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Bedroom Tax

Millions of tenants have been charged with the ‘Bedroom Tax’, which the government hoped would discourage renters from staying in properties bigger than they need. It proved to be more complex than that…

When introduced, the Bedroom Tax was described as ending the ‘spare-room subsidy’. The government said it would no longer pay full housing benefit for claimants to live in council or housing association properties that were bigger than they needed. But while the housing crisis continues, with millions on waiting lists for homes to be freed up, the policy hasn’t worked as planned. It didn’t account for a lack of smaller places to move to or landlords’ refusal for tenants to move if they were in arrears already. What remains are thousands of tenants forced to pay extra.

What is the ‘Bedroom Tax’?

The Government wants to encourage people to ‘downsize’ and make room for larger families, so it will no longer pay benefit to cover spare bedrooms. Having one or more spare bedrooms is officially called underoccupancy, but the reduction in benefit has become known as The Bedroom Tax.

Under the new rules, if you are a working age benefit claimant and have a spare bedroom, your eligible rent will be reduced by 14p in every pound. If you have two or more spare rooms you will lose a quarter (25p in every pound) of your eligible rent* from your Housing Benefit.

(*Eligible rent is the term used for the rent from which Housing Benefit is calculated, and is usually the same as the rent charged. Housing Benefit will not cover some services such as food or cleaning, that are sometimes included in the rent in sheltered housing or similar accommodation.)

Does the Bedroom Tax apply to me?

To work out how many spare rooms you have, children under 16 of the same sex will be expected to share a room, and children under 10 of different sexes will also be expected to share. If you have non-dependent adults living with you (including grown-up children) their room will be treated as spare when it comes to working out your Housing Benefit. The Government assumes they will pay you some rent.

To see how you will be affected, use our handy Bedroom Tax calculator. Just put in your number of bedrooms, and tell us about the occupants of your house, and we’ll calculate if you’ll be charged and what the impact will be on your Housing Benefit.

Might I be exempt?

You might be. There are lots of reasons an extra room is absolutely necessary for tenants. It’s always worth checking the list of exemptions but also asking an advisor with Citizens Advice or employed by your landlord, if you have one. The local council housing office might also be able to point you in the right direction. See our Guide to Exemptions here.

What can I do?

For people affected, Quids in! has put together a 5-point guide to see what options they can explore to offset the impact of the Bedroom Tax. We know most people are stretched to the max but it’s always worth checking we’ve done all we can to keep our heads above water. Click here to check out our Guide.

We also have a free leaflet that can be downloaded here, which explains how the Bedroom Tax works and how much it might cost you.