Bedroom tax: why social tenants will soon be taxed on their spare bedrooms

Cliff D'Arcy
by Lovemoney Staff Cliff D'Arcy on 31 January 2013  |  Comments 24 comments

Tenants in social housing with extra bedrooms face big cuts to housing benefit from April. The changes have been dubbed the 'bedroom tax'!

Bedroom tax: why social tenants will soon be taxed on their spare bedrooms

There are over 26 million households in the UK, of which nearly 3.8 million are classified as 'social housing'. These rented homes are owned by local authorities or non-profit housing associations and usually occupied by low-income tenants.

There is a massive waiting list for social housing, with 1.8 million households trying to find shelter in state-sponsored housing. As a result, the Government is under huge pressure to reduce waiting lists while cutting public spending on social housing.

Taxing extra rooms

One way the Government aims to curb the bill for social housing is by imposing a yearly cap on total state benefits paid to working-age households. This limit has initially been set at £26,000 and is already affecting thousands of households, particularly in high-priced London.

However, with effect from April, new restrictions introduced by the Welfare Reform Act 2012 will come into force for council tenants claiming housing benefits. While these will not affect pensioner households, they will have a profound impact on working-age households.

In what's being already called the 'bedroom tax', housing benefit will be cut from April for those tenants who have one or more spare bedrooms in their homes. One extra bedroom triggers a cut in housing benefit of a seventh (14%). Two or more spare bedrooms produce a cut of a quarter (25%).

For example, a family of two adults and two children living in a five-bedroom council house could see their housing benefit cut by 14% with effect from April. This family either have to find the money to cope with this cut or move to a four-bedroom home.

In total, it's estimated that 660,000 households will be hit by the bedroom tax. Of these, perhaps two-thirds contain one or more people with a disability, so these cuts will hit some of the most vulnerable people living in Britain today.

Furthermore, most of the pain from the bedroom tax will be concentrated in the north, Wales and Scotland, rather than southern England. This is because of the larger numbers of one-bedroom and two-bedroom council properties in London and the south east, versus larger council homes in less densely populated (and less affluent) areas of the UK.

What will be the consequences?

For a family receiving, say £100 a week in housing benefit, a 14% cut equates to a loss of £14 a week from April (£728 a year). Likewise, a 25% cut to the same benefit would mean losing £25 a week (£1,300 a year). For many council tenants, this shortfall could mean the difference between heating and eating.

Of course, this coming cut to housing benefit is intended to encourage council tenants to 'downsize' by moving from larger, under-occupied homes to smaller, more affordable social housing.

But people living in social housing (notably those that rely solely or mainly on state benefits for their income, such as the unemployed, disabled and low-paid) are not renowned for living the high life. Many struggle to make ends meet already, particularly when big bills suddenly hit the doormat.

So these cuts are sure to send many thousands more council tenants into rent arrears. With yearly rises in other working-age benefits capped at a below-inflation 1% from 2013 to 2016, the household budgets of welfare claimants will be placed under even greater pressure.

Another problem is that households faced with losing weekly benefits or a spare room could simply expand their family by having another child. While this would enable them to hang onto so-called under-occupied homes, it would raise the bill for Child Benefit and other benefits paid to families with young children.

What's more, families that do agree to move to smaller homes may find that such housing stock simply isn't available in their area. So while being physically unable to move to smaller accommodation, they must carry on paying the bedroom tax. How absurd is that?

Some bizarre examples

Already, the spare-bedroom tax is being criticised as one of the most arbitrary, subjective and ill-thought-out reforms in the history of British social welfare. Here are five ridiculous examples of those social tenants about to be hit:

1. Divorced parents sharing childcare

Divorced or separated parents sharing childcare will be hit. From April, only one parent will be allowed spare rooms. If the other keeps one or more rooms spare for overnight stays from their children, then that parent will be hit by the new bedroom tax.

2. Families with children under 16

Families with two children of the same sex both aged under 16 will also be hit, as both sons (or daughters) must share the same room. A recipe for teenage strife!

3. Families with children under ten

If both children are under ten, then they must share a room, even if they are not the same gender. In other words, under the new rules, little girls and boys living in social housing no longer deserve their own personal living space.

4. Foster carers

Families who usually or occasionally take in foster children will not be given credit for any extra rooms they set aside for children not yet arrived in their care. This seems a horribly cruel way to penalise those selflessly helping society's neediest youngsters.

