Ministers plan to extend an exemption for supported housing from the ‘Local Housing Allowance cap’ for now.
From April 2018, housing benefit in social housing tenancies that begin in 2016 will be capped at private sector – Local Housing Allowance (LHA) rates.
After supported housing providers warned that this will lead to the closure of schemes, a one-year exemption was announced in March. Following lobbying by housing associations, ministers plan to offer full exemption to supported housing units to protect them from the cut, which would run until a long-term solution is devised.
Ministers are working up plans for this solution. DWP wants to ensure schemes put on hold by the uncertainty can be unfrozen, as the longer exemption will encourage associations that the intention is not to slash supported housing funding. A DWP spokesperson said: “We will announce further detail in due course.”
The DWP had previously suggested boosted Discretionary Housing Payments may help pay for supported homes, but it is understood this is no longer being considered. It is unclear whether the exemption would be open-ended or for a fixed term.