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Work Incentives

Volume 447: debated on Monday 5 June 2006

To ask the Secretary of State for Work and Pensions what plans he has to review the structure of (a) housing benefit and (b) council tax benefit in order to improve work incentives; and if he will make a statement. (64015)

We continue to keep work incentives in both benefits under review. For example, since April 2004 a move into work has no longer required a fresh claim for either housing benefit or council tax benefit for the vast majority of people. Also, from April 2004 the extended payment scheme in housing benefit and council tax benefit has been widened to include people moving off incapacity benefit or severe disablement allowance because they are starting work.

As outlined in the Green Paper “A New Deal for Welfare: Empowering People to Work” published in February, we propose to roll out the new local housing allowance to tenants in the private rented sector. The local housing allowance would be a major simplification of the housing benefit system which would make it easier for people to understand what in-work support they could receive. Our proposal to pay the local housing allowance directly to tenants, rather than to landlords, is also designed to promote financial inclusion and, where appropriate, help tenants develop financial and budgeting skills as they move towards work.