Homelessness charity BHT Sussex is pressing the government to end an unfairness in the benefits system which results in homeless hostel residents being financially worse off when they start working.
This is a national problem affecting both individuals and the economy as a whole.
The BHT Sussex Accommodation for Work Project, funded by the National Lottery Community Fund, offers temporary accommodation and support for people who are homeless to enter employment and training.
Over the past year 72 per cent of people who have accessed the project have found paid work and three quarters of them were affected by this benefits anomaly.
They ended up worse off when they increased their working hours simply because they were living in a homeless hostel.
People living in hostels claim housing benefit for help with their rent, unlike people living in other accommodation who claim universal credit for this.
This difference does not financially affect hostel residents who are not working or who are earning under £608 a month (or under £482 a month if under 25).
However, as soon as someone earns over that threshold, they are immediately financially disadvantaged.
BHT Sussex is recommending that housing benefit adopts the same treatment of income as universal credit so that hostel residents are treated the same as other working benefit claimants.
We call on MPs and parliamentary groups to support this change.
The government’s latest budget has an explicit focus on getting more people back to work but people living in homeless hostels and temporary accommodation can still be penalised for doing so.
This makes no sense. This is a national problem and can only be properly addressed by a change in national policy and benefit rules.
BHT Sussex has written to all Sussex MPs outlining their campaign and asking for cross-party support on the issue.
MPs such as Caroline Ansell, the Conservative MP for Eastbourne, Lloyd Russell-Moyle, the Labour MP for Brighton Kemptown, and Caroline Lucas, the Green MP for Brighton Pavilion.
They are now raising their concerns at various levels of government, for example, with parliamentary questions and letters to the Department for Work and Pensions.
Lloyd Russell-Moyle said: “It is disheartening and frustrating that the current benefits system can put homeless people living in hostels in a disadvantageous position when they find employment – it is utterly counter-intuitive and counter-productive.
“The issue with the difference between how housing benefit and universal credit calculate earnings is alarming and needs to be addressed urgently.”
To find out more about this BHT Sussex campaign and all the latest developments, visit www.bht.org.uk.
David Chaffey is the chief executive of BHT Sussex.
Well said David Chaffey. This is a form of discrimination that needs to end. Not least because it is especially difficult to work or study in hostel accommodation.
I lived in a hostel in Brighton for most of my teen years, and the system does not support you to improve your situation because, as this article states, the financial support cuts off suddenly as you earn.
It is the equivalent of a modern day Sisyphus, doomed to an eternity of purgatory.
That must change.
Or do what me and many others are doing and lobby the council to build many more in-house temporary accommodation / emergency accommodation unites and keep them to as lowest rents as possible, ideally social rents. This way we can ensure rents are paid to the council and its fair to charge a social or living wage rent. They would also better better managed than the alternatives. More council and social housing so again everyone including front line workers can access the benefits. as they were meant to be.
Sounds like Community Land Trusts would be an interesting option to explore, Daniel.
I would have liked to have understood how the system disadvantages people and by how much once they earn over the £608 per month and £482 per month thresholds as mentioned in the article. I feel I have only been given half the information of how the system works.
A reasonable request Nina.
As you earn over the threshold, that benefit entitlement is proportionally removed, so you have a situation where you’re earning the same money for working as you would be for not until you’re earning substantially more.
This has infamously disincentivised people from entering work, particularly when the wage is not substantial.
There’s a few ideas around how you’d solve this, such as higher thresholds, universal basic incomes, slower tapering, but it’s an ongoing discussion and a big P issue realistically, rather than a local one.
The thresholds at £608 and £482 per month do seem outrageously low. Surely it would be more advantageous for those stuck in this situation and for the economy locally and nationally if they were raised, so that these workers are financially secure for a period until they are able to find better paid work or promotions.
I’ve only had one experience of the benefits system many moons ago when I was abruptly made redundant from my first graduate job in London with 2 weeks pay. By the time I had received my first benefit – 3 months after being made unemployed – I had found another full-time job. In the interim however, I had accrued substantial personal debt in order to pay my rent and bills.
The system is a joke.