Housing benefit reforms 'could waste millions' in disability costs

Changes in housing benefit payments affecting disabled people could cost the public purse millions of pounds in Wales, a housing association has said.

Wales & West Housing (WWH) said many disabled tenants may be forced to move because of the so-called "bedroom tax".

It said it could result in millions more being spent adapting properties.

The UK government said it had given Wales £7.9m for a discretionary fund tenants could apply for but WWH said that may not be enough to cover costs.

Meanwhile, Welsh government said it was providing a further £1.3m so local authorities could provide more help to those affected by the reforms.

WWH, which manages 9,500 properties, said it wanted disabled people to be exempt from the housing reforms.

It said Wales was on track to "waste" millions of pounds of public money otherwise.

The reforms affect working-age tenants on low incomes who receive housing benefit to help pay for social housing.

The UK government has cut housing benefit for those judged to have too many rooms for their needs, with the aim of encouraging them to move to smaller properties, claiming such tenants have enjoyed a "spare room subsidy".

Opponents have dubbed this benefit cut a "bedroom tax", claiming many people will lose money and fall into rent arrears because of a lack of smaller properties available to move to.

WWH looks after homes in a dozen Welsh council areas including Conwy, Wrexham, Powys, Swansea, Merthyr Tydfil and Cardiff.

It says of its 779 householders assessed as "under occupying" their homes that 74 or approximately 10% live in homes that have been adapted for disabled people at an average cost of £7,700.

And it estimates £575,000 will have been "wasted" on adapting those properties if the occupants have to move, and that a similar sum will be needed to make changes to their new, smaller home.

The study says almost half of the affected householders are now in rent arrears since the benefit reforms last April.

WWH said figures it had obtained from 21 of the 22 local authorities across Wales showed that about 35,000 households had been affected by the changes brought in last April.

The association goes on to say that if about 10% of those 35,000 homes had disabled householders - as is the case with their tenants - then there would be around 3,500 homes which may already have been adapted for disabled people at a total cost of £25m.

It said it could cost an extra £15m to adapt replacement smaller homes "even if such properties became available".

In a letter in response, Welfare Reform Minister Lord Freud said housing benefits would have risen to £25bn by 2015 without reform.

And he said affected residents could seek a discretionary housing payment from their local council, funded by the UK Treasury, although it was not meant to cover every financial shortfall as a result of the reform.

"Local decision makers are better placed to make informed judgements about relative priorities and needs and to target limited resources more effectively," he said.

"The measures will be monitored and evaluated over a two-year period from April."

WWH said the discretionary payments added another level of bureaucracy.

It has sent its findings to ministers, branding the system an "enormous waste of money and time".

Deputy chief executive Shayne Hembrow said: "Our research shows that the removal of the spare room subsidy from disabled people living in adapted properties in Wales makes no financial sense whatsoever.

"The cost of new adaptations wipes out the potential savings in housing benefit for many years.

"Wales is on track to waste at least £40m of public money as a result of the removal of this subsidy."

Welsh Housing Minister Carl Sargeant said: "The report just published by Wales & West Housing Association provides further evidence to support my call for disabled tenants living in homes that have been adapted to meet their needs, along with foster carers and army personnel, to be exempt from these welfare reforms."