THE CUMULATIVE IMPACT OF CAPS, CUTS AND COUNCIL TAX. 

The cumulative impact of the LHA cap, overall housing benefit cap and 20% of the council tax on benefit claimants both unemployed and in work is well illustrated in the excellent brief for Haringey councillors to read before they decided to impose the 20% of the council tax on benefit claimants on the 12th July 2012. It omits the bedroom tax. The link to the brief is here CTB_appendix (2) (2) (1)

Given the information available to the councillors it is astonishing that they decided to tax benefits already drastically reduced by the DWP. As a guide it should be noted that;

1. An unemployed couple with two children receives £261.19 a week from the DWP after rent and council tax. According to the brief the maximum rent that will have to be paid out of £261.19 due to the £500 overall benefit cap is £196.93 a week, the maximum rent due to the LHA cap £110.00 a week and the maximum council tax £6.29 a week .

9 households are affected by all three.

2. An unemployed single adult receives £71.70 a week after rent and council tax from the DWP. According to the brief the maximum rent that will have to be paid out of £71.70 a week due to the £350 overall benefit cap is £193.54, the maximum rent due to the LHA cap £35 a week and the maximum council tax £3.86 a week.

14 households in the London Borough of Haringey are affected by all three.

NB the incomes shown in the brief include housing benefit for both the employed and the unemployed. The £500 cap does not apply to the employed but they are caught by the LHA cap and the council tax.

For example if the unemployed couple with two children had have rent of £300 a week then their total income is £261.19 plus £300 housing benefit = £561 a week. So they pay £61 a week rent out of their benefits or they are evicted; but private sector rents are both higher and lower than £300 a week. If they are in a council house then the rents are low and they are not affected by the cap.