The Government is taking necessary steps to manage Housing Benefit costs and are implementing all Local Authority Housing Allowance measures announced in the emergency Budget in June 2010.
To avoid families being disrupted twice, first by the Caps in April 2011 and then by the reduction in Local Housing Allowance to the 30th percentile in October 2011, they will now both come into force in April 2011 for new customers.
However, existing customers will be exempt for up to 9 months from the date their claim is reviewed by their local authority. This will allow them time to adjust to any reduction in Housing Benefit entitlement and in practice means many existing customers will not be affected until after January 2012.
Ministers have also announced today a further £50 million has been allocated over the Spending Review period to support these measures, such as helping local authorities to negotiate lower rents and helping those that do need to move.
In addition, from April 2011, claimants who meet the criteria will immediately become entitled to an additional bedroom space for a non residential carer.
Minister for Welfare Reform, Lord Freud said:
"We are looking to private landlords to respond to the need for lower rents and in return we are prepared to permit direct payments from the state.
"This incentive will bring an overall downward pressure on rents in the private sector. As these rents come down, more properties will become available to claimants and landlords will have certainty that their income will be protected."
However, Ministers are clear this is likely to be a temporary agreement to provide an incentive to landlords to lower their rents and is by no means a return to direct payments being made to landlords as a matter of course.
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