The Bedroom Tax: A perfectly mad system?

housesSharing a room with her four year old disabled son, Brenda (not her real name), a single mother from Ladywood, is just one among the 37,000 households in Birmingham living in congested conditions, making the West Midlands accountable for almost half of families living in overcrowded accommodation across the country.

Images from http://www.taxfix.co.uk

With an increasing demand for properties, combined with an acute shortage of social housing, the idea of taxing council tenants who maintain a spare room seems reasonable, but a closer investigation into the matter reveals that this taxation may be affecting societies most vulnerable whilst only adding to a worsening housing situation. John Cotton, Labour councillor and cabinet member for social cohesion and equalities in Birmingham regarded the policy as “flawed” when expressing his concerns with the new welfare reform and the repercussions it will have upon social housing tenants in Birmingham.

 “This has been foisted on us by the central government who clearly do not understand the full implications of their own policies.”

What is the Bedroom Tax?

The under occupancy sanction, more commonly known as the Bedroom Tax, takes effect on April 1st 2013, as part of a larger reform of the traditional benefit system. The policy is an attempt by the Department of Work and Pensions (DWP) to encourage households to downsize if they have spare rooms, freeing up properties for larger families. This will see social housing tenants pay the price for maintaining a spare bedroom. However, what is deemed as a spare bedroom has become a controversial issue for many tenants and a talking point surrounding the policy, as many believe the guidelines to be unfair and dismissive towards certain groups within society.

With 10,000 council tenants estimated to be affected in Birmingham and a further 5,000 tenants from registered landlords, the West Midlands will make up 9% of Great Britain’s affected claimants. Taking into account carers, children, spouses etc. it is estimated that around 60,000 people will be affected in total.

The government have highlighted the terms and conditions of the sharing requirements which gives disabled tenants needing a non-resident overnight carer to be allocated the rights to an extra room, whilst children under the age of 16 of the same gender and children under 10 years of age, regardless of gender  are expected to share. This means that those not complying with the new guidelines may be unknowingly maintaining a spare bedroom – a spare room needed by individuals such as Brenda; but what about those who are in need of that extra bedroom but are no longer entitled?

One woman who is finding coming to terms with the policy difficult is a 59 year old scoliosis sufferer who after living under social housing within Birmingham for the past 31 years feels devastated to locate from her once family home.

 “This is my home, my safe place. Words cannot express how upset I am and how this decision is affecting my illnesses.”

The affect on foster carers

UK charity, The Fostering Network, have revealed the strain the Bedroom Tax is placing on foster carers as the policy originally failed to acknowledge the occupation of a room for a foster child, leaving carers vulnerable to the ‘spare’ bedroom tax.

A spokesperson for The Fostering Network appeared extremely concerned about the implications of the upcoming policy,

“These changes are causing some foster carers considerable anxiety and to wonder if they will be able to continue to foster.”

According to Birmingham City Council approximately 2,000 children are in care within the city with 60% in foster care, housed across a number of in-house homes and private sector accommodation.

Emma, a Birmingham based foster carer said,

“My local authority required me to have a ‘spare room’ before I could even be considered for fostering. Now that very same authority wants to penalise me for having a ‘spare room’, even though it is not spare as there is a child in it! To me this makes no sense and is in fact very unjust.”

However, work and pensions secretary Iain Duncan Smith, has recently announced that approved foster carers will now be exempt from the policy, a policy which once classed foster carers liable to the housing benefit taxation. As part of an introduction of new regulations surrounding the policy, Mr Duncan Smith aims to support “priority groups” giving concessions both to foster families and armed forces. Although little or no consideration is still been given to many other individual in particular, separated families.

Foster families were not the only group estimated to be affected by the policy, with little or no consideration originally being given to individual cases and exceptional circumstances of separated families, armed forces and the disabled.

Local housing authority statistics suggest that 1 in 5 council tenants work full time and it will be this demographic who will be most affected  by the Bedroom Tax in the UK as over 22% of council tenants are looking for work whilst more than 20% of council tenants in the UK have a full time job.

