Charity warns that low earners will not be able to pay their rent under new allowance scheme

Sara Gaines, guardian.co.uk, 30 December 2008

Reforms to housing benefit could push claimants into ghettos as tenants are forced to move to the outskirts of towns where housing is cheap but jobs scarce, a charity warned today.

Shelter found that the Local Housing Allowance (LHA), which is replacing housing benefit paid to benefit claimants and low earners, is not enough to cover private sector rent for many tenants.

Those who lose out will be left to meet the shortfall themselves, and may see the only solution as moving to poorer areas.

Shelter said this would create a poverty trap as such areas, often on the outskirts of towns, have far fewer employment and training opportunities.

LHA is a flat-rate, means-tested benefit paid according to household size and location. It is calculated using the average rent in a given area, known as a Broad Rental Market Area (BRMA).

Shelter says BRMAs are too large and that there are often huge differences in the rents people are asked to pay across the areas. Full Article