During the prime minster’s speech today he castigated the unfair system whereby families were punished if their child got a job:
“If a family living on benefits wants their adult child to stay living at home they are actually penalised – as soon as that child does the right thing and goes out to work”.
The situation does exist. Eligible rent is deducted when other adults who are working live in the same house as the claimants. But who is to blame?
The penalty was frozen in 1999, according to Tim Leunig, chief economist at Lib Dem think tank Centre Forum. The current government unfroze it – increasing it by 27 per cent in 2011. There will be another 27 per cent increase in 2013, as the Chartered Institute of Housing points out:
“Deductions from the claimant’s eligible rent where other adults live with the claimant but are not part their family for benefit purposes (typically the claimant’s own adult children who are either working or claiming in their own right) are set to increase dramatically. The level of deductions has been frozen since 1999. These freezes are to be reversed – so there will be a 27% increase in April 2011 and increases of a similar size in April 2012 and April 2013. Thereafter rates will increase annually in line with prices.”
Meanwhile Leunig questions how the ban on housing benefit for under-25s will work out:
“Does this mean all parents have a legal obligation to house their children until they are 25? What sanctions will be placed on parents who refuse to do this? Which parents have a legal obligation to house a married couple aged under 25 in low income work? Do the young couple have to split up and live with their own parents? Can they choose? Do they have to alternate?”
Jim Pickard
Kiran Stacey