Pay to Stay[1] was the name of a government policy in the United Kingdom whereby council tenants earning £30,000 (£40,000 in London) would have to pay "market or near market rents".[2] The measure was due to come into effect in April 2017[3] with the Institute for Fiscal Studies estimating that the policy will impact upon 10% of social housing tenants.[3] On 21 November 2016 the Housing Minister Gavin Barwell announced that the new plans for Pay to Stay would be dropped.[4] Councils maintain the option of charging near market rates to those on incomes of £60,000 or more.[5]
Criticism
editThe trade publication Inside Housing criticised the practicality of the policy given that social landlords had no mechanism to compel tenants to declare their incomes.[6]
Other criticisms of the policy were that it might decrease the total social housing stock by encouraging people to exercise their right to buy and the policy may also disincentivize work if higher earnings resulted in a higher rent bill.[citation needed]
The Pay To Stay policy was also criticised as a "tax on aspiration". It was argued that workers nearing the threshold might reduce their hours to compensate for a pay rise. It was unclear whether a bonus or overtime would have been considered in the accessing of the excess rent to pay by the tenant.[citation needed]
The 2016–2017 tax year was the period that wages would have been accessed, to determine the excess payment. It was suggested that a taper might be used, but there was no information as to how that would have operated.
A taper, for example, may work with every pound earned over the relevant threshold being billed at, say, 50p. If the market rent were deemed £4,000 more than the current rent a year for the tenant, and the tenant earned £31,000 (outside London) they would pay £500 extra rental a year towards that market rent. This would increase with each pound until the £4,000 'shortfall' was met. The tenant would have to earn £38,000 before they stopped having their rent increased.[citation needed]
See also
editReferences
edit- ^ Bell, Gemma (22 July 2015). "Pay to Stay – a double-edged sword? | Comment". Social Housing. Archived from the original on 4 March 2016. Retrieved 23 August 2015.
- ^ Nigel Keohane. "Grand Designs? Getting the government's 'pay to stay' social housing policy right | Social Market Foundation". Smf.co.uk. Retrieved 23 August 2015.
- ^ a b Stothart, Chloe (16 July 2015). "'Pay to stay' law would force social tenants to declare income | News | Local Government Chronicle". Lgcplus.com. Retrieved 23 August 2015.
- ^ "Social Housing:Written statement - HCWS274". parliament.uk. 21 November 2016. Retrieved 20 January 2017.
- ^ "Research Briefings - Social housing: 'pay to stay' at market rents". Researchbriefings.parliament.uk. 18 August 2015. Retrieved 23 August 2015.
- ^ Spurr, Heather (17 July 2015). "Tenants will be made to reveal income under 'pay to stay' | News". Inside Housing. Archived from the original on 2 August 2015. Retrieved 23 August 2015.
External links
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