Bedroom tax

Thebedroom taxis aUnited Kingdomwelfare policy whereby tenants living inpublic housing(also called council or social housing) with rooms deemed "spare" experience a reduction inHousing Benefit,resulting in them being obliged to fund this reduction from their incomes, move home, or face rent arrears and potential eviction by their landlord (be that the local authority or ahousing association). The policy was introduced as part of theWelfare Reform Act 2012passed during thePremiership of David Cameron.Bedroom taxis the most commonly used term for the policy, especially by critics of the changes who argue that they amount to a tax because of the lack ofsocial housing(or in some areas, any rented accommodation) for affected tenants to downsize to (and the refusal to accept the risk of taking inlodgers). The bedroom tax is also referred to as theunder-occupancy penalty,under occupation penalty,under-occupancy charge,under-occupation chargeorsize criteria.

In 2016 it was announced that the penalty would be extended to pensioners. Caroline Abrahams ofAge UKsaid: "Imposing the cap on older tenants will not only cause them anxiety and distress, it is also pointless given the lack of affordable housing options available to them".It has not been applied to pensioners.

Supporters of the changes have referred to the unreformed system as a "spare room subsidy"whereby tax-payers are said to have been subsidising social-housing tenants living in houses larger than they needed. The stated intention of the under-occupancy penalty policy was to reduce these costs and to ease housing shortages and overcrowding.

A similar policy was enacted by the precedingNew Labourgovernment during the decade beforehand in private-sector housing, as theLocal Housing Allowance,without attracting controversy. The 2012 legislation essentially represented an equalisation of treatment ofbenefit claimants,regardless of whether they live in private tenancies or social housing. The reforms formed one part of the2010–2015 Coalition Government's wide-ranging welfare-reform agenda – sometimes known as theUnited Kingdom government austerity programme– which included the introduction ofUniversal Credit,the introduction of awelfare capto limit the total size of the welfare bill, reform of theCouncil Taxand the introduction ofPersonal Independence Paymentsto reform of disability benefits.

Policy

The under-occupancy rules apply, from 1 April 2013, to all those of working age. The policy applies to working-age social housing tenants who receive housing benefit and are deemed to have more bedrooms than they need. If a tenant has one spare bedroom, their housing benefit is reduced by 14% of the eligible rent, and if they have two or more spare bedrooms, it is reduced by 25%. The aim of the policy was to encourage social housing tenants to downsize to smaller properties, freeing up larger homes for families who need them.

Critics argue that the policy has had a disproportionate impact on disabled people and other vulnerable groups, as well as increasing poverty and homelessness. Supporters of the policy argue that it is a fair way to manage social housing and encourage efficient use of housing resources.

The rules for calculating allowed bedrooms are the sameas for Local Housing Allowanceintroduced by the Labour government in 2008 for benefit claimants in private sector tenancies, except for the rules involving disability or the armed forces.

One bedroom is allowed for each of the following:

• An adult couple
• Each other person aged 16 and over
• Two children of the same sex under 16
• Two children who are under 10 regardless of sex
• Any other child (other than a foster child whose main home is elsewhere)
• A non-resident carer (or group of carers) for a person in the house requiring overnight care
• Where a room is required by a disabled child who is unable to share a bedroom

Exemptions

A number of types of housing are exempt from the changes. These include those living in temporary accommodation, shared ownership accommodation and non-standard accommodation such ashouseboatsand mobile homes.

There is a further category of exempt accommodation defined as "accommodation provided by a housing association, a registered charity or voluntary association where that body, or a person acting on its behalf, also provides the claimant with care or support" (supported housing), "or supervision" (sheltered housing).TheUK Supreme Courtruled in 2019 that failing to provide a bedroom for the partner of a severely disabled tenant was a breach of that partner's human rights to a home. A room is needed in that tenancy for the disabled partner's medical equipment.

If a "spare" bedroom is created following a death then a council tenant's housing benefit will not be reduced until a year after the death.

The Welfare Supplementary Payments (Amendment) Bill provides protection to around 37,000 households in Northern Ireland.

