Housing Benefit and Financial Returns to Employment for Tenants in the Social Sector

Abstract

Abstract This paper examines the impact of the UK housing benefit system on the financial returns to employment of people in local authority or Housing Association accommodation. It outlines the current structure of housing benefit and examines its effects on the returns to employment using data from the Family Expenditure Survey. It analyses the consequences of a number of reforms to the current system — lowering social rents, increasing the levels of housing benefit received in work and restricting the amount of rent covered by housing benefit payments. This analysis highlights the trade‐offs involved in various strategies available for restructuring the present system. JEL classification : H3, H4, J3.