George Osborne plans to cut housing welfare for those earning higher wages in a move that is expected to raise £250m a year for the Treasury.
Those earning more than £30,000, or £40,000 in London, and living in Local Authority or Housing Association properties will have to pay the going market rent, the chancellor will announce during his Budget speech this week.
"We’ve also decided it’s time to act on the higher earners who use taxpayer-funded subsidies to live in council and housing association homes when they could afford the market rent that others on their salaries pay," said Osborne writing in The Sun.
"Those earning £40,000 a year in London and £30,000 a year in other parts of the country will have to pay the market rent or at least something close to it, if they want to stay in their homes. It’s a simple matter of fairness."
Osborne is also expected to announce an end to inheritance tax on properties worth less than £1m and a crackdown on non-doms as part of the Conservative's first solo Budget in which he will outline further details of the government's plans to make £12bn of welfare cuts.
"They won’t be easy and some will be controversial. Once again we can expect Labour and the usual pressure groups, who opposed every single welfare saving we made in the last Parliament, to respond with their depressingly predictable howls of protest.
"For them, the welfare budget should only go up and up — leaving the hardworking taxpayer to foot the bill. But I totally reject the idea that the right way to support working people is to have a higher and higher welfare bill.
"The simple truth is, Britain is spending more on benefits for people of working age than it can afford," said Osborne, writing in The Sun.