Ministers plan to extend an exemption for supported housing from the ‘Local Housing Allowance cap’ as they seek a long-term solution to the problem. A one-year exemption was announced in March but this will be extended further.
The DWP is aiming to shore up housing association confidence in this market and unfreeze stalled developments.
From April 2018, housing benefit in social housing tenancies that begin in 2016 will be capped at private sector – Local Housing Allowance (LHA) – rates.
Now, following further fierce 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.
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.