Good morning

I’m sure you will have heard, by now, the Chancellor presented his Autumn Statement 2023 in Parliament last week, and, amongst other things, confirmed:

*Universal Credit and other “working age” benefits (e.g., JSA, Income Support) will be uprated in April 2024 by 6.7%, in line with September’s inflation figure.

*State Pensions will be uprated in April 2024 by 8.5%, in line with its “Triple-lock” pledge of using annual earnings growth for May to July 2023.

*Most importantly for private landlords, Local Housing Allowance (LHA), which has been frozen since 2020, will be increased in line with the 30th percentile of local market rents, from April 2024. The new rates need Parliamentary approval so we won’t know exact figures until New Year

Whilst all these announcements are most welcome, not everyone will benefit, as the Benefits Cap has NOT been increased, so will remain at current levels.

Currently, there are around 85,000 households affected by the cap in GB. The changes announced by the Chancellor e.g., the increase of 6.7% to “working age” benefits, like Universal Credit, will not provide any additional income to those affected. Neither will the increase in the LHA rate be beneficial to these same households. In effect, they will have their benefits frozen at current levels, making it even more difficult for them to pay ever-increasing bills, including their rental charges. Where there’s already a gap, between what they receive in “housing costs” and their contractual rent, this, almost certainly, will be contributing to rent arrears, a breach of tenancy, and the likelihood of repossession action.

For example, in South London, a 35-year-old, single tenant, currently has their “housing costs element” restricted to a maximum LHA rate of £1147 pcm. If you add to that, their “Standard Personal Allowance” of £369 pcm, designed to pay thier bills, their overall “potential” award should be £1516. However, in this part of London, there is an overall Benefits Cap of £1229 applied, so their UC award is likely to be restricted to the cap level, leaving them £287 pcm short of the gross “entitlement” figure. Plus, if their landlord is charging a rent above the LHA rate, which is quite common, the gap will be even greater.

The Benefits Cap is also an ever-increasing factor in relation to the frequency at which Direct Payments are being refused, particularly in Greater London. Most landlords will not be aware of this, as DWP refuses to explain its grounds for refusing claims for redirection. However, DWP confirmed to me last year, that where the cap applies – “APAs MUST be stopped” – and “housing costs” redirected to the tenant, even where, the tenant has already misused these funds, accruing arrears, putting their tenancy in jeopardy. In my view, DWP is likely to be acting illegally, as the decision to redirect payments is a “discretionay” matter and should be considered on the individual merits of each case, not by introducing hard & fast policies, which effectively fetter staffs’ discretion.

It must be said, not everyone is subject to the Benefits Cap, exceptions do apply. You can find details here Better still, have your tenant assessed by a welfare rights or financial inclusion officer, if you’re fortunate enough to have these excellent services in your area. DWP often overlook the exceptions, apply the cap wrongly, causing unnecessary hardship. Where this is discovered, the tenant’s case should be revised to correct the error, and include a full refund of any underpaid benefit.

If you need any further information or clarification on this or any other rlated topic, please contact or phone 07733 080 389.


Bill Irvine

UC Advice & Advocacy Ltd

Telephone 01698 424301 or 07733 080 389