Fears of shortfall in social housing rent in the North

Some of the worst-off social housing tenants will have to pay shortfalls of up to quarter of their rent if fresh welfare proposals are introduced, the Federation of Northern Ireland Housing Associations warned.

Huge hardships face those relying on benefits if a “bedroom tax” inspired by Westminster is brought into the North, the organisation added.

A penalty could be applied to payments for tenants who occupy more bedrooms than they need to encourage them to move into smaller properties under draft legislation.

It is part of the Welfare Reform Bill to be considered in the Assembly on Tuesday – although Sinn Féin has called for it to be deferred because if its impact on the most vulnerable.

Cameron Watt, chief executive of the Federation, said: “We have great fears that the bedroom tax is going to hugely hurt social tenants in Northern Ireland.”

He added: “Social tenants in Northern Ireland will be disproportionately affected by this policy because in Northern Ireland the majority of social housing stock is family-sized accommodation and there is a real shortage of one and two bedroom social homes.”

Key features of the Welfare Reform Bill include a universal credit to cover a range of benefits, a personal independence payment reassessed every three years to replace Disability Living Allowance and housing benefit reforms.

At present, money comes from Westminster via the Department for Social Development (DSD) to housing associations. DSD is proposing withholding some of the money paid on behalf of social housing tenants from the associations and Housing Executive, with a knock on effect on tenants.

Mr Watt said huge numbers of tenants with major shortfalls in their benefits will have to find quite significant sums of money, up to 25% of their rent each week, from very limited benefits.

“It is going to cause huge hardship for tenants but it will also cause major problems for landlords (like the Housing Executive and housing associations) who will face a big increase in arrears affecting their ability to build new social housing,” he added.

He said 21,000 people are in severe housing need in Northern Ireland and the Programme for Government pledges to build 8,000 new social and affordable homes by 2015.

The aim of the change is to try to make the housing market match the cost of housing benefit by ensuring optimal use of space.

There will be also a housing benefit cap of £26,000 (€32,000)but that is only expected to affect 1% of the population claiming the payment.

The welfare changes also cover job seekers, introduced because the number of people on some long-term benefits has been quite static, regardless of whether there are more jobs available.

The hope of government officials is that by the time all the changes are introduced in three or four years’ time, the economic cycle will have seen an improvement in unemployment levels and the number of jobs being created.

The aim of the benefits shake-up is to help people back to work by reducing the benefits paid gradually, so claimants do not lose money by taking a relatively low-paid job and losing all their allowances.

The cost of welfare in Northern Ireland is £5.1bn (€6.3bn) annually, expected to rise to £6.7bn (€8.2bn) by 2019.

DUP Social Development Minister Nelson McCausland has expressed concern about elements of reforms pursued by Work and Pensions Secretary Iain Duncan Smith and wants to include Northern Irish features like the relatively large number of people on Disability Living Allowance.

The Welfare Reform Bill is expected to overhaul the Social Fund, which allows people in need to buy essential items through government grants and loans. It is being abolished in Great Britain but replaced by £30m (€37m) a year, ringfenced by the Executive, to prevent people from visiting loan sharks.

Payments like the winter fuel allowance and cold weather funds are being kept.

A Personal Independence Payment replacing the DLA will assess recipients every three years and will involve around 118,000 people in Northern Ireland. It is not means-tested and aims to help the disabled meet the extra cost of living, with items like wheelchairs and specialist equipment.

The new payments should apply to fresh claimants from next June and reviews start at the end of next year, if the timetable is not disrupted after Sinn Féin’s intervention.

Officials hope to reduce the cost of administering benefits; there are 30 at present. It is hoped new computer systems could automate some of the work.

There will also be changes to the Employment and Support Allowance which helps many people back to work. Most on it are ill and expected to move off it within a year. The changes do not affect those with long-term debilitating conditions like cancer, but the rest will be expected to seek work.

The Bill will have its second stage on Tuesday before it is considered by Assembly committees.