A bedroom tax loophole – or is it?
16th January, 2014
A flaw within one of the most controversial shake-ups of the welfare benefits system in recent memory? It sounds almost too good to be true. And I'm afraid it is.
What has happened?
On 8 January 2014, the Department for Work and Pensions issued a circular to local authorities, and other organisations concerned with or affected by Housing Benefit, confirming that certain tenants should not be subject to the bedroom tax.
Who falls within this exception?
If a tenant has been in occupation of the same property and continuously entitled to Housing Benefit since at least 1 January 1996, they should not be subject to the bedroom tax provisions.
It is also possible for tenants to still fall within this exception if there has been a break in their Housing Benefit entitlement of no more than 4 weeks generally, or 52 weeks if the tenant or their partner had been a beneficiary of the Welfare to Work scheme.
Provided that tenants meet these criteria, local authorities must re-calculate the Housing Benefit they were entitled to receive as from 1 April 2013 without the deduction.
What does this mean for me?
Even though this exception is likely to be limited in its application, Registered Providers of Social Housing (RPs) may still wish to review their records to see if they have any tenants who might satisfy these criteria and submit claims for backdated Housing Benefit.
They may also wish to do so quickly – on 14 January 2014, Lord Freud announced that new regulations would come into force in March 2014 to close the loophole.
Whilst RPs will no doubt want to take advantage of the exemption for the limited time in which it remains available, Lord Freud’s comments make clear that the bedroom tax is here to stay.
How can I find out more?
For further details on this exemption or on any other social housing issues, please get in touch.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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