A recent ruling by the High Court that the Government’s policy of imposing a benefit cap on lone parents with children under the age of two is unlawful, discriminatory and has caused “real damage” to the families affected shows the need for further welfare reforms, insists the Residential Landlords Association (RLA).
The benefit cap, which limits the total amount households can receive in benefits to £20,000 a year, or £23,000 in Greater London, was created as an “incentive” to persuade unemployed people to move into work.
However, Mr. Justice Collins said in his judgment that the policy results in “real misery to no good purpose” on lone parents with very young children who were subject to the cap, despite there being no official requirement for them to find work.
Lone parents with children under two did not qualify for free childcare, so would find it difficult and often impossible to juggle working the minimum 16 hours per week required to evade the cap, while finding means to care for their children.
He said: “The evidence shows that the cap is capable of real damage to individuals such as the claimants. They are not work-shy, but find it, because of the care difficulties, impossible to comply with the work requirement.”
Most lone parents with children under two-years-old were not the sort of households the cap was intended to cover, and it was “obvious” that it would exacerbate poverty.
“Real misery is being caused to no good purpose,” he added.
The Department for Work and Pensions (DWP) has been given leave to appeal against the ruling. A spokesperson responded: “We are disappointed with the decision and intend to appeal. Work is the best way to raise living standards, and many parents with young children are employed.
“The benefit cap incentivises work, even if it’s part-time, as anyone eligible for working tax credits or the equivalent under Universal Credit is exempt. Even with the cap, lone parents can still receive benefits up to the equivalent salary of £25,000, or £29,000 in London, and we have made discretionary housing payments available to people who need extra help.”
Campaigners said they hoped the ruling would lead to the abolition of the benefit cap. Although the principle of a cap is popular with the public, critics have argued that the benefit cap is a powerful driver of poverty and destitution.
Official estimates published earlier this year show that 50,000 low-income families caring for around 126,000 children were at risk of serious financial hardship after being trapped by the lower benefit cap.
Commenting on the ruling by the High Court, the Policy Director of the RLA, David Smith, says: “We welcome the court’s decision, which will make landlords feel far more secure in renting property to such families.
“The RLA provided research in support of the case, which clearly shows the harm that the benefit cap is causing for many in accessing the rental market.”
However, he adds: “Whilst is it pleasing that the court has ruled in this way, we urge the Government to use it as an opportunity for wider reforms to the welfare system, to give greater confidence to both landlords and tenants that rents can and will be paid on time.”
We have put together a guide for landlords on letting to tenants in receipt of benefits: https://www.justlandlords.co.uk/news/a-guide-to-letting-to-dss-tenants/
Landlords should also remember that our Rent Guarantee Insurance is available to those who let to benefit tenants. This peace of mind cover protects your rental income against tenant rent default. Get an instant quote and cover online here: https://www.justlandlords.co.uk/rentguaranteeinsurance