Housing Benefit Cuts Caused Debt Spiral

According to recent study, the housing benefit cut led to a debt spiral fro thousands of families in Merseyside.

The changes a.k.a the “bedroom tax” were announced in April and since then over 14 000 residents are now in rent arrears. The housing benefit cut aims at recipients, whose property has a bedroom, which is deemed to be surplus to requirements. May be at some point they will be forced to take loans and sign loan agreements in order to ensure they have somewhere to live.

By doing so, the government is trying to free up larger properties, so that families, who live in homes, too small for their needs could move into them.

It sounds good, however there is a lack of small properties, which can be hired by the “under occupiers”, which leads to additional expenditures for many peple, which puts them into a difficult financial situation.

The NHF (The National Housing Federation) collected information from 18 social  landlords in Merseyside and found out that almost 26,500 households were affected by the recent cuts, but there were only 155 smaller houses available for those people.

Chief executive of the National Housing Federation, David Orr, commented: “The fact is there aren’t enough smaller social homes in Merseyside for people to avoid the bedroom tax, even if they wanted to move.”

A Department of Work and Pensions spokesman, however, said: “We always monitor the impact of our policies carefully but there is no conclusive evidence that people affected by our housing benefit reforms are not getting the help they need.”