The much talked about and hated bedroom tax has hit the headlines yet again. This time, the claim is that the bedroom tax has resulted in more than 50,000 people falling behind with their rent, leaving them facing eviction from their homes.
This figure was revealed by the campaign group False Economy, after it received responses to its Freedom of Information (FOI) request from 114 local authorities across Britain. It is estimated that a further 30,000 people living in Housing Association (HA) properties have also fallen behind on rent payments since the bedroom tax was introduced.
Separate research by the National Housing Federation (NHF) suggests that potentially tens of thousands more are affected.
Whilst this figure is shocking to hear, it is not surprising, at least to those who are familiar with or work within the housing industry. The privated rented sector has been dealing with higher levels of arrears from recipients of housing benefit for a number of years now, without any recognition or help from government.
It is inevitable that people who are on very limited budget will find it difficult to suddenly find themselves in a situation of paying out anything from a few tens of pounds per month, to a hundred pounds or more. They will probably end up not paying the shortfall, or borrowing to pay the shortfall, and then being unable to pay back the borrowed money, and the cycle unfortunately continues. Eviction is the inevitable result of someone being unable to pay the rent, and councils will now find themselves spending more money to manage those on arrears and on eviction. Where is the savings then?
As I wrote in the previous article explaining that South Cambridgeshire District Council had adopted the bedroom tax policy, this policy is part of the Welfare reform that the government introduced in April this year. The fact that so many tenants are now in rent arrears barely four months after its introduction shows just how toxic the bedroom tax policy could become. The councils do not use the term bedroom tax, instead referring to it as under occupancy, under-occupancy-rules, or size-limit-rules.
Who is affected by the bedroom tax?
The bedroom tax is aimed at council and housing association tenants that are of working age, but below the state pension age, who claim housing benefit to help them pay some or all of their rent. There is a limit on the number of rooms that a claimant can claim housing benefit for, and is based on the following:
- one bedroom for a couple
- one bedroom for anyone aged 16 or over
- one bedroom for two children under 16 years of the same sex
- one bedroom for two children under 10 years of opposite sex
- one bedroom for any other child
- one bedroom for a carer who needs to stay overnight
There are some other special circumstances that could be considered, for example foster carers, parents adopting a child, members of the armed forces, students away from home etc. In such cases, the claimant will need to explain their circumstances in full to the local authority so that the right decision can be made for them.
Who is exempt from the bedroom tax?
The bedroom tax will not be applied to a number of people including:
- people who are of state pension age (61 years and 5 months) or in receipt of state pension credit
- people living in shared ownership properties
- people living in caravans, mobile homes and houseboats
- people living in supported accommodation
- people who are homeless but being housed in temporary accommodation provided by the council
What options are available to those affected by bedroom tax?
The fundamental problem here is the shortage of social housing which has been compounded by successive governments not building or facilitating the building of enough social housing following the sale of thousands of properties under the council right to buy scheme. Anyone finding themselves under occupying should ideally move to a smaller property – but there are not enough properties to go round!!
So what are the options:
Revise household budget
This is the first step really and should be done carefully and honestly. All the outgoings should be scrutinised to see where it may be possible to make savings. Claimants should take advice on how to manage their finances in a better way.
Funds from local council
The government gave local authorities some money to use in cushioning the effect of the bedroom tax. This money is limited, and is paid out as Discretionary Housing Payments (DHP) and claimants will need to contact the council to see if they are eligible to receive the DHP.
Check all available benefits
There are a number of benefits available, and it is worth talking to a benefits adviser at the local council or the Citizen Advice Bureau to find out if a claimant is receiving all the benefits that the law says they are entitled to.
Help with finding work
It is well known that finding work in the current financial climate is difficult. It is not impossible in some of the more affluent areas, but this option is in the long term the better one as it lessens and eventually removes the dependency on the welfare state. It is worth talking to local businesses to see if there’s potential jobs, even if part time. The council may also have a list of businesses or employers that they could provide to job seekers.
Taking a lodger
By renting out the spare room, the bedroom tax will no longer apply as someone will be living in it. This option should not be considered lightly. It involves bringing someone into the home to live, with issues of privacy etc. Anyone considering doing this should let their landlord know and get a written consent.
In South Cambridgeshire, King Street Housing Society runs an approved lodger scheme whereby they do the work of finding and vetting the lodger.
Moving to a smaller council house
Downsizing, moving to a smaller house is the obvious answer to the dilemma of under-occupation – in theory. In practice it is not so simple as there is a shortage of social housing. It may be possible to exchange locally with a family that may be over crowded in their home. Moving to a council house in another area is also an option that could be considered and the local authority should be able to help.
Moving to privated rented sector
This is considered as a last resort option, because it involves giving up a secure tenancy, and rights such as the right to buy option. Rents in the private sector can be higher, depending on the area, so anyone considering this option should check that they will not be worse off than if they stayed in their current house.
If the welfare reform is to work, then government needs to pull its finger out to ensure that it supports more social house building, and gives local authorities the statutory framework to bring their housing stock back up to what is needed.
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