Higher earners living in social housing are to lose thousands of pounds a year in subsidised rent, it has been reported.
The move would effect tenants earning £40,000 a year in London and £30,000 outside of the capital, increasing the amount they’ll be asked to pay by around £70 a week.
Local authorities and housing associations are already allowed to charge market rent to tenants earning over £60,000 a year. But plans expected to be announced by George Osborne on Wednesday will see an additional 300,000 social housing tenants affected for the first time.
Those people will be expected to pay the full market rent, raising an estimated £250 million in 2017/18 for the Treasury.
Approximately 9% of all social housing tenants in England will be ordered to “Pay to Stay” or find somewhere else to call home.
The Chancellor will argue that 40,000 tenants earning over £50,000 are benefiting from subsidised housing.
According to the government, higher earners have saved over £3,500 per household from reduced rent. Sky News describes the government’s plan as a “purge on rich council house tenants“.
The Tory government has committed itself to cutting £12bn from the welfare bill. Under consideration are cuts to Housing Benefit, Tax Credits and a lower Benefit Cap – among others.
PM David Cameron has also failed to rule out slashing disability benefits. A leaked document suggested that Tory ministers are considering slashing Employment and Support Allowance (ESA) for claimants in the Work Related Activity Group (WRAG), affecting thousands of sick and disabled people.
It’s also understood that George Osborne wishes to reduce the higher rate of tax from 45p to 40p. However, this is unlikely to happen in Wednesday’s ’emergency budget’.