Bedroom Tax; loophole for thousands of social housing tenants

Written by: Keoghs Solicitors

Date: 6th February 2014

It has emerged recently that thousands of social housing tenants could be potentially exempt from the bedroom tax or ‘spare room subsidy’.  When drafting the new legislation on ‘maximum rent’, the Department of Works and Pensions (DWP) failed to update existing housing benefit regulations dating back to 1996. This means that thousands of tenants are exempt from the new legislated ‘bedroom tax’.

Broadly speaking, to be classified as exempt, tenants must have resided in the same accommodation continually since 1996 and have not had a break in their housing benefit during this time.  Some of the most financially vulnerable tenants have been affected since the bedroom tax was introduced in April 2013 and have been made to pay a charge. More worryingly, a small but significant number have forfeited their tenancies or been evicted. There have even been people who have harmed themselves due to the anxiety and impact of the bedroom tax.

The DWP have estimated the number of affected tenants as between 6,000-7,000, however, experts feel that the number will be significantly higher with potentially up to 40,000 households affected.

Costs of refunds could run into millions of pounds, including compensation for families who have had to move out of their homes. All those affected could potentially be eligible for a refund of at least £640.

The DWP intend to close the loophole in March 2014.  The minister for Welfare Reform declared that ‘The housing benefit regulations will be amended in March 2014 to ensure that all working-age social sector tenants who under-occupy their homes are subject to a reduction in their eligible rent, regardless of the length of their tenancy, unless they fall within one of the limited exceptions.’

However, it is unlikely that the amended regulations will prevent retrospective claims for incorrect charges whilst the loophole was open.

Have you been resident in your home and in receipt of housing benefit, since 1 Jan 1996?

Did you take over the housing benefit on a property after a family member died and they occupied the property pre 1996?

Did you have a short break in claiming housing benefit on the same occupied property for periods of 4 weeks or less?

Have you continuously claimed housing benefit but were forced to move from your home due to flood, fire, explosion or natural disaster?

If you answered yes to any of the above, you may still be eligible for exemption. Keoghs Nicholls Lindsell & Harris can assist you in identifying whether you are exempt and can act for you in any future proceedings.