All About Bedroom Tax

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bedroom tax

The bedroom tax, also known as the “under-occupation charge” or “removal of the spare room subsidy,” is a policy introduced by the UK government in 2013. It aims to reduce the amount of housing benefits paid to social housing tenants who have more bedrooms than they need. In this article, we will provide a detailed explanation of the bedroom tax, its impact, and how it affects individuals.

What is the Bedroom Tax?

The bedroom tax is a reduction in housing benefits paid to social housing tenants who have one or more spare bedrooms. The amount of the reduction depends on the number of spare bedrooms. For example, if a tenant has one spare bedroom, their housing benefit will be reduced by 14%. If they have two or more spare bedrooms, their benefit will be reduced by 25%.

The bedroom tax affects social housing tenants who rent their homes from local councils or housing associations. It does not apply to private tenants or those who rent from private landlords. The policy is designed to encourage tenants to downsize to smaller properties, freeing up larger homes for those who need them.

How the bedroom tax might affect you?

The Bedroom Tax, also known as the Under-Occupation Penalty, is a policy introduced by the UK government to reduce the amount of housing benefit or Universal Credit paid to tenants who are deemed to be under-occupying their social housing. Here are some key points to consider:

Who is affected?

  • You may be affected by the Bedroom Tax if you are of working age (between 16 and pension age) and renting from a local authority, a registered housing association, or other registered social landlord.
  • If you are a member of a couple and just one of you has reached pension age, you may still be affected.
  • You are not affected if you have both reached pension age.

How is the Bedroom Tax calculated?

  • The Bedroom Tax applies if you have a spare bedroom and your Housing Benefit or Universal Credit is reduced accordingly.
  • The amount of reduction depends on the number of spare bedrooms and your individual circumstances.

What are the potential consequences?

  • Reduced Housing Benefit or Universal Credit payments, which may lead to difficulties in paying rent and other living expenses.
  • You may need to consider downsizing to a smaller property or finding alternative accommodation.
  • You may be eligible for a Discretionary Housing Payment (DHP) or other forms of financial assistance.

What can you do?

  • Check your eligibility for a DHP or other forms of financial assistance.
  • Consider downsizing to a smaller property or finding alternative accommodation.
  • Review your budget and prioritize your expenses to ensure you can still meet your rent payments.
  • Consider renting out a spare room to generate additional income.

How Does the Bedroom Tax Work?

The bedroom tax is applied to the housing benefit or Universal Credit paid to social housing tenants. The reduction in benefit is calculated based on the number of spare bedrooms in the property. For example:

  • 1 spare bedroom: 14% reduction in benefit
  • 2 or more spare bedrooms: 25% reduction in benefit

The reduced benefit amount is then deducted from the tenant’s housing benefit or Universal Credit payment.

Who is Exempt from the Bedroom Tax?

Some individuals are exempt from the bedroom tax, including:

  • Pension age individuals (those receiving a state pension)
  • Foster carers
  • Parents of children who are away at university or in the armed forces
  • People with disabilities who require an extra room due to their condition

Impact of the Bedroom Tax

The bedroom tax has been widely criticized for its impact on vulnerable individuals and families. Some of the negative effects include:

  • Increased poverty and financial hardship
  • Increased stress and anxiety
  • Reduced ability to afford basic necessities, such as food and healthcare
  • Increased homelessness and overcrowding

How to Deal with the Bedroom Tax?

If you are affected by the bedroom tax, there are several steps you can take:

  • Consider downsizing to a smaller property
  • Take in lodgers or sub-let a spare room (note: this is illegal for social tenancies)
  • Apply for discretionary housing payments (DHPs) to help with the shortfall
  • Seek advice from a housing charity or advisor

Conclusion

The bedroom tax is a complex and controversial policy that has had a significant impact on social housing tenants. While it was introduced to reduce the cost of housing benefit, it has disproportionately affected vulnerable individuals and families. By understanding the bedroom tax and its implications, you can take steps to mitigate its effects and find alternative solutions to manage your housing costs.

FAQs

What is Bedroom Tax

The Bedroom Tax, also known as the under occupancy charge or spare room subsidy, is a policy introduced in 2013 as part of the Welfare Reform Act 2012. It reduces the housing benefit or housing costs element in Universal Credit for tenants in social housing who have one or more spare bedrooms.

How much will I lose in benefits? 

If you have one spare bedroom, you will lose 14% of your entitled Housing Benefit or housing costs element. If you have two or more spare bedrooms, you will lose 25% of your entitled Housing Benefit or housing costs element.

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