairness in the benefits system so that work can pay for everyone. Please email email@example.com if you would like to get involved.