The House of Commons Library has published a report into the Shared Accommodation Rate.

The report can be seen here, and in summary:

What is the Shared Accommodation Rate?

The maximum amount of housing support private renters can get through Universal Credit or Housing Benefit is limited by the Local Housing Allowance (LHA). This is calculated on a household basis and depends on the level of rents in a local area, as well as the number of bedrooms claimants are judged to be entitled to.

The Shared Accommodation Rate (SAR) limits the amount of housing support available through the benefits system for most single private renters under the age of 35. These claimants, with some exceptions, can receive an amount to pay for a single room in a shared house with communal kitchen and bathroom facilities.

Extension of the SAR in 2012

The SAR (then called the Shared Room Rate) was introduced in 1996 and originally limited the Housing Benefit (HB) a single person under the age of 25 could receive to the average rent level for a room in a shared house. As part of the October 2010 Spending Review the Government announced the SAR’s extension to cover single claimants up to age 35 from April 2012. This change was brought forward to 1 January 2012.

Universal Credit has been replacing Housing Benefit for working-age households since 2013 and retains the SAR in calculations of housing support.

Exemptions

In 2017, the Government abandoned plans to use LHA to calculate rental support in the social rented sector, so the SAR does not apply to people aged 35 and under renting from a local authority or registered housing association. In addition, several other groups are exempt, such as some disabled tenants, claimants living with ‘non-dependants’, and young care leavers.

Since the SAR was extended to under 35s, further exemptions have been introduced, including for certain former prisoners, homeless people who have lived in hostels and, from October 2022, victims of domestic abuse and human trafficking.

Commentary on the SAR

The SAR has been controversial since its introduction. Prior to its extension to the under-35s, draft regulations, an Impact Assessment and an Equality Impact Assessment were published and referred to the Social Security Advisory Committee (SSAC) for consultation. The Impact Assessment said around 20% of the 1-bedroom LHA caseload (at March 2010) would receive, on average, £41 per week less benefit than under the previous rules.

The extension to under 35s was expected to affect around 63,000 people. The SSAC recommended it should not go ahead. The Government rejected the SSAC’s recommendations but included in the final regulations two additional exemptions which only apply to the extended age group.

Since its introduction, commentators and campaigning organisations have continued to point to shortages of shared rooms available to young benefit claimants, and shortfalls between benefit levels and rent.

For example, a Crisis report, Falling short: Housing benefit and the rising cost of renting in England (PDF, August 2022) called for Government to invest in Housing Benefit “so that it covers the true cost of rents”.