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How to get out of paying bedroom tax

Updated on January 25, 2014

What is bedroom tax?

From April 2013, Bedroom Tax was created. It is in a nutshell tax for having more bedrooms than you need in the eyes of the local authority.

An assessment will be carried out by your local authority to determine the size of property you need (I.E how many bedrooms your family needs) If your home is deemed to be under-occupied, your housing benefit will be reduced depending on the number of bedrooms you under-occupy by, according to new housing benefit rules.

The Bedroom tax applies to all new and existing housing benefit claims.

The reduction rate is currently set at 14% for one spare bedroom and 25% for two or more spare bedrooms. The reduction is worked out as a percentage of your actual rent – not your housing benefit entitlement. This can vary depending on property size and level of under occupation.

Example of under-occupying by one bedroom:

Basic rent = £100

Housing benefit = £50

- 14%

= new housing benefit amount of £36

A question for the Government?

When you claim housing benefit it's stated by the government that you need X amount to live on. So how do they the justify taking a percentage of that to pay the bedroom tax? Surely this means you will not have enough money to live on...

Why had bedroom tax caused such a stir?

  • Bedroom tax hits those who can't afford to be hit as a rule.
  • Two thirds of the households affected contain disabled people.
  • There aren't enough houses for people to downsize.
  • It will cause unnecessary upheaval for many people who have lived their entire lives in a property.
  • Overcrowding will soon become a problem when families expand.
  • Children will lose their private space as they're forced to share with siblings.
  • Forcing families to make distressing and unfair choices.
  • Foster parents may have bedrooms temporarily unoccupied while they wait for new children arrive.
  • The disabled often need extra space for carers or specialist equipment.

You will NOT be affected by the Bedroom Tax if:

  • You are a single person aged 61 years and 6 month or older before 6 April 2013 (you can also be living with a partner of working age).
  • You live in a one bedroom home or bedsit.
  • Your property is shared-owenership.
  • You live in any type of mobile home such as a caravan or houseboat.
  • You're living in a form of supported accommodation.
  • You're homeless or housed in temporary accommodation that is provided by a privately run society or the council.

Labour leader Ed Miliband says people should not have cash withdrawn unless they refuse the offer of a suitable alternative home and most people agree.

There are legal ways to avoid paying bedroom tax, here's how...

Get your spare room reclassified:

Councils and housing associations (particularly Labour led) are reclassifying thousands of bedrooms across Britain as box rooms, studies or non-specific rooms in a aid to help tenants beat the crippling Bedroom tax.

Deputy leader Mr Peter Gruen said “This is a totally perverse tax,”and has reclassified over 850 bedrooms saying “Fair-minded councils cannot simply stand by and see such havoc.”

Can my spare room be reclassified?

Generally your spare room can be reassessed for reclassification:

  • If they're less than 50 square feet.
  • If they're accessible through another room.
  • If they're on the ground floor and not near a bathroom.

You would of course still be required to pay the same rent.

Other reasons you wouldn't have to pay:

  • If anyone in the home needs overnight care.
  • Bedroom size ( if room measures less than 70 sq. ft.)
  • If you have a disabled child/children who cannot share a bedroom.
  • If you're a foster carer.
  • If you have a child studying at university.
  • If you have a child in the armed forces.

If you intend to appeal under any of these basis you will need to state why your appeal is late. Late appeals are accepted if due to ill -health or not being informed you could appeal. Just be sure to inform them of this.

Measuring the size of your box room:

The Housing Act 1985 section 326 indicates that any room measuring under 50 sq ft is not classed as a bedroom, and, any room measuring between 50-70 sq ft is classed as half a bedroom.

Use this template letter to send in to your local council.

This loophole get you all your money back!!!
This loophole get you all your money back!!!

Should you even be paying Bedroom tax?

An error in legislating the implementation of the bedroom tax has accidentally left a number of tenants exempt from the policy.

There are a thousands of people who have been wrongly affected by the bedroom tax who have seen their housing benefit payments reduced since April 2013. These people are now entitled to be reimbursed. They will also be exempted from reductions in future (until the loophole is closed).

  • If you have been living in your property since January 1st 1996 and have been receiving housing benefit concurrently (You are allowed a break of 4 weeks. And, if you went from welfare to work and had to give up within 52 weeks, it would still count as continuous).

Then, you're exempt from paying it and need to contact your local benefits department as soon as possible.

They will ask you to put this in writing and if correct you will be entitled to a full rebate!!!

Guidance issued by the DWP to councils on 8 January 2014 said the department will be taking steps to close the loophole shortly so act now to at least get your refund.

If this applies to you and you intend to appeal:

When you have sent in your pre 1996 letter, to avoid any issues with the council saying they haven't received your letter and the loophole closing and it being too late;

  • Send your letter recorded delivery
  • Send your postcode and initials to RECLAIM.

They will then alert your own MP. So, that if they try to change these regulations you're all covered that you got your letter in on time.

All correspondence should be made via email or in writing, if you hand a letter in personally, ensure to get a receipt. No phone calls!!!

If all else fails...

Apply for a discretionary housing payment.

A discretionary housing payment (DHP) helps top-up your housing benefit if you are facing hardship, including if you have been affected by recent housing benefit changes. But remember that a discretionary housing payment isn't a long-term answer.

Each local council is given a pot of money each year to help people who qualify for housing benefit but are having trouble paying their rent.

A DWP spokesman said: "We are giving councils £150 million this year so that they can help their vulnerable residents and we are monitoring this spending closely to ensure support goes to those who need it.

You can apply for a DHP the same time as appealing. It's important to realise, that even though there are DWP guidelines, each council have their own policy and how they implement it. Many Disabled people, up and down the country (The very people, this government, claim it's to help the most). Are being refused DHP's because their DLA is being used as income.

Advice is for people to formally complain to the head of their council, local MP and local councillors if your council are trying to class your DLA as disposable income.

Already applied but due a refund?

Residents who have already been awarded money from a council's discretionary housing payment fund to cover their bedroom tax reductions will still be eligible for a full refund if the loophole applies. Residents are also under no obligation to return these crisis fund payments.

Help and advice

There's currently a Facebook group up and running giving information and help with appealing the bedroom tax, it has loads of information and sample letters to print off.

You can join here.

Have you been paying bedroom tax unnecessarily?

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    • BristolBoy profile image

      BristolBoy 4 years ago from Bristol

      Great hub which provides a good overview of the situation in the uk. Whilst I sort of agree with the basic principals; such as reducing the benefits bill and freeing up large houses for those who need them eg families I think it definitely has been implemented in the wrong way. I'm not surprised the Tories did it, however I'm surprised their coalition partners (the lib-dems) didn't stand up to them.

    • JoeYoung22 profile image

      Joe Young 4 years ago from Blyth, Northumberland, England

      Great hub, Claire. To highlight your point that there aren't enough houses for people to downsize into, the figures from the London borough of Tower Hamlets show that last year there were 10,000 people on the waiting list for one-bedroom properties, many of who were fleeing the bedroom tax (or, to put the opposite spin on it, were complying with the government's incentive to downsize, in order to free up larger properties). Yet in 2012/13, the number of such properties that became available in the borough was 840. It's a disgraceful situation.