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More problems with the bedroom tax and why it will add to the welfare bill

On his SPeye blog, Joe Halewood has been running a series of posts on the many problems with the bedroom tax. They are all definitely worth a read. In this post, he challenges some of government's assumptions on underoccupation:

I went back and re-read the coalition impact assessment on the bedroom tax this week.

The first thing to note is that the DWP refer to the bedroom tax as an under-occupation issue.

This is taken directly from the DWP website:

“The Welfare Reform Act 2012 announced that the current rules for the size of accommodation that Housing Benefit will cover in the private rented sector will be applied to working age tenants renting in the social sector.

From April 2013, all current and future working age tenants renting from a local authority, housing association or other registered social landlord will receive Housing Benefit based on the need of their household.

The size criteria allows one bedroom for each person or couple living as part of the household with the following exceptions:

  • Children under 16 of the same gender are expected to share
  • Children under 10 are expected to share regardless of gender
  • A disabled tenant or partner who needs a non-resident overnight carer will be allowed an extra room.

This means those tenants whose accommodation is larger than they need may lose part of their Housing Benefit. Those with one extra bedroom will have a 14 per cent reduction applied to their eligible rent and those with two or more extra bedrooms will have a 25 per cent reduction applied.

Further Information can be found in the impact assessment: Under-occupation of social housing – impact assessment.

So while we all know it as the ‘bedroom tax’, it is officially called under-occupation.

But this is a nonsense. Take this simple example:

The Smiths are a couple with two sons aged 13 and 15.

A) The Smiths rent a property with 1 double "bedroom" and 2 x single "bedrooms." This is known as a "3 bed/4" in housing jargon – a 3-bedroom property that is meant to be occupied by 4 people. Which it is.

Yet they have 3 bedrooms and so are penalised with a 14% reduction in HB

B) The same household could rent a property with 2 double sized bedrooms – a "2 bed/4" to accommodate their family and they would not be penalised under the bedroom tax - they rent just two "bedrooms" and so are not penalised by the bedroom tax.

You can make the argument that in example A - the 3 bed/4 - the two boys have a room of their own when they could share and so the bedroom tax has some sense of ‘fairness.’ Yet it also means having a room each could cost about £22 per week in London – a tax of £22 per week or £1,144 per year.

The size criteria is on the number of bedrooms and not the occupancy or household composition. It would be incorrect to label this as an occupancy charge. Rather it is quite correctly called a bedroom tax. It could be that the 2 double sized "bedrooms" in the 2 bed/4 could be larger in area than the 3 bed/4 and the rents could well be the same level too.

And as I have argued before - if the 2 single ‘bedrooms’ or just one of them is less than 70 sq/ft - then they are not bedrooms. That is because they are under the minimum bedroom size (MBS) - as so many of the smaller ‘bedrooms’ rented in social housing are 9 x 7 and thus below 70 sq/ft.

This is an issue of classification. It's about the way that the landlord defines a ‘bedroom.’ It's a size definition of what constitutes a bedroom based on the subjective view of the landlord. Just because a landlord gives the Smiths a tenancy agreement that says it is a 3 bed/4 doesn’t mean that is what it is and housing benefit departments at local authorities cannot simply rely on the landlord's subjective view of what the property comprises. A tenancy agreement can state the moon is made out of cream cheese …until a court decides otherwise - just as it can say the tenure is a bare licence when in fact a court can rule it to be a secure tenancy.

Here is where I have a huge issue with the bedroom tax in operation. When it comes in the Smiths' dispute that the bedroom tax applies in the 3 bed/4 they rent as (a) the 3rd ‘bedroom’ is only 9 x 7 and so is not a bedroom and/or (b) the Smith household is made up of 4 people and so how can they be under-occupying a property meant for 4 people? I foresee every such example of this being challenged and rightly so - on the simple arguments that the MBS means one or more of the ‘bedrooms’ is not a bedroom AND they are not under-occupying.

The bizarre and highly irrational aspect (and I mean irrational in a legal sense too) of the bedroom tax is that is says under 16s should share a ‘bedroom’ and that each under 16 is counted as half a person - meaning that a 2 bed/3 is suitable. It says this is the correct ‘need’ – a double for the parents and a single for the two boys. But what if that ‘single bedroom’ is 9 x 7, or any size below 70sq/ft? The Smiths still have a legal challenge on the definition of a bedroom.

Add to this that the housing benefit department of the local authority must investigate any disputed decision - and then ask the landlord to confirm what they classify the property is in writing.

This means that the social landlord is being asked if it believes that a 9 x 7 room is suitable for two teenagers to share – a subjective judgement. The social landlord will also know that such a size of room breaches many housing regulations and guidance and so is being asked to confirm in writing, as part of a formal dispute that could end up in the Upper Tribunal (High Court), that this is acceptable. The social landlord – directly through the bedroom tax policy – is exposing itself to legal actions and legal costs.

There is also the fact that the social landlord is incurring the wrath of its customer - the tenant - by appearing complicit in what is rightfully called a bedroom TAX. The social landlord also knows - with its financial head on - that any bedroom tax deduction leads to an increased risk of arrears and added cost to the business. This ultimately leads to eviction and higher cost to the same local authority - in terms of temporary accommodation for the now homeless Smiths discussed above.

What the bedroom tax does is transfer risk and cost to tenant, landlord and local authority…and in the above example created by a misnamed under-occupation policy where the family is not under-occupying!!

Reader, are you still following this bemusing and surreal situation? Don't worry. There’s much more to come.

Read the full post here.

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