Almost 60% of households affected by the “bedroom tax” changes were in arrears as a result of the cut to their housing benefit, an internal Government review has found.
Under the policy, social tenants deemed to have a spare room see their rent eligible for housing benefit reduced by 14%, rising to 25% if they have two or more extra bedrooms.
The review found that there was widespread concern that those affected were “making cuts to household essentials” or incurring credit card or payday loan debts to make up the shortfall.
The Government was accused of “sneaking out” the report on the day of the Cabinet reshuffle, and Labour described the policy as “cruel“.
Some 20% of those affected had paid none of the shortfall and 39% had only paid their landlords part of the money owed, the interim report for the Department for Work and Pensions (DWP) found.
The report found 522,905 households were affected by the policy in August 2013, which equates to 11.1% of social tenancies.
Some 4.5% of claimants downsized to avoid being hit by the measure within the social housing sector within six months of the removal of the spare room subsidy (RSRS) policy coming into force in April last year.
The report found 18% of affected claimants said they had looked to earn more, rising to 50% of those who said they were unemployed and seeking work.
But the report said: “Landlords reported that, five months into the RSRS, 41% of tenants have paid the full RSRS shortfall, 39% have paid some and 20% have paid none.
“There was widespread concern that those who were paying were making cuts to other household essentials or incurring other debts in order to pay the rent.”
Some 57% of claimants were cutting back on household essentials and 35% on non-essentials in order to pay their shortfall.
A quarter of claimants (26%) said they had borrowed money – 21% from family and friends, 3% said they had borrowed on a credit card and 3% had taken payday loans – although it was not known whether they had a history of borrowing for other purposes.
Some 10% had used savings and 9% been given money by their family.
The report said: “Landlords state that they will eventually evict RSRS-affected non-payers, though at the time of the research most were currently only in the early stages of this process.
“Many landlords expressed concern that collecting rent from people who can’t afford to pay whilst in their current circumstances is damaging relations between landlords and tenants.”
The DWP said rent arrears in the social sector were nothing new, around 50% of housing association tenants were in arrears before the RSRS came into force and the latest figures showed arrears were falling.
Officials highlighted the £345 million made available to support people affected by the changes – £20 million of which went unspent.
The department said its wider package of housing benefit reforms were set to save the taxpayer over £6 billion between 2011/12 and 2014/15 and reduce expenditure by £2 billion annually compared to its forecast level.
Work and Pensions Secretary Iain Duncan Smith said: ” This department is delivering some of the biggest welfare reforms in over 60 years, designed to return fairness to the system, and we are on track to make the £6 billion savings we had previously set out.
“At the same time we are helping to make sure our housing benefit reforms have a transformative effect on the lives of those who in the past were faced with a system which trapped people into cycles of workless and welfare dependency.
> The transformative effect evidently being transforming them from being people with a roof over their heads to homelessness.
“The scaremongering by those opposed to our welfare reforms – in particular our housing benefit reforms – has been proven to be without substance, and we are already seeing the effects of people moving into work.”
> We are ? Where ? Oh, to live on Planet IDS…
But TUC general secretary Frances O’Grady said: “The Government has shamefully sneaked out a report, under the cover of the reshuffle, that lays bare the damage wreaked by the bedroom tax.
“It shows how people affected by the tax are simply not able to move and instead are being pushed into rent arrears. As a result, many could end up losing their homes altogether.
“Government claims that the bedroom tax will free up under-occupied housing stock are farcical. The number of households affected by the tax during the first five months of its operation has fallen by less than 5%.
“The bedroom tax is widely feared by tenants and the verdict from landlords and housing support workers is equally damning.
“Fewer than one in ten landlords say that government help for struggling tenants is working well and local authorities report that it is making it more difficult for them to house homeless single people.
“The bedroom tax is one of the most pointlessly cruel welfare policies instigated by a Government that remains determined to take away the safety net that so many rely upon. It is shameful that ministers are now trying to hush up the damage it’s causing.”
Shadow work and pensions secretary Rachel Reeves said: ” Today the Government admitted that over half of those paying the bedroom tax are in arrears.
