HOUSING BENEFIT Lilley defends cut in payments to young

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NICHOLAS TIMMINS

Public Policy Editor

Cuts in housing benefit for the under-25s, a renewed drive against fraud and a move that will double to pounds 20 a week the amount charities and others can pay to people on means-tested benefits without their benefit being cut, were detailed yesterday by Peter Lilley, Secretary of State for Social Security.

The housing benefit change potentially affects nearly 200,000 young people living in privately rented homes, saving pounds 100m over the next year.

From October next year, the rent they can claim will be limited to the average for shared accommodation - removing their ability to live in even a one-bedroom flat unless they make up a difference in rent that could amount to pounds 30 a week or more.

In addition, housing benefit is to be paid in arrears, not in advance, while the amounts young people living at home are expected to contribute to housing costs where their parents are on benefit is to rise by more than the rate of inflation

The measures were attacked as "a double whammy" with "malign consequences" by Chris Smith, Labour's social security spokesman. They would encourage families to remove adult children from their homes - and then force young people into shared accommodation. "And this," he said, "is from the party that is in favour of keeping families together."

Mr Lilley, however, argued that the present system let people on benefit live in better accommodation than some in work could afford. It would discourage people from leaving home and reduce the attraction of moving to seaside resorts.

The measure is one that will contribute to a further pounds 500m saving in social security spending next year and pounds 1bn the year after, the biggest single savings coming from restrictions to asylum seekers' benefit and the battle against fraud.

Labour would oppose the asylum seekers' changes, Mr Smith announced, attacking the reforms as "inhumane and unjust". Under the package, which will save pounds 170m this year, benefits will only be paid to 30 per cent of asylum seekers who declare themselves to be refugees on entry to the UK, and those who lose their claim will lose entitlement to benefit while they pursue an appeal.

Mr Lilley is also going ahead with changes which will force more people on industrial injuries benefits to transfer to pensions on retirement age, rather than keeping a reduced earnings allowance. But some of the biggest savings next year - another pounds 120m - are expected to come from more new claimants, around one-third, receiving a home visit when they first claim and from a new computer system which will check housing benefit claims across local authorities - a move aimed at preventing the multiple claims which form a key element of landlord fraud.