5. Bereaved families

On Monday, I read of one couple whose beloved seven-year-old daughter died of brain cancer a year ago. For the past 12 months, her grieving parents have kept her room as a 'shrine', exactly as she left it.

Were they to continue to do so from April, their housing benefit would be slashed by £650 a year. In effect, having lost their daughter, they now risk losing the home in which they raised her by being 'financially evicted' to a smaller property.

Will you lose out when housing benefit changes from April? How much do you stand to lose? Please tell us your story in the comments box below!

More on tax:

Middle-income tax dodgers face CPS crackdown

HMRC crackdown on tax-dodging top earners

2012's biggest tax cheats named and shamed

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Comments (24)

  • alanrp123
    Love rating 0
    alanrp123 said

    Myself and my partner live in a 2 bed flat, and I am 69yrs of age, a state pensioer, living on the pittance called a state pension.

    I am registered disabled, and my partner has a life threatening ilness and cannot work.

    Do these new regulations affect us in any way??.

    We use 1 bedroom each, cannot sleep together due to illness.

    Report on 31 January 2013  |  Love thisLove  0 loves
  • fatpiggy
    Love rating 13
    fatpiggy said

    I can see some of the logic here. I own my house and the price I paid for it reflects that it has 3 bedrooms (2 and sneeze, but I can fit a futon in !). Its my tough luck that the second bedroom is empty for 51 weeks of the year. Should I ask my mortgage supplier if I can pay them less for the period of non-occupancy? For the family who lost their daughter, of course I have utmost sympathy for them as they have lost the most precious thing they ever had. But when my father died aged 69 my mum lost most of her world and without him she was unable to cope with the family home and large garden that they had loved and cherished and worked very hard to maintain for 43 years so she had little choice but to sell up and move. She doesn't live too far away but 11 years later never goes past the house as it is still too painful for her but she has successfully moved on and made a new and different life for herself. As for siblings sharing a room, I shared with my sister until she was 15 and I was 13 and it wasn't a problem. My grandmother's siblings were top and tail in their beds - that is really being crowded! People who live in subsidised accommodation are very lucky. They get brand new kitchen and bathrooms fitted at regular intervals, new windows etc. and often have much larger gardens than in the private sector. Generally the properties are pretty well maintained by the landlord. A friend of mine (who earns more than I do!) has a lovely council house. Its like a palace and she keeps it very nice. I had no choice but to rent privately and with my budget, well you can't make a silk purse out of sow's ear!

    Report on 31 January 2013  |  Love thisLove  3 loves
  • Mike10613
    Love rating 626
    Mike10613 said

    These measures will make a few properties vacant in London. MP's can rent them using tax payers money and live closer to their work. Benefit scrounging scum can live up north. Typical Tory policy. An Englishman's home is his castle as long as he is rich enough to fight off all invaders.

    Report on 31 January 2013  |  Love thisLove  0 loves
  • killick_becki
    Love rating 63
    killick_becki said

    I think that the policy makes sense up to a point.

    If there is no option to downsize offered by the council then I think they should not be able to cut the benefits. If there is an option offered and the tenants refuse then cut away - I would go so far as saying cut it 50% per spare room. Obviously people will complain about the accommodation on offer such as "too far away from school" or "in a worse area" but it is their choice to make. A choice on where to live is a luxury that they obviously either can or cannot afford.

    Just like other posters, I too shared a bedroom with my sister until I was 13, the only reason we didn't share after that was because my brother had moved out of the house. Otherwise we would have continued to share until I left home for University.

    Report on 31 January 2013  |  Love thisLove  2 loves
  • r
    Love rating 98
    r said

    I don't think that these rules will apply where a local authority cannot offer a more appropriate accommodation. Where it can offer suitable accommodation, I think it is right that the tenant should be expected to take it - why should the taxpayer have to foot a bill for larger accommodation than that needed?

    As @killick_becki says, I doubt if many local authorities will have sufficient accommodation available; Mrs. Thatcher put paid to that by forcing a sell-off of council accommodation.

    Originally, council housing (as it was called) was provided so that the needy could have a roof over their head but this was frequently abused because, once accepted, tenants did not have to give it up if their situation improved. There were many people like @fatpiggy's friend who were on good salaries and occupied subsidised housing.

    Of course, another party rant from @Mike10613 - I can't see MPs taking up social housing near to Westminster. Why make these useless comments?


