Housing Benefit: Newcastle upon Tyne

Question

It is estimated that around 500 households in Newcastle Upon Tyne will be affected by the lower benefit cap in 2016/17. The annual benefit reduction from the lower cap is estimated to be around £1.3 million in 2016/17 if the cap was in place for the full financial year, however actual savings will be much lower in view of the lower cap only applying to the latter part of the year.

Notes:

1. Estimates assume no behavioural responses - any behavioural responses to the lower cap, such as claimants moving into employment, would cause the number of households affected to reduce.
2. The number of capped households has been rounded to the nearest 100 households
3. Annual benefit reduction has been rounded to the nearest £100,000 per year.
4. Modelling for this assessment was conducted using administrative records held by the Department for Work and Pensions containing amounts of benefit paid (including Child Benefit, as paid by HM Revenue and Customs) and indicators of receipt of Working Tax Credit and exemption benefits such as Disability Living Allowance. This enables the separation of households into those excluded from the cap, and those which will be subject to it and by how much. The administrative records relate to November 2015, but have been adjusted to reflect the future benefit regime.

The benefit cap will be lowered from 7th November from £26,000 to £20,000, except in London where it will be lowered to £23,000 (a lower cap applies to single adult households). To help ensure Local Authorities are able to protect the most vulnerable Housing Benefit claimants and to support households adjusting to our welfare reforms, the Government will provide £870m funding for Discretionary Housing Payments over the next 5 years from 2016/17.