The estimated impact of the policy has become a cause for concern among many registered charities, MP’s, Councillors and campaign groups who have hit against the policy, with Birmingham Councillor John Cotton stating,

“This is exactly what happens when government makes policy to chase headlines, rather than to deal with the actual issue…they are avoiding the thorny issues around welfare reform.”

 David Barrie, Conservative Councillor for Social Cohesion and Community Safety in Birmingham, believes the Bedroom Tax is in the interests of the tax payer,

 “As a hard working tax payer would you be happy to pay for someone else to live in expensive housing that you could not afford?”

The affect on the housing situation

Despite affecting a large proportion of society and causing distress to many, whether the implementation of the taxation will actually improve the social housing shortage within Birmingham is questionable. George Marshall, a research systems officer at the National Housing Federation, feels the housing crisis will make downsizing due to the taxation an issue for tenants as the need for two bedroom houses and single person flats increases while there is limited stock available, and this shortfall is unlikely to be met by the private sector as there is clear evidence where that private landlords are reluctant to take tenants from the social housing sector.

A spokesperson from Andrews in Great Barr said:

“We don’t accept people receiving housing benefits. It’s our policy because the DSS department will only correspond with the tenant, not the landlord or letting agency meaning that if the tenant forgets to pay, we have no way of gaining access to the money.”

According to the National Housing Federation’s 2012 Home Truths report, there is an urgent need for the construction of new build houses within the West Midlands. With 16, 629 people currently on the housing waiting list, Birmingham maintains the second largest housing waiting list within the West Midlands, an issue which both John Pierce, campaign officer at the National Housing Federation, and Councillor John Cotton, feel needs addressing in order to boost the economy whilst solving issues of homelessness and overcrowding within the city.

In their housing strategy published in November 2011 both Nick Clegg and David Cameron outlined the importance of building quality new homes to support future generations,

“One of the most important things each generation can do for the next is to build high quality homes that will stand the test of time.”

However, David Orr, Chief Executive of the National Housing Federation, recently identified that although 390,000 new houses were built in the UK in 2011 only 110,000 were built in 2012, a decrease which David Orr finds distressing,

“One of the biggest constraints on growth is when businesses can’t expand because there are no homes for the people they want to employ.”

In an attempt to handle the housing crisis and frame a response to welfare reform in Birmingham, partnerships and campaigns such as ‘Yes to Homes’ and ‘WMBUS have been established within the region.  Yes to Homes, aims to create more land for house building and therefore more homes for the people who are suffering from overcrowded conditions. The campaign recently found available land in Birmingham equivalent to two cities the size of Wolverhampton.

John Pierce, the Campaigns Officer for ‘Yes to Homes’ feels the project will be a more suitable solution than the enforcement of the Bedroom Tax,

“The answer is not to force families out of homes, where they have lived for years…but to build more affordable decent homes quickly.”

Mike Sharpe, Labour councillor and chairman of Birmingham’s planning committee, recently praised a developer on his plans to build eight new homes and six new workshops in Birmingham’s Jewellery Quarter which offers six, four bedroom houses and two, two bedroom apartments. These smaller sized properties are what is needed to boost the economy and to solve the housing crisis; however, this is still a small proportion of a larger housing scheme which needs to take place within the city.

Councillor John Cotton identifies that the lack of new builds is something that only funding from central government will solve,

“We know what the issue is, we know what the solution is, but we need the resources.”

With the City Council’s limited resources and a lack of funding to finance these new builds, it appears that the Bedroom Tax will only be adding to a worsening housing situation as Councillor John Cotton states,

“You couldn’t have designed a more perfectly mad system for dealing with this, it really is iniquitous.”

Birmingham’s reaction to the Bedroom Tax under the new welfare reforms have encouraged numerous protests within the city around the Council House to demonstrate people’s dissatisfaction with the policy.

Stuart Richardson, Treasurer for the Trade Union Council, gave a speech outside Birmingham’s Council House voicing his opposition to the proposed welfare cuts, referring to the policy as,

“A programme of starvation.”

