Monday, 17 June 2013

The impact of the 'Bedroom Tax'

I've done an interview for Spotlight and Radio Cornwall about the impact of the 'bedroom tax' here in Cornwall. About 40% of those hit by the change in the rules have gone into rent arrears since the change in the law.

The bedroom tax, or spare room subsidy - pick your own euphemism - is aimed at penalising those who claim housing benefit but live in a property which has more bedrooms than they need. So if you are a single person but live in a two bed flat and claim housing benefit then you are deemed to be under-occupying and you will be penalised 14% of your housing benefit.

This is all aimed at encouraging people to move to smaller properties and freeing up the larger homes for those families who need them - and there are many of these.

That's all very well in theory. But it relies on there being a good supply of smaller homes in the right areas. Here in Cornwall we don't have an endless supply of one and two bedroom homes and I don't think it is reasonable to expect someone to move from Launceston to Penzance in order to down-size.

There are also problems with disabled adaptations. People who have disabilities and have had their homes adapted to help them live independently would have to see their smaller properties adapted likewise. This often means ripping out one set of expensive adaptations and spending a lot of money and time re-fitting them elsewhere. The cost of doing so would usually massively exceed the money saved in downsizing. And there are some technical difficulties such as what constitutes a bedroom and who counts as a member of the household when it comes to evaluating the property size needed. 

There are 962 households who are Cornwall Council and Cornwall Housing tenants who are currently affected by the bedroom tax. At the end of May 2013, 370 additional households were in arrears (603 households in total but 233 were already in some arrears as at 01/04/13) the other 359 households were either up to date or had a credit balance. And these figures do not include any other Housing Association tenants across Cornwall who may also have been affected by this benefit change.

There is also the impact of other changes - such as cutting the top rate of council tax benefit - which are affecting many people in Cornwall.

What the council and others is committed to doing is to help anyone in rent arrears or other financial difficulty. We cannot afford to write-off money owed. But we can help to make sure that people are claiming all the benefits to which they are entitled and we can help residents organise their finances and budget properly. We can also try to help people move to smaller homes if they are available. The last thing we want to see is people losing their homes because of rent arrears. but the council can only help if we know someone is facing difficulties. If this affects you, please get in touch with your local One Stop Shop who can point you in the right direction.


Mick said...


A very interesting post, you touch on the council tax changes as these are impacting people in cornwall too - the difference with this one is that the council chose to bring in this scheme and i know that you for one opposed this under the old regime - is this scheme in to stay or are you allowed to lead a campaign to reverse it for next year as you are so dead against it)??

Alex Folkes said...

The first thing we will do is assess the impact of the Council Tax Benefit/Subsidy changes individually and as part of the wider welfare changes. If we can see there is a distinct impact of the CTB change and if we can find the money to make things better then I would like to try to do so. But still early days. What we cannot do is alter the system in-year.