Rationale

The official rationale of the policy is to encourage council tenants of homes that are supposedly too large for their needs to move to smaller homes so that the existing housing stock can be better used. A second rationale adopted by the Department for Work and Pensions is to reduce the overall housing benefit bill.

In 2012, speaking in the House of Lords,Lord Freudstated:

I remind noble Lords of the core argumentation. We do not think that taxpayers should be expected to meet the cost of somewhere approaching 1 million spare bedrooms, a cost of around £0.5 billion every year. Clearly this is unfair, or certainly different, to those in the private rented sector who receive benefits based on their household need.

Public opinion

In a November 2013, opinion poll carried out byIpsos Morifound that more of the public supported than opposed the reduction of housing benefit for under-occupying social housing tenants.The policy was most popular among owner occupiers and least popular among social renters.In July 2014, aYouGovpoll found that 49% of people opposed "the bedroom tax" and 41% supported it.

Positions of political parties

Conservatives

TheConservative Partyhas tended to refer to the under-occupancy penalty as the removal of a "spare room subsidy" (implicitly taking into consideration the entire housing benefit paid out for the tenancy, rather than the net payment made by the tenant). Writing inThe TelegraphConservative MinisterIain Duncan Smithhas argued:

We need to put an end to the unfair situation where the taxpayer is subsidising people to have homes, paid for by the state, with spare rooms they do not need. This is effectively a spare room subsidy. Britain cannot afford it and nor can the taxpayer.

Liberal Democrats

As members of the Coalition government, theLiberal Democratsleadership supported theWelfare Reform Act 2012.However, of the party's 57 MPs, 38 voted in favour, 18 abstained and one, Manchester Withington MPJohn Leech,who was the first MP to speak out against the bill, voted against.At their 2013 Spring Conference, members voted to review the policy that looks at the "money saved, costs incurred and the effect on vulnerable tenants".In March 2014Inside Housingreported that the Liberal Democrats plan to end the "bedroom tax" for all except those who refuse a suitable and reasonable offer of accommodation.This represents a change in position as the party voted against a similar amendment to the 2012 Welfare Reform Act. Liberal DemocratTim Farron(at that time President of the party) has also criticised the distorting effect that the under occupancy changes have on the market.Following their change in policy, the Liberal Democrats voted with Labour on 5 September 2014, for Lib Dem MPAndrew George'sprivate members billto restrict the number of cases in which the penalty could be levied.

In their2017 general electionmanifesto, the Liberal Democrats declared their intention to end the bedroom tax.

Scottish National Party

In their2015 general electionmanifesto theScottish National Partystated that: "We will vote for the immediate abolition of the unfair bedroom tax".

Labour

TheLabour Partypledged to repeal the act had they been elected in 2015.

Other parties

The under-occupancy penalty is opposed by theTrade Unionist and Socialist Coalition,theUK Independence Party,theBritish National Party,theGreen Party of England & Wales,Plaid Cymru,theDemocratic Unionist Party,theSocial Democratic & Labour Party(SDLP),theAlliance Party of Northern Ireland,theUlster Unionist PartyandSinn Féin.

Reaction

Protesters opposing the under occupancy penalty outside the Scottish Parliament. The term "bedroom tax" is used by critics to describe the changes to social housing occupancy rules.

In August 2013,The Independentnewspaper released figures which (it argued) showed that 96% of the people who would be affected by the changes would be unable to move anywhere else due to the lack of available social housing.Although it is illegal to sub-let a social tenancy, it is legal for social tenants in this situation to take inlodgers,to cover the extra cost. This is encouraged by the government; potentially, this provides the tenant with a net profit, and reduces the total number of people seeking alternative accommodation.

The under-occupancy penalty has been criticised for potentially costing more than it saves by forcing individuals into the private rented sector, where rents are higher, thereby increasing the cost to the taxpayer.TheNational Housing Federationhas estimated that the housing benefit bill could increase by £143 million if affected tenants were to downsize by moving into smaller privately rented accommodation. However the Government argues that freeing up social housing would also reduce the cost of housing people in expensive temporary accommodation; since those people would be more likely to find themselves in overcrowded accommodation as compared to those affected by the penalty, the combined impact should be to reduce net costs, and reduce net overcrowding.

