Budget data analysis suggests that the single room rent for the under 35’s will be brought forward to January 2012 from the original implementation date of April 2012. This change is identified within this week’s Budget tables: (see line b in Table 2.2 on page 43 of the Budget Policy Decisions available on the link below).
http://cdn.hm-treasury.gov.uk/2011budget_chapter2.pdf
Scottish benefits practitioners very recently discussed that there was a danger that the extension of the single room rate (or shared accommodation rate) to 25 to 35 year olds might surface as problem earlier than its planned introduction date of April 2012; some landlords, aware that this change is in the pipeline, may not renew tenancies to those within that age range as they expire in the coming financial year. The amendment was introduced shortly thereafter, with the effect that the relevant change date would be brought forward to January 2012
One reason put forward for the change is that it will prevent a situation in which a 25 to 35 year old would have a reduction to the 30% in January (when their nine month transitional protection runs out), then three months later have a further reduction when the single room rent or shared accommodation rates kicks in. This change means that they will just take the one big hit, albeit some of it earlier than previously announced. It is understood that the minister will issue a statement about this change on Monday.
This earlier introduction has been estimated to provide savings of £10 million in the last 3 months of 2011/12, then climb to an initial full year saving rate of £170 million in 2012/13 before rising to a steady state annual saving of over £200 million. The issue of possible transitional protection for existing claimants has yet to be clarified.
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