Wirral Council's housing benefit fund could run dry as tenants ask for help with 'bedroom tax' (From Wirral Globe)
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Wirral Council's housing benefit fund could run dry as tenants ask for help with 'bedroom tax'
MORE than 800 tenants have applied to Wirral Council for financial support after becoming unable to pay their rent following the introduction of so-called “bedroom tax.”
Now councillors are being warned a special fund set up to help struggling tenants could run dry – and that cash from other budgets might have to be diverted to prevent families suffering hardships.
The Government’s controversial welfare shake-up means people claiming housing benefit lose a percentage of their money if their homes are deemed to be “under occupied.”
The Government has allocated a limited cash fund to allow councils to make awards in the form of “Discretionary Housing Payments” for people on housing benefit who have a shortfall in the amount of rent they need to pay to their landlord.
But so many families have fallen into difficulties in Wirral that the authority is being alerted that the number of eligible applications is in danger of exceeding the allocated grant and “a form of limitation will need to be utilised.”
Unless the council diverts resources from other budgets, it will have to refuse applications once the grant has been spent “which may cause hardship to claimants.”
A report to this week’s meeting of the council's ruling cabinet says that at the start of the financial year, Wirral had 4,228 households classed to be “under occupying” and who have had their housing benefit cut.
Of these, 901 were subject to 25% reduction – an average £22 per week – for having two or more “spare” rooms. The rest were 14% reductions for having one spare bedroom, an average weekly reduction of £12.
In the 12 months to April 2013, the council spent £464,830 on 1,210 discretionary housing benefit awards.
In the six months from April, the benefits service has received more than 800 claims - over half of them as a direct result of the change in legislation.
By September 1, £292,433 has been paid or committed to 600 applicants with a further 200-plus awaiting processing.
Further applications for financial help are expected once recovery action is taken by private landlords.
Councillors will be told that the number of applications for the scheme could escalate as other welfare reforms are “rolled out.”
Benefit cap regulations begin in July and may also see these claimants looking to access the fund to assist their shortfall in rent.
The impact could add to the “already acknowledged overall increase in evictions and homelessness.”
When they meet on Thursday, cabinet members will be asked for their views on the best way forward.
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