Impact of death

Michael Rosenwriting inThe Guardianhas criticised how, under government proposals, parents living in social housing could become liable for what he calls the bedroom tax after only three months following the death of a child, something that inadvertently causes the creation of a "spare" room.In March 2015,The Daily Mirrorreported that a woman had become liable for the bedroom tax after her son's death from a brain haemorrhage following an assault.

Effect on disabled people

The changes in housing benefit have been criticised for having a disproportionate effect on disabled families. Two-thirds of individuals affected by the under-occupancy penalty are disabled.Historically, most care and support for disabled individuals was provided bylocal councils,andtheir predecessors,rather than central government; in consequence there is an expectation from the government that costs arising out of care needs, including extra bedroom space, should be met by local council budgets. However, over the 20th century, central government took over the cost of providing benefits that cover housing costs; therefore, the government provided a new annual grant to councils, so that they can makediscretionary housing paymentsfor disabled people in this situation. The government has recently merged this grant into the general funding provided to councils.

Legal challenges

In July 2012, the High Court rejected the premise that the policy was a breach of Article 14 of theEuropean Convention on Human Rightsdue to the effect on disabled people.

In January 2015, it was announced that theSupreme Court of the United Kingdomwould rule in March 2016 on whether the "bedroom tax" was illegal on the basis that it unfairly discriminated against disabled adults.

In May 2015, a father successfully challenged the penalty at atribunal.The father had separated from his partner but was able to argue that his "spare" room was occupied by his son who stayed with him three nights a week. However, it was believed that the Government would challenge the ruling.

In February 2016, a decision by the Upper Tribunal involvingStevenage Borough Councilconsidered the question of what constituted a room for the purposes of the regulations. Judge Lloyd-Davies decided that a room "should be capable of accommodating a single adult bed, a bedside table and somewhere to store clothes, as well as providing space for dressing and undressing". This implies a minimum size of 65.81 square feet for a rectangular room.

On 13 November 2019, according to theGuardian,the Supreme Court ruled that "applying a 14% housing benefit reduction to a man, referred [sic] only as RR, was a breach of his right to home under the Human Rights Act. RR’s partner is severely disabled so 'it is accepted' that the couple need an extra bedroom for her medical equipment,Lady Halesaid ".

In 2019, theEuropean Court of Human Rightsruled the bedroom tax discriminatory and incompatible with Article 14 in conjunction with Article 1 Protocol 1 of the European Convention on Human Rights.

Case law

• Lall v Westminster City Council
• SSWP v David Nelson and Fife Council
• Rutherford v Secretary of State for Work and Pensions
• Bolton Metropolitan Borough Council v BF (HB)
• RR v Secretary of State for Work and Pensions(2019)

Effect

In 2015,Channel 4reported that the Bedroom Tax lowered the quality of houses and created "ghost towns"in the North of England.A 2018 study found the bedroom tax "was not successful in encouraging residential moves", but "it did incentivise people who moved to downsize – suggesting some success in terms of one of the policy goals, namely reducing under-occupancy. The policy did not incentivise people to work more and we find no statistically significant effects on households' food consumption or saving behaviour".

The Centre for Housing Policy at the University of York concluded that the under-occupation policy has saved money, but that the potential savings forecast by the Department for Work and Pensions have been overestimated.The use ofDiscretionary Housing Paymenthas partly reduced the savings predicted for the penalty.

In July 2014, a report was published by the DWP that said only one in twenty claimants affected by the change had downsized their property. A study published four months earlier had similar results.

The report also showed that there has been great demand for downsizing properties but there has been nowhere near sufficient supply of suitable sized housing.

In response to this report, the Liberal Democrats signalled a change in their support for the policy, with both Nick Clegg and Danny Alexander stating that they would like to see changes to the way it is implemented.

See also

• Welfare state in the United Kingdom

External links

• House of Commons briefing paper – under occupation of social housing