"Bedroom Tax" - Size Criteria in the Social Rented Sector
In April 2013, the Welfare Reform Act reduced the amount of Housing Benefit that people living in the social rented sector can get if they are deemed to have one or more spare bedrooms.
This is commonly referred to as the "Bedroom Tax", under-occupation penalty or social size criteria. It is referred to as the size criteria in this article.
- Size criteria in the social rented sector applies only to tenants of working age.
- Working age means from age 16 up to the minimum qualifying age for Pension Credit. If you are not sure if you have reached the minimum qualifying age for Pension Credit, you can use the DWP's State Pension calculator.
- It applies to people living in council, housing association and housing co-operative homes including Caledonia Housing Association, Hillcrest Housing Association and Fairfield Housing Co-operative.
- A similar scheme already applies to people living in private sector tenancies who are claiming Local Housing Allowance (Housing Benefit for private tenants) and are deemed to have one or more spare bedrooms.
The Department for Work & Pensions (DWP) has admitted an error in existing regulations which means that the social size criteria should not have been applied to tenants who have lived in their properties since before 1 January 1996 and who have been continuously claiming Housing Benefit. The DWP plan to remove this temporary exemption in March 2014 by amending the Housing Benefit regulations.
Perth & Kinross Council Housing Benefits Team has already taken steps to identify cases where the under occupation charge has wrongly been applied and will establish if a refund is due. This should be done automatically and refunds will be issued in due course. If in the meantime, you believe that you may be due a refund, you should email email@example.com or telephone 01738 476049.
What does the Size Criteria in the Social Rented Sector mean?
You will be allowed one bedroom for each of the following:
- every adult couple (married or unmarried)
- every other adult (aged 16 or over)
- any two children of the same sex aged under 16
- any two children aged under 10
- any other child (other than a foster child or child whose main home is elsewhere)
- a child who is severely disabled and unable to share
- a carer, who does not live with you, but provides you or your partner with regular overnight care. You can find out if you count as a "person requiring an overnight carer".
The government also intends to extend the scheme so that approved foster carers will be allowed an additional room, whether or not a child has been placed with them or if they are between placements, so long as they have fostered a child, or become an approved foster carer in the last 12 months.
It is also intended that adult children who are in the Armed Forces but who continue to live with parents, will be treated as continuing to live at home even when deployed on operations. This means that the size criteria rules will not be applied to the room normally occupied by the member of the Armed Forces if they intend to return home.
People requiring an overnight carer
You may have already received a letter from the Housing Benefit section to see if you, or your partner, can be allowed an extra bedroom for an overnight carer. The Overnight Carer leaflet [319kb] gives further information about this. If you think the criteria applies to you, or your partner, please download and complete an Overnight Carer Application form [336kb] and return it to the address stated on the form.
Who will be affected?
All Housing Benefit claimants who are deemed to have at least one spare bedroom will be affected including:
- separated parents who share the care of their children even if they have specifically been allocated an extra bedroom for this
- couples who use their spare bedroom when recovering from an illness or operation
- parents whose children visit and stay overnight but are not part of the household
- disabled people including people living in adapted or specially designed properties.
Where under-occupancy arises due to a death, the size criteria reduction will not apply for a year in order to give bereaved families time to come to terms with their loss and to make the right decisions about their finances and size of accommodation.
What will the reduction to Housing Benefit be?
The reduction will be a fixed percentage of the Housing Benefit eligible rent figure of:
14% for one extra bedroom 25% for two or more extra bedrooms.
If you are affected by the size criteria in the social rented sector, what can you do to minimise the impact?
People affected have a number of options, however not all these options may be suitable for or available to you. You may wish to consider:
- Moving to a smaller property - however due to the lack of available smaller properties in the social rented sector, options to move are very limited and moving to the private sector may not be suitable depending on your circumstances. To get advice about your housing options, you can contact the Housing Advice Centre on 01738 474500.
- Renting out your spare room - this may be an option to some people however it must be noted that although lodgers will count as occupying a room under the size criteria rules, any income from a lodger above £20.00 per week will be taken into account and deducted from means tested benefits. There may also be some risks involved. The DWP has produced a Factsheet giving further information about renting out your spare room. If you are considering doing this, you will need to seek permission from your landlord. If you are a council tenant, you will need to complete a Request for Permission Form - Lodgers [422kb].
- Finding work/increasing hours at work - moving into work or increasing working hours can increase your income and help cover any reduction in Housing Benefit. You may want to visit The Hub - Employment Advice Centre for more information on how Perth & Kinross Council can help you increase your chances of finding suitable employment. You may also qualify for an Enhancing Opportunities Grant. You may also want to register with the UK Government's Universal Jobmatch.
- Reviewing household budgets - you may wish to look at ways of reducing non-essential expenditure. The Money Advice Service has useful information on managing money including lots of money saving tips. The council's libraries can also provide resources to help with reading, writing, numeracy and budgeting. You may also be able to save money on your fuel bills by improving the efficiency in your home.
- Having family members contribute more- if there are non-dependants living in your house, the excess rent may be covered through new or increased contributions made by them.
- Making sure all relevant benefits are being claimed by getting in touch with the council's Welfare Rights Team or an organisation such as Perth Citizen's Advice Bureau who will be able to undertake a welfare benefit check and advise if you are missing out. If you are, you will be given information and advice on how to make a claim.
- Applying for Discretionary Housing Payments (DHP) - this can sometimes be paid to help you meet the shortfall between your Housing Benefit and your rent payments, or if you have expenses connected with moving to more suitable accommodation. There is no guarantee that you will receive a DHP because funding is limited and applications have to be prioritised. Anyone claiming Housing Benefit can apply for a DHP but if you are applying to help meet the shortfall in your rent caused by the size criteria, priority has to be given to certain groups such as disabled people living in significantly adapted accommodation. You can also apply for a DHP for things like removal costs, rent in advance and deposits if you are moving house, for example, to find work or to move from a larger social rented sector tenancy to a smaller one in the private sector. To apply for a DHP, you will need to complete a DHP application form [77kb]. The council also has a Rent Bond Guarantee Scheme which may be able to assist with a deposit to allow you to secure a property in the private sector.
What is Perth & Kinross Council doing to minimise the impact of the size criteria in the social rented sector?
- The Revenues & Benefits Service has identified and written to a number of council tenants to establish if they meet the criteria to be allowed an extra bedroom for a non-resident overnight carer. Those identified as meeting the criteria will not have their housing benefit reduced in respect of the extra bedroom being used by their overnight carer.
- The Welfare Rights Team has embarked on a "Benefits are Changing" publicity campaign in order to make residents aware of the welfare reform changes and urging them to contact the Welfare Rights Team where advisers will:
- give information on the benefit changes
- undertake a comprehensive benefit check and advise people what to claim and how to claim if they are missing out.
The Welfare Rights Team also provides a benefit appeal representation service to those whose benefit claims have been turned down.
- The Housing Service has carried out an extensive exercise to identify those local authority households affected by the social size criteria.
- Perth & Kinross Council has also been allocated additional funding to the Discretionary Housing Payment budget to help minimise the impact of the social size criteria.
What if I fall into rent arrears due to the size criteria?
If your rent is not paid, the money owed is called rent arrears. Rent arrears are 'priority debts' which means the consequences of not dealing with them are serious - there is a risk of eviction. Find out what to do you if you fall into rent arrears.