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Legal News

Bedroom tax loophole to close (21 January 2014)

Date: 21/01/2014
Duncan Lewis, Legal News Solicitors, Bedroom tax loophole to close

The Department of Work and Pensions (DWP) is to close a loophole in the government’s bedroom tax in March.

The bedroom tax was introduced in 2013 and applied to Local Authority tenants in receipt of housing benefit who had a spare room in their properties.

Bedroom tax regulations refer to “eligible rent” to assess who will face a cut in housing benefits as a result of having a spare bedroom.

However, prior to 1996, different rules applied and as a result, tenants who are working age and have been living at the same council property and continuously claiming housing benefit since before 1 January 1996 do not have to pay the bedroom tax. The loophole could affect as many as 10,000 tenants.

A bulletin issued by the DWP has now signalled that the bedroom tax loophole will be closed.

The introduction of the bedroom tax has caused hardship for many council tenants unable to afford to live on their reduced income as a result. Some have moved to smaller council properties – and in some areas, a glut of empty three-bedroom council properties has been the result, as tenants can no longer afford to rent them.

It is thought that councils may also ban Right To Buy council homes being bought as buy-to-let concerns, after new research has shown that in London alone, one-fifth of council homes bought under the Right To Buy scheme have been let by the purchaser – with a total of 52,000 ex-council homes now in the private rental sector in London alone.

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