From the Sunday telegraph

Higher income earners who live in social housing will no longer be able to claim taxpayer-funded subsidies for their rent under a fresh welfare cut expected to be announced by George Osborne in his Summer Budget this week.

The “Pay to Stay” measure, which will form part of the Chancellor’s attempts to slash the Government’s welfare bill by £12bn, will scrap benefits for some 350,000 people who live in housing association and local authority properties. The move will save £250m a year by 2018/19, a fraction of the £12bn Mr Osborne plans to cut.

From 2017/18, those on incomes above £40,000 in London and £30,000 in the rest of England who live in social housing will be charged a market or near-market rent. The Treasury estimates that higher income social tenants benefit on average from more than £3,500 per household from reduced rent. This group of people represent around  9 per cent of all social tenants in England, including more than 40,000 social rented tenants with household incomes in excess of £50,000 per year, and a further 300,000 with incomes of more than £30,000.

For the past five years, housing associations and local authorities have been able to charge market rents to those on incomes of more than £60,000. The Treasury will recoup the additional rental income that local authorities receive, which will be used to reduce the deficit and generate extra income for housing associations to reinvest in affordable housing.

Sources said the measure would affect the “Frank Dobsons of this world” after the former Labour MP was revealed in 2011 to have been living in a council house despite being on a Commons salary of £66,000.

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See also ITV story