“This shows their bedroom tax has made life harder for thousands of people. David Cameron should scrap his cruel and costly tax on bedrooms; if he won’t, a Labour government will.”
Source – Berwick Advertiser, 15 July 2014
Human rights group Liberty has announced it has been granted permission to bring a Judicial Review of the Government’s controversial bedroom tax, based on the policy’s impact on separated families with shared custody of children.
The scheme, which has affected the North East, cuts parents’ Housing Benefit if they have a ‘spare room’, even if that room is used by a child who lives with them on a part-time basis. Liberty is challenging the lawfulness of the relevant regulations on the grounds they are irrational and a violation of Articles 8 and/or 14 of the European Convention on Human Rights which stipulate the right to a private and family life and no discrimination.
A High Court Judge has now indicated that it is in the public interest for Liberty’s arguments to be heard and has given permission for the case to go forward.
The human rights group launched the claim in April last year.
Rosie Brighouse, Legal Officer for Liberty, said: “A child’s bedroom is their sanctuary and these parents are providing stable and secure homes, not ‘under-occupying’ their properties. This one-size-fits-all rule discriminates against families outside a certain narrow mould, meaning that our clients represent thousands of parents who want to be part of their children’s lives. A Government who talks of prioritising families should know better.”
Liberty is seeking a ruling that the relevant provision – Regulation B13 of the Housing Benefit (Amendment) Regulations 2012 – is incompatible with its clients’ and their children’s rights under Article 8 and/or Article 14 of the European Convention – and thus unlawful under section 6 of the Human Rights Act.
Source – Newcastle Evening Chronicle 01 May 2014
Newcastle City Council is considering “re-designating” whole tower blocks of two-bedroom flats as one-bedroom properties – because tenants can’t afford to pay the bedroom tax.
Two thirds of council housing tenants are currently behind on their rent, double the number before the bedroom tax was introduced.
The impact of the bedroom tax on families across the city was revealed by Coun Joyce McCarty, deputy leader of Newcastle City Council, when she spoke to MPs. Coun McCarty was giving evidence to the House of Commons Work and Pensions Committee, which is holding an inquiry into how changes to the welfare system have affected housing.
New rules introduced by the Government mean housing benefit is cut for claimants in social housing who are considered to have a spare room. The policy has been dubbed a ‘bedroom tax’ by critics, while ministers say they are ending a ‘spare-room subsidy’.
Coun McCarty said 5,500 households in the city were hit by the policy. And others who weren’t currently affected were desperate to avoid it, even if that meant turning down the offer of a two-bedroom property.
She told MPs: “Because previously people wanted space, we actually pulled down one bedroom flats not that long ago. We are thinking of re-designating complete tower blocks of two bedroom flats as one bedroom flats, because people can’t afford them.”
This would allow tenants to avoid having their housing benefit cut, but it would also mean the council lost money, she said.
“The impact of doing that is huge because that’s a loss of rental income as well.”
“We’ve got lots [of properties] that people don’t want to move in to . . . couples and individuals don’t want to move in to there because they know they’d have to pay additional costs.”
Newcastle had been particularly affected by the change to housing benefit because 23% of residents live in social housing, compared to a national average of just10%, she said.
Your Homes Newcastle, who manage council homes on behalf of the council, visited tenants to make sure they were claiming everything they were entitled to.
“At the moment 66% of our tenants are in arrears, which is double what it would have been before April, so that can be allocated to be the bedroom tax,” Coun McCarty added. “There are about 139 currently pending facing eviction since the bedroom tax was introduced.”
But the council was working with all the tenants involved to try to keep them in their homes, she said. In theory, tenants could move into smaller properties. However, those properties were not available.
“We have 3,500 people wanting to have one bedroom properties now, but each year we probably have 800 free so it will take us several years to reallocate those people.”
Your Homes Newcastle said it was considering re-designating a further 1,200 properties, but could not specify which blocks. Neil Scott, director of tenancy services said: “Newcastle has an unusually large proportion of accommodation in high rise properties. We currently manage 44 blocks over six storeys. The vast majority of properties in these blocks are two bedroom. We have 2,594 two bedroom flats in high rise properties, and 80 of those are available for let.”
Source – Newcastle Journal, 06 Jan 2014