Delay for housing benefit reforms until January 2012

Millions of people who currently claim housing benefit are to be given more time before cuts are introduced.

Ministers had planned to introduce a cap from next April on how much housing benefit could be claimed.

But the BBC understands that existing claimants will now have until January 2012 to adjust their circumstances if needed before the caps are brought in.

The Department for Work and Pensions would not confirm the move, which it said was "speculation".

The new limits are £250 a week for a one-bedroom home, £290 for a two-bed, £340 for a three-bed and £400 for a four-bed.

A second change, to reduce housing benefit rates from average local rents to the value of the lowest third of rents, was due to come into force next October.

This will also be delayed for existing claimants until January 2012.

The aim is to streamline the benefit changes and give claimants more time to find a new home if they can no longer afford their existing property.

BBC deputy political editor James Landale says ministers hope to avoid controversial changes being introduced so close to next May's local and devolved elections.

The caps have given rise to fears that some claimants will no longer be able to cover their rents and would have to move out of central London.

The delay in introducing the cuts will cost the government a substantial amount of money.

But officials say the money will largely be raised by bringing forward the cut in housing benefit rates for new claimants from October 2011 to next April.

The caps would apply to new claimants from next April as planned.

A Department for Work and Pensions spokesman said: "This is speculation. The truth is the housing benefit system is unfair for those who receive it and the taxpayer that funds it, and we have to put fairness back at the heart of the system."

But Simon Hughes, the deputy leader of the Liberal Democrats, said the prospect of a delay was a good signal that the government was listening.

He said: "Many of us have pressed very hard since the Budget in June for a more gradual and sensitive change in the benefit system."

The government's plan had been a source of tension, with some Liberal Democrats warning it could lead to an exodus of poorer people from the inner cities.