NIFHA called today (1 Nov) for a six month postponement to the introduction of the under-occupation penalty or ‘bedroom tax’, a welfare reform due to be introduced in April 2013 that will affect 32,000 households living in social housing.
Also, to lessen the impact of the £17 million annual loss in Housing Benefit social tenants in Northern Ireland are facing as a result of the penalty, NIFHA believes a significant increase in the £7 million funding for Discretionary Housing Payments is needed.
Under the bedroom tax, households in social housing that are considered to have more bedrooms than they need will have their Housing Benefit cut by 14% a week for ‘under-occupying’ by one bedroom and 25% for under-occupying by two bedrooms or more. For the average Housing Executive tenant this will result in weekly reductions in Housing Benefit of £8.25 and £14.70 respectively, equating to annual reductions of £429 and £764 respectively.
Northern Ireland’s social housing stock is overwhelmingly family homes with three bedrooms or more. This means there is a very limited number of smaller social homes for affected households to downsize to in order to avoid the cut in benefit.
Although the fund for temporary Discretionary Housing Payments (DHPs) has been increased to £7 million in anticipation of greatly increased demand when the bedroom tax is due to be introduced in April 2013, this still leaves an annual shortfall in housing support of over £10 million as a result of the penalty.
In Great Britain there will have been a gap of over a year between their Welfare Reform Act being passed in March 2012 and the introduction of the under-occupation penalty in April 2013. This has provided certainty and time for social landlords to notify tenants, provide appropriate advice and support, and get the necessary administrative systems in place. Here the gap between the primary and secondary legislation being passed and the under-occupation penalty being introduced could be as little as a week or two. This is clearly insufficient and unfair on tenants and landlords when necessary preparations have been inhibited by delays completely outside their control.
Cameron Watt, Chief Executive of NIFHA said:
“NIFHA supports the principles behind welfare reform of simplifying our benefits system and making work pay. We also greatly value the flexibilities the Social Development Minister has secured in how Universal Credit will operate in Northern Ireland and the six month postponement to its introduction to allow proper time to prepare.
However the bedroom tax is unjust and has the potential to cause real hardship to many low-income families. Unfortunately there appears to be very limited scope to minimise the impact of the bedroom tax without breaking parity.
Housing associations and the Housing Executive are actively publicising the likely changes to tenants and providing advice and support. However the information sharing arrangements that will allow housing associations to accurately pinpoint and help affected tenants can’t begin to operate until our Welfare Reform Bill becomes law.
With the bedroom tax resulting in significant cuts in benefits for over 30,000 households, tenants and social landlords must have a fair amount of time to fully prepare.
That is why we are calling for the six month postponement of the Universal Credit to be extended to the under-occupation penalty.
Also, with social tenants affected by the bedroom tax facing a Housing Benefit shortfall in excess of £10 million annually, the budget for Discretionary Housing Payments must be significantly increased to minimise hardship.”
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Notes to Editors
1. If the proposals go ahead, from 1 April 2013 the under-occupation penalty or size criteria would be introduced for new and existing working-age Housing Benefit claimants – that is anyone aged up to 61 years at April 2013 – living in a Housing Executive or housing association home. Tenants who are pensioners will not be affected by this change. Tenants who do not receive Housing Benefit would not be affected.
2. In summary, the new system would allow one bedroom for each person or couple living as part of the household, with the following exceptions:
- A child under the age of 16 would be expected to share with one other child of the same gender;
- A child under 10 years would be expected to share with one other child under 10, regardless of gender;
- A bedroom for a non-resident carer will be allowed in the calculation of necessary bedrooms where that carer provides necessary overnight care for the claimant or their partner.
- Foster children do not count as part of a foster carer’s household, so no bedrooms are allocated for them under the size criteria.
3. Tenants will have their Housing Benefit payment reduced by 14% of their rent for under-occupation by one bedroom and by 25% for under-occupation by two or more bedrooms. Based on the current average Housing Executive rent of £58.76, a tenant who receives full Housing Benefit but who is under-occupying by one bedroom would see their Housing Benefit reduced by about £8.25 a week. A tenant who is under-occupying by two or more bedrooms would see a reduction of about £14.70 per week. If a tenant’s Housing Benefit is cut they will have to make up the shortfall between their Housing Benefit and their rent.
4. 26,168 households in Housing Executive homes and 6,262 families in housing association homes will be affected by the bedroom tax, a total of 32,430. NIFHA calculates that the under-occupation penalty in Northern Ireland will result in £17.3 million being less paid in Housing Benefit to affected households in social housing – £13.7 million to Housing Executive tenants and £3.6 million to housing association tenants. This contrasts with the official estimate of a £15.5 million reduction.
For a fuller description of the under-occupation penalty and case studies illustrating the impact on families, please see here on the Housing Executive website.