Will the bedroom tax loophole close in March 2014?

Since its introduction in April 2013, the ‘Bedroom tax’ has rarely been out of the news. It’s likely to be back in the news this month if, as anticipated, the current bedroom tax exemption loophole is closed.

Bedroom Tax Overview

The bedroom tax affects housing association and council tenants of below state pension age, who receive housing benefit to pay some or all of their rent. Tenants who live in properties with one or more spare bedroom are subject to a reduction in their housing benefit payments, under the bedroom tax rules.

Housing benefit is reduced by 14% for properties with one spare bedroom and 25% for two. The difference between the amount of housing benefit tenants receive and the rent of their property, must be paid by the tenant themselves. Tenants struggling to afford this can apply for discretionary housing payments which is a short term additional payment made by the council to cover the shortfall. If in the long term tenants are unable to meet the shortfall, they may be required to leave their property.

Expected Bedroom Tax Changes in March 2014

Currently there is a ‘loophole’ in the bedroom tax rules. This allows tenants who have continuosly received housing benefit since before 1 January 1996, and lived at the same property, to be exempt from bedroom tax. It is expected that this loophole will be closed in March 2014 and that tenants in this category will also be subject to the bedroom tax rules. Tenants who are in this situation should seek advice now if they are currently receiving reduced housing benefit due to bedroom tax. They should also seek advice if and when this new ruling comes into effect.

For more information, please contact housing law Solicitor Nicola Ford in Mansfield or Nottingham. Further updates will be provided as and when the ruling changes come into effect.