Hackney residents to lose £119m in welfare reform cuts

Members of the public protest against bedroom tax. Picture: PA

Members of the public protest against bedroom tax. Picture: PA - Credit: Archant

»Residents in Hackney are some of the worst hit in London as a result of the government’s controversial welfare reforms, according to new research.

A study carried out by Sheffield Hallam University showed that the average loss per working age adult in Hackney is £670 a year – the fourth worst in London and the 21st worst in the UK.

The cuts will result in affected residents losing £119million in benefit income a year – the seventh-highest figure in the city.

It is estimated over 20,000 residents are affected by the reforms, introduced on April 1.

The research also looked at the effect changes to individual benefits would have on the country’s residents.

Residents in Hackney were the third worst affected local authority in the UK by the controversial bedroom tax – with the average Hackney resident losing £28 per year.

Hackney residents also faced a loss of £120 per year in Local Housing Allowance as payments for rent in private accommodation became capped – making it the sixth worst affected authority in the country. They also faced household benefit cap of £28 per year – the ninth worst in the county.

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Professor Christina Beatty, of Sheffield Hallam’s Centre for Regional Economic and Social Research, co-led the study with Professor Steve Fothergill. She said: “Due to high rents, residents in Hackney will be most impacted by local housing allowance and household benefit caps.

“There’s limited evidence at the moment that people are moving but it will be interesting to see what happens in two to three years time. I imagine some people will move to over-crowded or lower quality accommodation.”

She added: “It’s hard to see how these changes will help people on the poverty line.

“There are misconceptions about the type of people who are affected – you only ever see the worst cases on television.

The average case is somebody who has lost their job in the recession or struggling in a low-income job. Forty per cent of those on housing allowance are in work.

In addition, people in receipt of benefits, such as income support, will no longer be entitled to 100 per cent council tax benefit payments. All working age claimants will be required to pay at least a contribution but disabled residents, carers and war veterans will pay no more than £4.99 per week.

The study showed that changes to council tax benefits will result in the loss of £22 a year to Hackney residents – the thirteenth worst equal affected local authority in the country.

The Department for Work and Pensions (DWP) claim the changes will make work pay, improve support for disabled people, and help ensure the benefit system is financially sustainable in the future.