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The Chartered Institute of Housing is the independent voice for housing and the home of professional standards

Pay to stay to be voluntary for housing associations - CIH comment

15/12/2015


Giving evidence to the Communities and Local Government select committee today, housing minister Brandon Lewis told the committee that the government’s proposed ‘pay to stay’ policy – which will see social housing tenants in England with a household income of £30,000 or more (£40,000 in London) paying higher rents – will be voluntary for housing associations.

Chartered Institute of Housing chief executive Terrie Alafat said: “We have warned that pay to stay could discourage social housing tenants from increasing their earnings or finding work, and also that it could push people into housing benefit entitlement, so we welcome the government’s proposal to make it voluntary for housing associations. However, we think the same approach should be extended to local authorities – why should council tenants be treated on a different basis? We are also concerned that the previously proposed income thresholds are simply too low, even if the scheme is voluntary. You cannot class a household with an income of £30,000 as ‘high income’. A single person with no children might seem relatively well off, but what about a couple who both earn £15,000 and have three children?”

Terrie Alafat said the definition will become even more blurred with the introduction of the national living wage. Based on the current level of £7.20 per hour, a household with two earners working a 40-hour week on the living wage will earn £29,952 a year, so they would just escape the current threshold. She added: “It must be contradictory for a household to be on the statutory minimum wage and also less than £50 away from being classified as a high earner for housing policy purposes.”

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