Increased overcrowding among households receiving housing allowance
Despite the fact that the central government annually spends almost SEK 5 billion on housing allowance, the proportion of overcrowding among households is increasing. At the same time, the allowance has lifted a large number of households out of absolute poverty, according to the Swedish National Audit Office’s audit.
The Swedish National Audit Office has examined whether the housing allowance fulfils its housing and family policy objectives. The audit shows that effectiveness with respect to the housing policy objective is decreasing.
“The proportion of overcrowding among households receiving housing allowance has increased during the period under review. This is probably partly because the housing market has changed, but also because the part of the housing allowance based on the cost of housing has not kept up with the rent trend,” says Tobias Hamfelt, project leader for the audit.
However, the effectiveness of the second objective of the housing allowance – family policy – has increased in that a larger proportion of households with children does not have to live in what is called ‘absolute poverty’, with the help of the housing allowance.
These findings reflect the Government’s management in this area. The Government has repeatedly implemented adjustments to address the effectiveness of the family policy objective, but only a limited number of measures relating to the housing policy objective.
Even the Government’s reporting to the Riksdag has focused on the family policy objective, while reporting on the housing policy objective has been insufficient.
“The Government should have informed the Riksdag about the decreasing effectiveness of the housing policy objective. Especially considering that the Riksdag has made it clear that it wants such information,” says Auditor General Helena Lindberg.
The audit findings suggest that the design of the allowance, with two different policy objectives, is not efficient. Working towards these two objectives involves a risk that they would be mutually counterproductive.
“The Government should consider amending the design of the housing allowance to ensure that one objective is not achieved at the expense of the other,” says Auditor General Helena Lindberg.
Recommendations in brief
The Swedish National Audit Office recommends that the Government review the design of the housing allowance and the suitability of the allowance containing both the housing policy and family policy objectives. A review should also include the question of how to enhance the effectiveness of the housing policy objective, for example by keeping the part of the housing allowance based on housing costs in line with the rent trend.
The Government should also follow up the effectiveness of the housing allowance on an ongoing basis, and report back any need for change to the Riksdag. Such reporting should include developments on overcrowding among households receiving housing allowance.
Housing allowance
The housing allowance is a means-tested social insurance benefit granted to households with children and people aged 18 to 28 years old without children. The housing allowance includes a housing policy objective and a family policy objective. The housing policy objective aims to give households with limited resources the possibility to request good-quality and sufficiently spacious housing. The family policy objective is based on the overarching goal of economic family policy, which is to contribute to a good economic living standard for all families with children and reduce the economic disparities between households that have children and those that do not have children. In 2022, just over 190 000 households received SEK 4.7 billion in housing allowance.