Tighter backdating rules will push more people into poverty

23rd May 2008

Some of the most vulnerable people could end up facing cuts to backdating benefits if the government presses ahead with short-sighted plans to cut housing benefit and pension credit entitlement, Citizens Advice warned today.

If the plans go ahead in October the time limit for backdating housing benefit claims will be slashed from one year ‘with good cause’ to only three months. Pension credit will be also cut from one year to three months.

The proposed cuts also appear completely at odds with government efforts to prevent homelessness. Similar proposals were ditched in 2000 following widespread protests and a highly critical report from Parliament’s own Social Security Advisory Committee.

Citizens Advice warns that being able to backdate housing benefit up to 12 months is vital to prevent eviction and homelessness by enabling tenants to pay off rent arrears which are often caused in the first place by problems with a housing benefit claim.  Because claimants must show ‘good cause’ for not having made their claim earlier, backdating is targeted only on the most vulnerable claimants who most need personal support to help them cope, for example those with serious mental health problems.

Being able to backdate benefit for up to a year is also a valuable tool in increasing housing benefit take up, which official estimates put at only 50% of people in work who are eligible.  It ensures that people get money they were always entitled to but whose vulnerability prevented them getting a claim in earlier.

The Government wishes to reduce backdating at time when benefit take up is a challenge. Additionally with the highly unpopular abolition of the 10p tax rate this is more bad news for those on low incomes.

Citizens Advice Chief Executive Derek Alcorn said:

“We think that these cuts are a false economy, the housing benefit backdating provisions are a key tool in delivering the government’s agenda to prevent homelessness and as such they are highly cost effective. Any saving to the housing benefit budget is likely to be far outweighed by the much greater costs of homelessness.

“The government accepted that these cuts were wrong after first proposing them back in 2000. They withdrew them then and it is not too late to withdraw them again. We would urge them to recognise that backdating is an absolutely vital way of preventing homelessness.”

Cases

• A Tyrone client was able to obtain £3,400 in backdated pension credit that she was entitled to and had not been claiming. The client was entitled to over £80 per week based on her income which she had not been aware she should be receiving.
• Another couple living in a rural area in Northern Ireland missed out on £10,000 pension credit and housing benefit and were able to get these benefits backdated due to the existing backdating rules.