One of the Welfare Reform Act’s intentions, and one Shelter was happy to support, was a pledge to simplify the benefits system. In light of this it is surprising that one particular measure was allowed to survive the bill unscathed, despite being overturned twice by the Lords.
The Act will cut housing benefit for council and housing association tenants if they are judged to be occupying a larger property than they need. The definition of this is incredibly strict and provides no slack for any family with a legitimate need for a bit more space; for example, if a couple cannot share a bedroom for health reasons. Anyone with one ‘spare’ bedroom will see their housing benefit cut by 14%, rising to a substantial 25% cut for two or more bedrooms.
To calculate the penalty the DWP will have to determine the size of the home the family should occupy, and then the number of bedrooms they actually have. The first point sounds simple, but it will exclude children who move between separated parents, may exclude foster children, and imposes a rigid formula on which people should share rooms. If a disabled child is unable to share a bedroom without disrupting a sibling, or a family needs additional space to store vital medical equipment, these needs cannot be taken into account.
Even the assessment of how many bedrooms a home already has is not as straightforward as it may seem – think of homes built with box rooms or parlours – increasing the risk of fraud and error by claimants and creating more confusion and unfairness.
The penalty will apply even if the ‘spare’ room is very much in use. For example, if a family with an eight year old son and nine year old daughter live in a three bedroom home they will be penalised as under-occupiers, even if both bedrooms are stacked to the rafters with homework books and Lego. Perversely, once their daughter turns ten this family would be deemed to deserve the extra room – but not before.
Social tenants who need a little more space won’t be able to shop around for a larger property in a cheaper area – they will face the penalty as long as they have a spare room, even if their rent is especially cheap.
The under-occupancy cut will subject social tenants to the kind of restrictions and cuts that have become common for private renters. The scale of this change does not seem to have been appreciated by DWP, who will impose the cut on 670,000 tenants in one ‘big bang’ from April next year.
We anticipate the coming months will see high demand for Shelter’s services as tenants try to understand what the change means for them, just as cuts to Legal Aid welfare kick in.