Not only is this not correct (housing benefit cannot be sanctioned), but a JSA sanction actually has the effect of preserving entitlement to housing benefit under regulation 2(3):
(3) For the purposes of these Regulations, a person is on an income-based jobseeker’s allowance on any day in respect of which an income-based jobseeker’s allowance is payable to him and on any day—
(a)in respect of which he satisfies the conditions for entitlement to an income-based jobseeker’s allowance but where the allowance is not paid in accordance with section 19 or 20A of the Jobseekers Act(46) (circumstances in which a jobseeker’s allowance is not payable
A person who has lost JSA for other reasons may still receive housing benefit if they have little or no other income, but they would have to take certain steps to demonstrate the lack of other income (HB can be claimed on grounds of low income alone, without receiving any other benefits). But where a JSA sanction is in place, regulation 2(3) is very clear that JSA is treated as if it were still being paid, for HB purposes.
I had wondered whether councils were getting it wrong because they are not getting enough information about why JSA is being stopped. So I asked the DWP what information is being given.
It seems clear that enough information is being given to councils to enable them to see whether JSA has stopped because of a sanction or not. The question must therefore be asked: why are councils still suspending or even ending HB entitlement when they have no business doing so? And why are the DWP not setting them straight?