Bedroom tax – benefit changes explained

The bedroom tax is also known as the under-occupation penalty and it actually refers to a benefit cut rather than an actual tax or penalty.

The Welfare Reform Act 2012 introduced the changes which mean a benefit cut for an estimated 660,000 working social tenants.

How does the bedroom tax work?

From 1 April 2013, size criteria will apply in the social rented sector (eg council and housing association properties). This means that people living in houses larger than they need (under-occupiers) will have to move to somewhere smaller or make up the difference in rent because their Housing Benefit will be reduced:

  • by 14% of the rent charged if you under-occupy by one bedroom
  • by 25% of the rent charged if you under-occupy by two or more bedrooms

This is only for working-age people. The size criteria is as follows

  • 1 bedroom for each adult or adult couple plus
  • 1 bedroom for every 2 children under the age of 10 (regardless of gender)
  • 1 bedroom for every 2 children under the age of 16 if they are the same gender
  • 1 bedroom for any other child
  • 1 bedroom for a non-resident carer if providing care for the tenant or their partner

You can read more information on the National Housing Federation website.

What about students studying away from home?

The NHF says households where there is a room kept for a student studying away from home will not be deemed to be under-occupying if the student is away for less than 52 weeks (under housing benefit) or six months (under Universal Credit) – and the local authority accepts that the household is still the student’s main home.

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