    Report on 31 January 2013  |  Love thisLove  1 love
  • markiesla
    Love rating 0
    markiesla said

    Surely this will encourage parents to have more children to fill the room in some cases?

    Report on 31 January 2013  |  Love thisLove  0 loves
  • Janatt0
    Love rating 1
    Janatt0 said

    Here in Leeds, this rule is even being applied to families with offspring at University - presumably the young people are expected to remain in their University accommodation all year and never come home ? Or live on the street if their University accommodation closes for the summer ??

    NB Coalition MPs who claim expenses for London accommodation must be charged if they are claiming for accommodation for more than one person as only the MP needs to be in London - if other families cannot live together, why should the families of Coalition MPs ?

    Will we have anything left of our country when this Government has finished ?

    How long will they continue on their policy of severe cuts (for everywhere but London)

    - when British people start moving to Eastern Europe for jobs ?

    Report on 31 January 2013  |  Love thisLove  0 loves
  • angela96
    Love rating 0
    angela96 said

    We are lucky enough to be able to live in a 2 bedroom council house but being able to buy our own home would have been even better, unfortunately this has been made impossible by market forces pushing up house prices and driving down wages. Is it really fair to penalise people for being poor and force them to leave a place they have made into their home once their offspring have moved out, especially given the economic situation it is possible they may end up moving back in.

    As I work, a full and part time job, bringing in about £13-14,000 a year to support myself and unemployed husband (he gets nothing) I wouldn't lose so much but I have heard rumours that the government intend to tax all social housing tenants for spare rooms not just those on benefits.

    To me this is just a spiteful divide and conquer policy which does nothing to solve the housing crisis that many of us were able to see coming years ago due to being priced out of the housing market very early on. What is really needed is to build more social housing and bring back compulsory purchase on empty private properties, this would also reduce the housing benefit bill.

    Report on 31 January 2013  |  Love thisLove  0 loves
  • kitler
    Love rating 0
    kitler said

    "For example, a family of two adults and two children living in a five-bedroom council house could see their housing benefit cut by 14% with effect from April."

    To my knowledge such a family would only ever be entitled to a three bedroom council house (only two beds if both children were under 10) so they will lose 25% of their housing benefit. (Five bedroom council houses are extremely rare anyway, like the four-beds, they would have been snapped up under right to buy years ago!)

    Report on 31 January 2013  |  Love thisLove  0 loves
  • sodit
    Love rating 135
    sodit said

    Well if one is a tennant, then one cannot expect to have control over the property. If one is a tennant paying a subsidised rent, then one is reduced to the position of supplicant. The socialists wanted every poor person to be in this position, with their goolies in the grasp of the local authorities... thank goodness Mrs. T. sold off council houses and rescued so many of them from this pernicious evil.

    Report on 31 January 2013  |  Love thisLove  0 loves
  • This_is_me
    Love rating 21
    This_is_me said

    Today's LOL:

    "But people living in social housing (notably those that rely solely or mainly on state benefits for their income, such as the unemployed, disabled and low-paid) are not renowned for living the high life."

    There are plenty of them who have sky sports, which I can't afford, smoke, which I don't do and drink, which I don't do.

    Report on 31 January 2013  |  Love thisLove  1 love
  • electricblue
    Love rating 769
    electricblue said

    Why should working families with a good income NOT be paying extra for unused bedrooms if they are in social housing which is far too big for their situation? Those in private rented accomodation pay for what they need at the time, or move on. There are odd special circumstances which should be taken into account, but why should subsidised tenants be allowed to take up valuable housing stock which they don't truly need? I can only judge by what I see here 'Up North', but there are certainly plenty on benefits doing extremely well out of the system. Council rents are pretty low in comparison to private rented in my area, typically £100 - £170 a month cheaper. I don't think this government will get the legislation right, but nor did the last one.

    I was born in a council house in Halifax, but last time I drove past there was a new Range Rover parked outside what is now a very posh private property. Anyone who thinks that society hasn't changed massively since social housing was introduced really needs to have a reality check.

    Report on 01 February 2013  |  Love thisLove  1 love
  • limiilizard
    Love rating 1
    limiilizard said

    The problem with this is that it is completely absurd - the whole point of social housing is that tenants are completely dependent on what is offered by the councils and housing associations - very few are in privately rented accommodation. For many years there has been a shortage of social housing with many families in hostels or b&b's for many months, and if you are already housed then you are a very low priority.

