Tenants of supported accommodation will not be subject to the Local Housing Allowance (LHA) cap on housing benefit until April 2017 after the UK government introduced a year-long exception.

Under the change, announced in a written statement, the government said it will “put in place a year-long exception for all tenants of supported accommodation in the social sector so that this measure will only apply to these tenancies from April 2017, rather than April 2016”.

Chancellor George Osborne has set out plans to extend the LHA rate to social landlords in his Autumn Statement and Spending Review in November.

Concerns had been raised across the sector the cap would have adversely affected tens of thousands of vulnerable people living in supported housing schemes as the rate is far lower than the cost of rent and service charges that is needed to provide refuge and supported accommodation.

The statement, made by minister for disabled people Justin Tomlinson, said: “In the Autumn Statement 2015, we announced that when assessing eligibility for Housing Benefit and Universal Credit that Local Housing Allowance rates would be applied to all social rents from April 2018, where tenants had signed new or re-let tenancies from 1 April 2016.

I am able to announce today that the government will put in place a year-long exception for all tenants of supported accommodation in the social sector so that this measure will only apply to these tenancies from April 2017, rather than April 2016.

“As examples, this will include refuges for those fleeing domestic abuse, homeless provision, housing for ex-offenders, as well as supported housing for older and disabled people.

“I can also confirm that the one year exception will extend to housing co-operatives, alms houses and Community Land Trusts.

“I am doing this because I understand the importance of ensuring that both those living in supported accommodation and those who provide this type of accommodation receive appropriate protections.

“This is why we are awaiting the outcome of a Supported Accommodation research project and subsequent policy review, to ensure support is focused on the most vulnerable, and appropriate groups are safeguarded.

“I consider it important to have evidence to support any decisions made, before determining the level of any protections for this cohort beyond April 2017.

“I will write to social landlords and provide guidance that will allow them to advise people taking on new and re-let tenancies from either April 2016 or April 2017 (for supported accommodation) as to how they may be impacted.”

David Orr, chief executive of the National Housing Federation, welcomed the announcement but warned that “uncertainty remains” in the future as the cap has been postponed and not cancelled altogether.

He said: “We are pleased that the government is listening to our concerns and has delayed the application of the LHA cap to people in a wide range of supported and sheltered housing.

“We are equally pleased that there will be a full strategic review into how these services are funded and we will contribute fully to that review.

“However, the continued threat that a crude LHA cap might be imposed in the future means substantial uncertainty remains. The best way to end the uncertainty is to remove that threat. The LHA cap should not be part of the outcome of the review and there must be long-term stability and security for the sector.”

The sentiments were echoed by Rachael Byrne, Home Group’s executive director of care and support, who said: “Supported housing providers have been saying for some time that an LHA cap would result in fewer services being economically viable. We’re grateful that government has listened to our concerns.

“However this postponement is only a stop gap solution. Government needs to move quickly to set out how services will be funded.

“We understand the need for welfare reform and we look forward to engaging with Government to make supported housing sustainable and also deliver wider value for the taxpayer.

“Government has hinted it has no intention to apply LHA to supported accommodation but housing providers can’t operate on suggestion. We need long term certainty and the people we support deserve reassurance.”

Mrs Byrne fears an introduction of LHA funding for supported housing could lead to extra financial pressures on the NHS as people turn to accident and emergency services and GPs for help they no longer receive.

She added: “Supported housing improves vulnerable people’s health and independence and helps ease the pressure on the NHS and other services. Crucially it does so at a fraction of the cost of providing the same care in a medial or clinical setting.

“One of our services for people with learning disabilities has a typical cost of £260 per week compared to a low low-level secure NHS service of £400 per bed, per day.”