FAQs - David Cameron’s proposal to cut housing benefit for young people
What has David Cameron proposed?
In a speech on 24 June 2012, David Cameron said that he was
looking to reduce the amount of money the government spends on
welfare benefits. He posed the question as to whether housing
benefit for under-25s should be stopped completely, suggesting this
would both save money and encourage young people not to leave home
But didn't he say that young people who need
housing benefit will still get it?
Neither the Prime Minister nor any other Conservative
politicians have given much detail on the policy. Mr Cameron has
suggested that some vulnerable groups, such as "those leaving
foster care" might still be able to receive housing benefit.
However, as discussed below, Centrepoint believes it will be
extremely difficult to effectively determine which young people
need support. A general commitment that vulnerable groups will be
protected is therefore only of very limited comfort at this
Is this government policy?
Not at the moment. Several Liberal Democrat MPs have opposed the
Prime Minister's idea, making the introduction of any changes
unlikely at the present time. However, the PM's comments show that
it is clearly being looked at as a policy for the future.
Why does Centrepoint disagree with the Prime
Centrepoint supports redirecting the money currently spent on
housing benefit to more effective use. However, our experience of
working with homeless young people suggests that cutting housing
benefit for under 25s would have significant negative
- More young people would become homeless - even if the
government wrote a long list of the groups of young people who
could still access housing benefit, many young people would
inevitably slip through the safety net. Homeless young people
do not fall into neat categories and we think it would be extremely
difficult and costly to establish a system based on exempting
- It would trap some young people out of work - housing benefit
is an in-work as well as an out-of-work benefit. This means that
young people who move away from home and find a low-paid job might
be forced to leave their job to move back home if housing benefit
is no longer available to them.
- It is mostly families with young children that would be
affected - more than half of the young people who receive housing
benefit have young families. This makes it even more difficult for
young people to move home and risks penalising children for their
parents' financial circumstances.
Shouldn't the government be getting parents to
take more responsibility?
Centrepoint is strongly supportive of efforts to try to ensure
that, where possible, young people remain with their families.
However, many of the young people that arrive at Centrepoint have
become homeless due to domestic violence, abuse or other forms of
family breakdown. Where appropriate, we support young people to
move back home with their parents, but ultimately lots of young
people do not have this opportunity.
Doesn't housing benefit give young people who
receive it housing options that other under 25s don't have?
Young people who rent privately are only entitled to the lower,
'shared accommodation rate' of housing benefit, which limits them
to a room in a shared house in the cheapest 30% of the local
private rental market. In practice however, the fact that many
landlords will not let their properties to housing benefit
claimants means that many young people's options are even narrower
than this - with many pushed into poor quality accommodation on the
margins of the private rental market.
Can we afford for young people to get housing
It is true that the welfare benefits bill is high but this
largely reflects the scarcity of affordable homes in many areas,
notably major cities and London and the south-east of
England. This means that housing is extremely expensive
relative to most people's wages. Furthermore, while Mr Cameron is
right to highlight the high level of government expenditure on
welfare benefits, almost half is spent on pensions and other
benefits for elderly people. By contrast, for every £10 spent on
welfare less than £1.50 goes on housing benefit.
It's also important to recognise that cutting housing benefit
could lead to huge additional costs for the government due to the
knock on impact on other services. Recent research suggests
that the cost of someone becoming homeless can amount to £26,000 a
year when the effects of things such as poor health and
unemployment are factored in