    In other words, if you wanted to move to smaller accommodation to avoid the tax then you would be such a low priority that you would probably never get to the top of the list, as there are a queue of families waiting in temporary accommodation, and again once you reached that maximum limit where you could qualify for a larger house then you would not be likely to get that either.

    Therefore, seeing as most families will have no option to move - they are a captive audience for the tax making this a heartless and [i think] dangerous tax that once again will hit children hardest both money wise and accommodation wise.

    Report on 01 February 2013  |  Love thisLove  0 loves
  • Gladius Primus
    Love rating 1
    Gladius Primus said

    Scrap ALL housing benefits.

    Why should someone get housed by the taxpayer, while everyone else makes the effort to keep a roof over their head? I only got married and started a family when I was financially capable of doing so...a decade later than I wanted to.

    I know the pain of hard times, having been made redundant in midlife, went through 4 years of hell with little/no work (I've earned minimum wage when I can, sometimes nothing when an employer excuses themselves as having no money for wages at the end of the month, sometimes working up to 80 hours a week as I am a machine driven by having to provide for my family and no housing benefits), just relying on savings and my wife's low paying job that mostly went towards the mortgage and insurances. We're still not out of the woods yet, but we've kept out heads above water through sheer hard graft, no vices or holidays and a total of under three month's worth of JSA - which left a bad taste in my mouth even though I was entitled to it. If we'd had my parent's support, things would probably be easier, but they are retired and need financial help themselves.

    I make the sacrifice of moving to wherever I can get work of any duration, including abroad, while my family stays put to give the kids as much stability at school / friends / social life as possible. The nanny state is the reason Europe is not competitive these days, and when the teat eventually dries (and it will), the playing fields will once more be levelled for the benefit of those that pull their weight.

    Report on 01 February 2013  |  Love thisLove  1 love
  • kp5
    Love rating 1
    kp5 said

    I think there are 2 main points to this:

    1 If you have raised your family and all of your children have left home then surely your 3 bedroom council house should be made available for another family who are in the position you were in 30 years ago? You had use of the property when you needed all of the bedroom and is it not fair now to let another young family have this for their family? Where I live there are a number of 3 bedroom council houses that are now only occupied by a couple.

    2 Is there enough 1/2 bedroom properties for people who could downsize to move to?

    We are fortunate enough to have purhcased a 2 bedroom property before the huge rise in prices. I have 2 young sons, aged 8 and 6 who share a bedroom. If there comes a point when they don't want to share anymore then we will have to see if we can afford to move to a 3 bedroom house or not. This may mean moving out of the area where we currently live, depending on house prices. If I had a child of each sex, then they would be sharing now......finances dictate that this would have been our only option. I suspect that this is familiar for quite a number of working familes.....

    Report on 01 February 2013  |  Love thisLove  1 love
  • anonyy
    Love rating 18
    anonyy said

    What about the people who PRIVATELY rent houses.

    I know of people who are renting the biggest house they can get and claim benefits and they have one child. They now live in a three bed house at a cost of £500 a month.

    Why aren't people like this hit with the same brush that social tenants are having to bare?

    Report on 01 February 2013  |  Love thisLove  0 loves
  • yocoxy
    Love rating 152
    yocoxy said

    I want to live in a big house with a couple of spare bedrooms

    I want someone else to pay for it.

    What? You want me to contribute something to the rent because I'm in a bigger house than I need?

    But surely my rent is paid from my benefits?

    Report on 02 February 2013  |  Love thisLove  0 loves
  • Wavemiller
    Love rating 1
    Wavemiller said

    People who work in London can't afford to live in London, because of housing benefits pushing up rents. I think the government should just cancel housing benefits.

    Rents would fall as people would move to where they could afford, Anglesey or Newcastle say. An equal number of people could then live closer to where they work, cutting congestion & travel costs.

    Long term everyone would be a winner, despite the protests of those who think everyone can get a free ride.

    Report on 02 February 2013  |  Love thisLove  1 love
  • r
    Love rating 98
    r said

    @limiilizard: If there was proper management of social housing, surely there would be a more fluid situation regarding availability of different-sized properties? During the course of a lifetime, families grow as children are produced and families would then move into larger accommodation. When the children are grown up and start leaving the home, the parents can move into smaller accommodation. Hence, there is an ongoing supply of various-sized properties available.

