The effectiveness of the housing allowance – overcrowding and absolute poverty

The quality of housing is lower for households receiving housing allowance housing than for the general population. This has been the case for a long time and the circumstances have not changed significantly over time. However, the rate of overcrowding among households receiving housing allowance is higher than previously. This applies to all groups of households receiving housing allowance and even when comparable households in poverty are compared over time. In other words, the higher rate of overcrowding does not appear to stem from the fact that households receiving housing allowance have lower incomes than previously, in relative terms.

While the housing allowance to a lesser extent achieves its housing policy objective, the focus of the housing allowance scheme towards sufficiently spacious housing has decreased, and it has become more difficult for households to request sufficiently spacious housing. For example, the housing allowance amount that a household receives has not kept up with the cost of rent and the proportion of rented dwellings in the housing stock has diminished.

The proportion of individuals in households with children receiving housing allowance who live in absolute poverty has diminished and, with the help of the housing allowance and the proportion of individuals in households with children who do not live in absolute poverty has increased. The housing allowance has also been redistributed to lower-income households with children. The housing allowance’s contribution to reducing disparities in economic conditions between households with children and those without children has varied over time, but there has been no clear improvement or deterioration.

The Swedish National Audit Office considers that the Government’s follow-up and reporting of the housing allowance’s family policy objective has been sufficient and that this has been the Government’s main focus. The Government has followed up the housing policy objective, albeit with certain shortcomings, as there have been no recurring follow-ups and they have not clearly focused on the possibilities of demanding good-quality and sufficiently spacious housing. Furthermore, the Government has to a low degree reported back the effectiveness of the housing allowance’s housing policy to the Riksdag.

The Government has repeatedly made adjustments to the housing allowance to address achieving the family policy objective. At the same time, the Government only has taken a limited number of measures related to the housing policy objective, and these were not taken with the aim of strengthening the housing policy objective.

The Swedish National Audit Office considers that the two-tier objective of the housing allowance makes it difficult to achieve both objectives of the allowance. By making adjustments that aim to strengthen one objective, the direction of the other objective is at risk of weakening, leading to poorer effectiveness. In addition, the housing allowance has recently been given a third objective - to support economically vulnerable households in financially difficult times, through the introduction of the temporary additional allowance. The Swedish National Audit Office considers that once the temporary additional allowance has been in place for some time, the housing allowance should be examined to determine whether it is a suitable benefit to use for this purpose.