Page last updated at 01:03 GMT, Tuesday, 15 December 2009

Housing benefit 'cut' put on hold by government

Housing estate
The system was meant to encourage people to shop around for property

The government is to put on hold plans to reclaim up to £15 a week in housing benefit from about 300,000 families.

The current system allows people to keep up to £15 if they find housing at a lower rent than the level of housing allowance set by their local authority.

Ministers had intended to scrap this from April, saving £150m, as they said most claimants did not benefit.

But the move will be delayed until 2011 after a consultation showed the measure helped push down rents.

The decision will be announced by the government later as part of a wider reform of housing benefit.

Backbench anger

BBC political correspondent Reeta Chakrabarti says the move was contained in a little-noticed paragraph referring to unspecified "disadvantages" in last week's pre-Budget report.

The change had been due to come in next April, just weeks before an expected general election.

The change of heart will be welcomed by Labour backbenchers who had expressed anger at the proposed cuts, our correspondent added.

In August, ministers were warned they faced a backbench rebellion over the plans, with Labour MP Frank Field saying to end the system would be "crazy".

Since 2008, new housing benefit claimants have been entitled to get up to £15 a week back - £780 over a year.

It was a key part of the government's reform of housing benefit and was meant to encourage people on low incomes to shop around for the best deal when looking for rented accommodation.



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