    If people want or need to live in state-subsidised housing, why should they have a right to keep an unnecessarily large property, partially at the tax-payers (my) expense, just for sentimental reasons?

    Maybe we should also be looking at the reason WHY there is such a large demand for state housing and see if anything can be done at root level to reduce it?

    I am also sure that the private sector could provide the appropriate acommodation (subsidised as necessary) if the overpowering legislation on landlords was relaxed. I am not suggesting a return to "Rachmanism" - the private sector usually has the finance and initiative to do things better than the government.


    Report on 03 February 2013  |  Love thisLove  0 loves
  • londonschild
    Love rating 9
    londonschild said

    In 1984 the labour oppositions manifesto was described as the 'longest suicide note in history' this lot appear to be preparing their suicide note while still in government. There are many people who still do not realise what is going to hit them in April, precisely the same group hit by the bedroom tax are also going to bit hit by the cap, closure of things like sure start, fare rises etc etc all the governments chickens are coming home to roost there may be a time lag whilst it all sinks in but then there will be an almighty explosion. Many of the people affected by all this are in work specifically in low paid jobs that don't cover food, the rent, childcare costs, travel to name only the most basic things. They will have 2 options give up work or strike for higher wages I hope for the latter or there will be a lot of depressed and desperate people out there. I don't object to paying tax to give people a spare bedroom. I very strongly object to paying tax to subsidise bad employers (shirkers) who won't pay a living wage and are probably dodging their own tax. I forgot the poll tax rises hope your all getting ready to duck!

    Report on 03 February 2013  |  Love thisLove  0 loves
  • The Democrat
    Love rating 26
    The Democrat said

    We now have The Benefit Cap, the Bedroom Tax and the creeping taxation of benefit recipients by some local authorities charging 20% of the council tax due. We also have the freezing of social security rates at 1% for 3 years whatever the rate of inflation and the ability (and desire) to sanction (stop payment) of Jobseekers' Allowance claimants for up to 3 years. All these measures are an attempt to reduce the Welfare bill, which they may well do.

    But as countless studies have shown there to be a strict correlation between health and wealth, what price these measures causing some of the most disadvantaged in our Society being a greater burden on the services of the NHS, the Police, Social Services, the Courts and ultimately the Prison Service? I would suggest that the costs of the latter will outweigh the 'savings' of the former countless times over. That's before the cost of criminality, insurance premiums, additional security measures and the fall out of an even more dangerous society are taken into consideration.

    Report on 03 February 2013  |  Love thisLove  0 loves
  • yocoxy
    Love rating 152
    yocoxy said

    Good thinking The Democrat. Let's give the Chavs more money so that they won't rob us..

    Report on 11 February 2013  |  Love thisLove  0 loves
  • tuttogallo
    Love rating 99
    tuttogallo said

    Look at the national accounts. Social Justice is an admirable goal, but all of the Social Security payments cost a huge amount of money and the economy cannot support it. This is why there are all these cuts.

    The cuts are nowhere near enough to balance the budget and eliminate the deficit. This is because the government has safeguarded areas of expenditure form cuts (e.g. NHS) causing the axe to fall more heavily on other areas (defence and Social Security). All areas should be candidates for cuts (this is how they succeeded in Canada).

    We all have to understand that there is no money. The whole rotten structure is only kept from collapse by constantly borrowing money. This cannot and must not continue.

    By the way it's no good just going after rich individuals, there aren't enough of them to make much difference, although they must of course pay more, up to about 50% of income. After that they just relocate.

    Report on 17 February 2013  |  Love thisLove  0 loves
  • dksanders
    Love rating 2
    dksanders said

    It was officially calculated earlier this year, that being in the EU costs us per year £1,500 Billion! That is the net loss, not how much we put in but get some back, but the net loss.

    If that money was spent on our own hospitals, schools, road repairs, to reduce fuel tax, to house the needy (not EU immigrants); just think how much better off this country would be and then we wouldn't need such cruel and unjust taxes like this one.

    It's about time the people in this country were told the truth about our being part of the EU and did something about it. And before anyone says "yes, but we need the EU to do business" remember, the foreign companies we buy from will still want and need, to sell us their goods, just as the foreign companies we sell to will still need our goods; we will just be able to negotiate trade deals that are in our benefit and not benefit some corrupt and inefficient system and countries.

    Report on 22 February 2013  |  Love thisLove  0 loves

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