The ‘bedroom tax’ is a part of the Government’s welfare reforms that have been designed to reduce the benefits burden in the UK. The concept was introduced by the Welfare Reform Act 2012 and will affect anyone of working age claiming housing benefit as of 1 April 2013.
What is the bedroom tax?
The practical effect of this particular initiative is that the amount of benefits that are received will be reduced where a council home or housing association property comes within the criteria of having a spare bedroom. These changes mean that housing benefit will now only allow for each person or couple in the house to have one bedroom. There is no definition provided as to what constitutes a bedroom – whilst there was some rumour on social media forums that a room under 70 sq ft would not count, this is actually not the case. It is left up to landlords to decide the size of a property and no account is taken of whether a bedroom is a single or a double.
Exceptions
There are several exceptions to the one bedroom allowance for each person or couple living in a household:
- Two children under 10 expected to share, whatever their gender or two children over 16 of the same gender expected to share;
- Approved foster carers who have fostered a child or become an approved carer within the last 12 months;
- A disabled tenant or partner who needs non residential over night care is entitled to an extra bedroom; and
- Those who are adult children in the armed forces are treated as continuing to live at home when on operations.
Who will be affected?
In terms of who is likely to find themselves affected by the bedroom tax, it will only have an impact on those of working age living in property covered by the social housing sector. Within this, the main groups of people likely to be affected are parents whose children visit but don’t live with them; any couples who have a spare bedroom which is used for recuperation from an illness; disabled people; and separated parents who share care of their children – in the case of the latter there must be a ‘main carer’ for the children and only that person will receive an extra bedroom benefit.
Currently (from April this year), where a tenant has a lodger, any income that is received from the lodger will be deducted from any benefits on a pound for pound basis, other than the first £20. However, when Universal Credit is rolled out this will be reversed and income from lodgers will be disregarded.
How much is the benefit cut?
The reach of the bedroom tax will likely be fairly widespread, with some 660,000 people finding their benefits are affected – 31% of working age housing benefits claimants. The amount of benefit that will be lost will depend on the number of extra bedrooms – 14% will be lost for one extra bedroom, 25% for two or more.
The issues being sparked by the introduction of the bedroom tax are proving extremely problematic for many, particularly those who want to move to smaller properties to avoid it but are finding that they simply don’t exist.
We are finding that the majority of possession proceedings in the courts for rent arrears relate to the bedroom tax. Tenants with previous excellent payment records are finding themselves simply unable to afford their rent. If you would like some help and advice on what the bedroom tax means for you then you can contact a member of our team.