Housing Benefit

Bedroom tax

In England, Wales and Scotland the “bedroom tax” (also known as the size criteria, under-occupation penalty and “removal of the spare room subsidy”) now applies in the social-rented sector (e.g. council and housing association properties). It replicates the size criteria that applies to Housing Benefit claimants in the private-rented sector under the Local Housing Allowance rules (see page 70). This means that people living in houses larger than “they need” (“under-occupiers”) either have to move to somewhere smaller or make up the difference in rent after their Housing Benefit is reduced as follows:

• a 14% cut in Housing Benefit if there is one “spare” bedroom;

• a 25% cut in Housing Benefit if there are two or more “spare” bedrooms.

The government announced a partial U-turn and exempted foster carers and parents of teenage armed forces personnel from the charge, just three weeks before it was due to come into force. The concessions came in a written ministerial statement after weeks of growing political pressure.

As a result, around 5,000 approved foster carers are exempted from the bedroom tax. Parents whose children live at home but are away on operations with the armed forces are not charged for their child’s “spare bedroom”, as long as their offspring intend to return home.

However, campaigners point out that the concessions exempted only a fraction of the 660,000 people who are affected by the bedroom tax and did nothing for almost half a million households that are home to a disabled person.

The bedroom tax and its impact are examined in more detail in Chapter 6 page 69.

Local Housing Allowance rates

Local Housing Allowance (LHA) rates are now increased in line with the Consumer Price Index (CPI) rather than the market rents in each area. As a result, the connection with actual rents has been lost. See page 70 for further information.