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Nearly half a million households are still subject to the controversial ‘bedroom tax’ affecting social housing tenants, according to new figures.
Responding to a written question from Green Party peer Baroness Natalie Bennett in the House of Lords this week, the Government confirmed that 476,000 households remain subject to the tax.
That means these households lose 14% of their housing benefit if they are judged to have one ‘spare’ room, and 25% for two rooms or more.
The Government has faced pressure over another controversial welfare measure – the two-child welfare limit – which caps Universal Credit for families with more than two children.
Last April, the two-child limit affected 422,000 (55%) of the 772,000 families with three or more children claiming Universal Credit or Child Tax Credit. Just 22,000 households had an exception.
On Tuesday night, the Prime Minister suspended the whip from seven left-wing Labour MPs who rebelled to back a Scottish National Party motion calling for the two-child limit to be scrapped.
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But there has been little debate about the bedroom tax, which was introduced under the Conservative-Liberal Democrat Coalition Government in 2013.
The so-called ‘under-occupation penalty’ – the euphemistic language of the Government which introduced it – means that if a household’s rent is currently £760 a month, their housing benefit is cut by £106.40 a month for one extra bedroom, or £190 a month for two extra bedrooms.
The policy is meant to encourage families to downsize, but given that the social housing stock in Britain has plunged following decades of the ‘Right to Buy’, it has instead been seen as punishing people who have nowhere else to go.
Tenants are also encouraged to get a lodger, but the bedroom tax still applies. They are simply expected to charge more in rent than they lose through the benefit cut.
Responding to the question, Baroness Maeve Sherlock, a Minister in the Department for Work and Pensions, said: “Any future decisions on this policy will be taken in the context of the Government’s missions, goals on housing, and the fiscal context.”
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Baroness Bennett told Byline Times: “Pressure on the Government, from the Green Party and others, has rightly focused on the indefensible two-child [welfare] cap, a policy specifically designed to throw children into poverty. And we are seeing signs of Government weakness in the face of that pressure.
“But that doesn’t mean we can afford to lose sight of the damage done by the bedroom tax, a policy that has thrown families into poverty without freeing up housing, as it claimed it would do.
“Many of the households thrown into poverty – or deeper poverty – by the bedroom tax are unable to find accommodation that will allow them to escape it. Many need to stay in the area they’ve long called home to support children’s schooling, for childcare, and other family support.
“The rules do not adequately allow for family circumstances. They are cruel, inhumane, and the ‘fiscal circumstances’ Baroness Sherlock refers to could be changed by for example, a wealth tax, as the Green Party has consistently been calling for.”
Update 2pm 24th July: In response to a question from Byline Times on this, the PM’s spokesman said the bedroom tax issue is likely to be considered as part of an upcoming review into Universal Credit.
“The manifesto committed to reviewing Universal Credit to make work pay and tackle poverty, recognising the very challenging state of the economy and public finances. Further details will be set out by the Work and Pensions Secretary,” the No 10 official said.
Full Response to Baroness Natalie Bennett by Baroness Maeve Sherlock
“As of February 2024, 476,000 households in receipt of Housing Benefit or Universal Credit housing element were subject to a removal of spare room subsidy (RSRS) deduction.
“The RSRS deductions are based on the claimant’s eligible rent for those in the social rented sector. There is a 14% reduction for those with one extra bedroom and a 25% reduction for those with two or more extra bedrooms. The average weekly deduction for households with one extra bedroom is £15 and £29 for those with two or more extra bedrooms.
“Easements are available to support disabled people and carers, families of disabled children, foster carers, parents who adopt, parents of service personnel and people who have suffered a bereavement.
“Those unable to meet a shortfall in their rent can seek a Discretionary Housing Payment (DHP) from their local authority. DHPs can be paid to those entitled to Housing Benefit or the housing element of Universal Credit.
“Any future decisions on this policy will be taken in the context of the Government’s missions, goals on housing, and the fiscal context.”
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