The controversial ‘Bedroom Tax’ --- how will it affect you

The Prime Minister on the spot

To date we have received a fair amount of emails asking about the so called ‘Bedroom Tax.’ This is from my friend Anna Wyman who contacted me recently to say:

“I emailed Dave Liversidge 2 weeks ago with my concerns about the controversial bedroom tax and to ask him if he knew of any protests taking place in Nott’s in the near future but as yet I have not received a reply. As you write for the Nottingham Post, would you be able to do an article on this awful tax which is frightening so many people?”

Thank you Anna.

Welfare reforms will cut the amount of benefit that people can get if they are deemed to have a spare bedroom in their council or housing association home. This measure will apply from April 2013 to tenants of working age.

The power to do this is contained in the Welfare Reform Act 2012 and is commonly referred to as the “Bedroom Tax”, size criteria or under-occupation penalty.

What do the changes mean?

The size criteria in the social rented sector will restrict housing benefit to allow for one bedroom for each person or couple living as part of the household, with the following exceptions:

•Children under 16 of same gender expected to share

•Children under 10 expected to share regardless of gender

•Disabled tenant or partner who needs non resident overnight carer will be allowed an extra bedroom

Who will be affected?

All claimants who are deemed to have at least one spare bedroom will be affected. This includes:

•Separated parents who share the care of their children and who may have been allocated an extra bedroom to reflect this. Benefit rules mean that there must be a designated ‘main carer’ for children (who receives the extra benefit)

•Couples who use their ‘spare’ bedroom when recovering from an illness or operation

•Foster carers because foster children are not counted as part of the household for benefit purposes

•Parents whose children visit but are not part of the household

•Families with disabled children

•Disabled people including people living in adapted or specially designed properties.

How much will people lose?

The cut will be a fixed percentage of the Housing Benefit eligible rent. The Government has said that this will be set at 14% for one extra bedroom and 25% for two or more extra bedrooms.

The Government’s impact assessment shows that those affected will lose an average of £14 a week. Housing association tenants are expected to lose £16 a week on average.

How many people will see their benefit cut?

The proposal will affect an estimated 660,000 working-age social tenants – 31% of existing working-age housing benefit claimants in the social sector. The majority of these people have only one extra bedroom.

Do the regulations define a bedroom?

No. The Government’s view is that it is for landlords to specify the size of the property and this ought to match what is on any tenancy agreement and reflect the level of rent charged. The bedroom tax will not take account of whether a room is a single or a double bedroom. A room either is a bedroom or is not a bedroom.

What about lodgers?

From April 2013 lodgers will count as occupying a room under the size criteria rules. Any income from a lodger will be taken into account and deducted pound for pound from benefit apart from the first £20. This reverses under Universal Credit – lodgers will not be counted as occupying a room and the size criteria reduction will apply, but any income from lodgers will be fully disregarded and will not impact on the amount of a claimant’s Universal Credit award.

DWP have produced a fact sheet on things to consider when renting out a room. Taking in a lodger will also have an impact on many home contents insurance policies, potentially invalidating a policy or raising the premiums.

What about students studying away from home?

Households where there is a room kept for a student studying away from home will not be deemed to be under-occupying if the student is away for less than 52 weeks (under housing benefit) or 6 months (under Universal Credit).

Under housing benefit rules students are exempt from non-dependant deductions, however full-time students will not be exempt from the Housing Cost Contribution (HCC) which replaces non-dependent deductions under Universal Credit. All young people under 21 are exempt from the HCC, but students over 21 will face a contribution in the region of £15 per week.

Are pre-1989 tenancies exempt from the bedroom tax?
No.