DWP proposes housing benefit cap following 'luxury rental' claims

The Department for Work and Pensions (DWP) has set out measures that could be used to limit the rents that housing benefit will pay so that people are not placed in housing “other working households could not afford.”

The DWP's White Paper has been released a month after it was revealed a family receiving benefits were living in a £1.8million property off Edgeware Road, at a cost to the taxpayer of £1,600 a week.

The reforms also seek remove the payment of £15 a week for families if they rent a home below the LHA’s maximum for their area.

DWP Secretary Yvette Cooper, said scrapping high rent payments will encourage people to move off of benefits and get back into work. “We will also guarantee that people will be better off in a job than on benefits," Cooper said.

According to the DWP, the new scheme incentivises work by offering a Transition into Work payment that maintains the benefit at the out of work rate for a set period of time, making the transition smoother and simpler.

A spokesperson from the DWP said although it is too early to evaluate the impact of the announcement on local authorities, all interest groups including councils are encouraged to respond to the Paper.

For more information please visit: www.dwp.gov.uk/buildingbritainsrecovery