Bedroom Tax

The change

From 1 April 2013, changes in housing benefit rules will take effect. These changes (called bedroom “tax” by Labour and opposition groups) will affect the amount of Housing Benefit paid to those renting from their Local Authority or a registered housing association. The new “tax” restricts the amount of benefit which can be paid depending on the number and ages of people in a household.

Under this new “tax”, the “size criteria” will determine your entitlement so that household will be assessed for the number of bedrooms they actually need. If a household is under occupied, the total eligible rent for Housing Benefit will be reduced by:

•    14% if you have 1 extra bedroom;
•    25% if you have 2 or more extra bedrooms.

For example, if your eligible rent (rent you are entitled to receive) is £100 per week your eligible rent would be reduced by £14 per week if you have one extra bedroom or by £25 per week if you have two or more extra bedrooms. Your Housing Benefit entitlement will be calculated using this reduced eligible rent amount.

Who is entitled to a bedroom?

The new rules currently allow one bedroom for:
•    every adult couple;
•    any other adult aged 16 or over;
•    any two children of the same sex aged under 16;
•    any two children aged under 10;
•    a carer (or team of carers) who do not live with you but provide you or your partner with overnight care.

The DWP issued guidance (HB/CTB U2/2013) after accepting that the Local Housing Allowance (for non Local Authority or Housing Association tenants) size criteria discriminated unlawfully on grounds of disability. This is because the rules did not meet the need for a disabled child who requires an additional bedroom.

As a result, from 15 May 2012, Local Authorities should allow an extra bedroom for children who are unable to share. The guidance provides: “When a claimant says that their children are unable to share a bedroom, it will be for Local Authority’s to satisfy themselves that this is the case, for example, a claim is likely to be supported by medical evidence and many children are likely to be in receipt of Disability Living Allowance (DLA) for their medical condition.

Local Authority’s must consider not only the nature and severity of the disability, but also the nature and frequency of care required during the night, and the extent and regularity of the disturbance to the sleep of the child who would normally be required to share the bedroom. In all cases this will come down to a matter of judgement on facts of each individual case.”

However, the Government does not accept disabled adults should be afforded with this exception – for example where the claimant is one of a couple who is unable to share a bedroom or where an extra room is required for them to use equipment connected owing to their disability.

In this regard, disabled people and families are challenging the Government’s decision to cut Housing Benefit for recipients living in properties deemed too large. They seek to argue that the change is discriminatory against them because they need extra rooms to cope with their disability. There are 10 claimants represented by three law firms from London, Stoke-on-Trent, Manchester and Birmingham, who have taken their case to the High Court to challenge the changes. If unsuccessful in their challenge, they argue they would need to move. The High Court heard these cases from 13-15 May, but has reserved judgment and we await the High Court’s judgment.

Any exemptions

For students, parents will not be penalised if their children are away at University as long as they sleep at home for at least two weeks a year (often during end of term). However, when Universal Credit comes in, students will need to be at home for at least six months to avoid a benefit cut.

For claimants with a paying lodger will be allowed to keep the first £20 of weekly rent, but Housing Benefit will be then be cut, pound for pound, on the rest of the rent they receive. When Universal Credit comes in, Housing Benefit will be cut, but tenants will be allowed to keep all the rental income.

For pensioners, if either half of a couple are of pensionable age, they will not face reductions to their Housing Benefit. Under Universal Credit, both will need to be over pensionable age, or one will need to be in receipt of pension credit, in order to qualify for the maximum benefit.

Discretionary housing payments

As dispensation for the new “tax” the Government has made an “extra” £30 million available to the discretionary housing payments budget. In practise, these payments is likely to be available for “priority groups” that include the needs of people whose homes have had significant disability adaptations and those adults with long term medical condition that create difficulties in sharing a bedroom.

Most applications can be made to the Local Authority in writing by completing a standard form or by writing a letter. The Authority is likely to ask for detailed information about the household’s circumstances.

If the application is successful the Local Authority will award discretionary housing payments – but the amount paid and duration for which it is paid, will be discretionary. If the application is unsuccessful, there is no formal right to request a review (unlike Housing Benefit which could potentially be determinate by the HM Courts & Tribunal Services); however you are able to ask that the Authority look again at its decision if you are dissatisfied.

On 18 May 2013, The Guardian reported “More than 25,000 people applied for discretionary housing payments (DHP) to help cover their rent in April, compared with 5,700 in the same month last year, according to an analysis of 51 councils by the Independent. The Government has substantially increased DHP funding for local authorities to help those most affected by the withdrawal of what ministers call the “spare room subsidy”.”

What can you do

-If you are working or have children in Full-time education, ensure you have informed the Local Authority of your full income and children education status and ask for a reassessment to ensure you are getting what you are entitled to.

– Apply for Discretionary Housing Payments. Be sure to mentioned full circumstances, disabilities, income and expenditure and if your are downsizing. Have a read of the guidance linked below to ensure you mention all that applies to you.

– Verify room sizes. Local Housing Associations have been reassessing how “big” a accommodation is and reclassifying their properties to avoid this tax. Get in touch with your Housing Association to ask them about this. If you have any rooms that are small or below 70 square meters look to have it reclassified so it is not a bedroom (as it is not!). There have subsequently been multiple FTT decisions to back this view point.

Further Reading

DHP Guidance
Housing Benefit CircularImpact Assessment
Equality Impact Assesment

Edited 28/12/13

There also may be an exemption if you have have been receiving Housing Benefit for one property continuously from before 1st January 1996. Also see here. However this “loophole” is yet to be properly tested and DWP have indicated this was an oversight to be corrected soon.

Edited 9/01/14

DWP have acklowedged the existance of the loophole above and have asked LHA to re-assess based on the same. Namely pursuant to paragraph 4(1)(a) of Schedule 3 of the Housing Benefit and Council Tax Benefit (Consequential Provisions) Regulations 2006

Edited 23/2/13

New post discussing Post March and Bedroom Tax