Bedroom tax could cost poor families £1400 per year

But an analysis by the National Housing Federation, which represents housing associations, shows for the first time the true extent of the cuts faced by many families.

Based on cuts of up to 25% of a family’s housing benefit that the Government is considering introducing in 2013, a household deemed to be under-occupying a three-bedroom home in England faces losing up to £20.70 a week – or £1076 a year.

Such a household would be forced to choose between going into debt, struggling to meet payments by cutting back on essentials, or trying to move – even if no suitable alternative properties are available.

In London, a family under-occupying a three-bedroom home could have their housing benefit docked by an eye watering £1385 a year – the largest penalty of any region Britain.

And in the North West – the region with the highest level of under occupancy – families living in a three-bedroom property face a cut of up to £955 a year in their housing benefit.

Under the current system, social landlords allocate families a home based on an assessment of their needs. This may mean that teenagers are given their own bedroom and two bedrooms homes may be offered to young couples planning to start a family.

Where a family is out of work, housing benefit covers the rent, which is far lower than in the private rented sector. Under the new size criteria, a family may be penalised for "under-occupying" even where every bedroom in the home is in regular use. For example, benefit may be cut where teenagers have been given their own bedroom, rather than being forced to share.

Separated parents are set to be penalised for keeping a "spare" bedroom for when their children visit. And foster parents may receive a cut even where their bedrooms are occupied by foster children, who for benefit purposes do not count as part of the household.

Anyone deemed to be under-occupying by one bedroom stands to lose up to 15% of their housing benefit and those considered to have two or more "spare" bedrooms – even if they are in use – will lose up to 25% of their benefit. Two thirds of those affected are disabled, the Department for Work and Pensions has admitted.

Federation analysis, using figures produced by the Department for Communities and Local Government, show that the average social sector rent for three-bedroom properties in England is £83 a week. This means affected families face losing between £12 and £20 per week – or between £645 and £1076 a year.

The under-occupation penalty, part of the Welfare Reform Bill, will hit 670,000 working-age families across Great Britain when it comes into force in April 2013. That figure is forecast to rise to 760,000 by 2020 as the state pension credit age increases.

Ahead of the Bill’s Report Stage in the House of Lords, scheduled to begin on December 12, the National Housing Federation is calling on the Government to make the rules more flexible, to allow one additional bedroom above that permitted by the proposed criteria. Crossbench peer Lord Best plans to table an amendment to this effect but it will need the support of peers from across the political spectrum to stand a chance of making the statute books.

David Orr, chief executive of the Federation, said: "We have been deeply concerned about this bedroom tax for some time but these new figures show the damage will be far worse than previously thought.

"Thousands of hard-up families face penalties of up to £1400 a year simply because the Government have deemed their homes are suddenly too big for their needs.

"This will have disastrous implications for huge numbers of people already struggling to make ends meet in the tough economic climate, including foster carers, grandparents, disabled people and smaller families."
   
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3 thoughts on “Bedroom tax could cost poor families £1400 per year

  1. jeremy

    What a great idea! Would release more of the right size properties into the market and stop tenants living in houses too large for their actual needs. Moving them into smaller properties would reduce their overheads by way of lower utility bills etc. that way they would be less poor!
    I personally would like to live in a large country house with a few acres but I know that I cannot afford so don’t do so. If these folk feel hard done by then perhaps we should just stop paying their rent, council tax, tax credits and everything else until they understand that if someone else is picking up the tab they need to live closer to their means. in the private sector, if a family has 3 children but can only afford to live in a 2-bedroom house then the kids share a room same rules should apply in the social sector!

  2. Gordon Bilsborough

    The whole idea isavours of communist Russia after the revolution of 1917. It has not been thought through sufficiently. It is only one step away from penalising people who own their homes from being penalised in a similar manner. In any case, larger houses pay more Council Tax at present. One solution would be to build more social housing. If the Chancellor of the Exchequer is so short of money, why not pull out of Afghanistan now? History has shown it is a war we can never win.

  3. jeremy

    your point regarding council tax – most poor families do not pay their own council tax – you and I pay it for them! Getting them into smaller properties would at least lessen the burden on us the tax payers.
    I fully agree that more social housing is required but building may not be the answer; there are many commercial properties including High Street premises that could be converted easily and cheaply to residential dwellings. Local authorities need to look outside the box, developing a proportion of commercial premises would also bring more people back into our town centres which in turn would generate more income for local businesses and the councils. Mary Portas suggested developing town centre markets but I think there’s enough cheap chinese tat being sold already and as a business owner I would object strongly if a market trader set up outside my premises where I pay extortionate business rates and paid a pittance for the priviledge – I would be furious; if however some of the vacant premises became dwellings I would see that as a positive move!

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