Since it was introduced in 2013, 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…
Originally, 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 in reality because it didn’t account for the squeeze on housing, the change leaves many of us stuck with a shortfall in our rent that we can’t afford to make up. So we risk falling into arrears and then homelessness.
What is the ‘Bedroom Tax’?
Having one or more spare bedrooms is officially called under occupancy, but the reduction in benefit has become known as the Bedroom Tax.
It means that, 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.
So if we take the average weekly rent of £103 for social tenants in England, this means that you would lose £14.42 from your eligible rent if you have a bedroom that is deemed to be ‘spare’. For two ‘spare’ bedrooms you would lose £25.75.**
*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.
**Average rent in England in 2020
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, such as disability or bereavement, that would count as an exemption. See our Guide to Exemptions here.
Is it the same everywhere?
In Scotland you can apply for a discretionary housing payment (DHP) from your council, which will cover the shortfall. People who are struggling in Wales can also apply for a DHP but it is not guaranteed. And in Northern Ireland there’s funding to make sure that you’re not left worse off because of the Bedroom Tax. Every council receives a pot of money for DHPs but there may not be enough to go around.
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.