The change that the government are proposing, is that those residents living in Social (council) housing and Housing associations properties earning more than £40,000 inside London and £30,000 per year, per two highest earners within one tenancy, will be forced onto the higher 80% of market rents payments system, even though they have existing tenancy agreements.
The income from this to local councils will go to the governments treasury debt to counter the Tory’s austerity debt, whereas income from this increase to housing associations will be kept for re-investment.
Currently this proposal exists within local councils but up to the earnings of £60.000 Gross per house hold, but on a discretionary basis. At the moment very few authorities have implemented this as its clearly unfair.
The government proposal to reduce this £60,000 cap to £40.000/£30000 will effect many low paid households, An example of this could be Two nurses living together earning £21.000 each will fall into this catchment as the income per household will be £42,000.
Gavin Smart, the deputy chief executive of the Chartered Institute of Housing had the following to say on the government’s consultation on the ‘pay to stay’ scheme for social housing tenants :
“It’s important that the government is looking at how ‘pay to stay’ will work in practice – we’re concerned that it could prove to be quite complex and expensive for social landlords to administer.”
“There is a risk that it could make social housing too expensive for people on relatively low incomes – for example, a couple who both earn £15,000 a year would be subject to this policy outside London – so we would favour a graduated increase in rent as people’s incomes rise. The policy will need to be designed very carefully to make sure it is not discouraging people from either finding work or securing a better paid job.”
Housing associations will be able to keep the extra income generated, and Mr Smart said local authorities should be able to do the same, rather than return it to the Treasury. He said:
“We think it’s important that any extra income raised is retained locally so it can be reinvested for the benefit of local tenants and residents.”
To find out more about the consultation and make a response – click below :
To view the document – click here
The consultation closes on Friday 20th November at 11.45am.
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