Potential conflict emerges over use of housing benefit

Recent test cases have thrown up a potential problem for councils that use housing benefit to support people in the community, writes Gary Vaux

All the attention seems to be focused on the “big issues” in welfare reform, such as the introduction of universal credit or transformation of disability living allowance. But we ought not lose sight of what the current benefit system can do to help or hinder work in social care.

For example, recent test cases involving housing benefit have thrown up a potential problem for councils that use it to support people in the community.

The problem stems from a decision involving a severely disabled claimant who lives in a house rented from her parents. Without the rental income the parents could not afford the mortgage on the property. The tenancy agreement was signed by the father as landlord, but in the space for the claimant’s signature it is stated that the claimant “is profoundly disabled and cannot communicate at all”.

The claimant was not, and was incapable of being, a party to any agreement.

The Upper Tribunal stated: “The claimant has no knowledge or understanding of any purported basis on which she is staying at her homeI conclude that she had no liability to pay rent by reason of a document to which she was not a party and of which she had no knowledge or means of knowledge.”

There is no liability to pay rent and therefore no access to housing benefit.

This decision has implications for any social services department that, directly or indirectly, provides rented accommodation for people who are not capable of understanding what a contract or tenancy is. Unless someone has specific authority to act on their behalf in setting up the tenancy agreement, housing benefit could be refused.

In another case, the Upper Tribunal ruled that a 20-year-old lone parent’s housing benefit could be restricted to below her rent for the hostel where she was living. This was despite the fact that the hostel was classed as “exempt accommodation” for housing benefit purposes and not subject to the usual rent restriction rules. However, rent restrictions can be applied if it is “reasonable” for people to move and suitable alternative accommodation exists.

In assessing reasonableness, only two factors may be taken into account. These are a claimant’s prospects of retaining employment and the effect on a child’s education – neither of which applied in this case, so housing benefit could legitimately be restricted.

But it’s not all bad news. In a third Upper Tribunal decision, it was decided that a home shared by four people with learning disabilities could count as sheltered accommodation, which meant that the cost of fuel and cleaning of the communal rooms could be met by housing benefit.

With the government recently launching consultation on funding supported accommodation, it’s more important than ever that social care and housing providers work together to maximise their revenue but also minimise the impact on those who live in that form of housing.

Gary Vaux is head of money advice, Hertfordshire Council

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