The Socialists Workers’ Party, were also among the protests as Andrew Howard, a member from the party demonstrated that the Bedroom Tax would only increase issues within society.

“It is actually going to cost more money to implement than they’re actually going to save.”

However, Mr Tom, a representative of the campaign group ‘Birmingham against the cuts’ felt the policy was unfair.

“The Bedroom Tax is not feasible for the poor, unemployed and disabled.”

The affect on the disabled

According to UK charity Scope, out of the 660,000 people estimated to be affected by the Bedroom Tax in Britain, 420,000 are disabled. Scope reveals this is due to individual cases with specialist needs who need a spare room for medical equipment or for when a carer stays, whilst some are simply too sick to move house and downsize.

Amisha Koria, Senior Media and PR Officer for Scope, expressed her concerns about the effects the Bedroom Tax will have on disabled people:

“Many families of disabled people tell us they are struggling to make ends meet. Multiple cuts to their benefits and services they rely upon have made things worse. Many have lost thousands of pounds in vital financial support.”

With the Department of Work and Pensions making concessions to the original policy, the disabled are being given increasing awareness within the policies exemptions due to  the press attention of individual cases. Richard Gorry father of five, appealed against the policy due to his concern about the discrimination the policy inflicted against the disabled as his two children were unable to share bedrooms due to their disabilities. Iain Duncan Smith has since gone on to highlight that those like Richard Gorry, whose children are severely disabled, will be exempt on loosing part of their housing benefit. 

The taxation on the spare bedroom relies upon the number of spare bedrooms and the price of the property rental, although according to the government’s impact assessment report the estimated average loss in benefits will be £14 a week.

With many unable to meet the financial demands of the taxation and with the limited housing stock availability to downsize, it is areas such as Ladywood that are most likely to feel the effects of the policy. Councillor John Cotton considers the Bedroom Tax to be “widening the gap of inequality” within the city effecting Birmingham’s most deprived areas as Birmingham City Council revealed that almost half of residents in Ladywood are either council tenants or live in a Housing Association. With only 29% of Ladywood council tenants using just one bedroom, a potential of 71% may be affected by the Bedroom Tax whilst ErdingtonNorthfield and Hodge Hill are also expected to be highly affected by the policy.

What’s being done?

In an attempt to support tenants and those estimated to be affected by the Bedroom Tax, Councillor John Cotton highlights the ways Birmingham City Council are attempting to handle the “consequences” of the policy. By setting up a multi-agency community with advice agencies, councils and housing associations, Councillor John Cotton attempts to frame a response to the welfare reform, where food banks, advice and support for social housing tenants can be accessed. Birmingham City Council also look to help tenants avoid the taxation by providing solutions to the policy through lodgers, downsizing and providing financial support with the help of  the Citizens’ Advice Bureau.

“We are trying to put all things we can in place to support tenants.”

The overall effect of the Bedroom Tax will only increase problems to society’s most vulnerable rather than solve and acknowledge the problem of overcrowding in the social housing sector. After recently receiving numerous letters of complaints surround the policy by registered charities, Iain Duncan Smith has ordered officials to look again at the policy and the implications it is causing upon society.

With recent concession made to the bedroom policy towards foster families, disabled and armed forces the enforcement of the policy clearly demonstrates the governments ill-thought out plans towards the policy. Whilst this review is progressing  Birmingham is doing its best to deal with the current situation and support those who will be affected by the Bedroom Tax with websites offering support and guidance.

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Mapped: Birmingham’s highest areas of benefit claimants

 

The map below shows Birmingham by its constituencies along with the levels of people who are claiming benefits, areas in red being the highest. Among the most affected areas Ladywood has the highest levels of people on housing benefits in all of Birmingham so it is here that the Bedroom Tax has the highest potential for affecting the most people. Alternatively Sutton Coldfield has least amount of benefit claimants and so stands to be the least affected.

 

map of areas effected worst by benefits

Click on the map to show the full map, hover over each area to get the percentage of people claiming housing benefits.

Foster Parents hit by Bedroom Tax.

As of April 2013 foster carers across Birmingham will be left paying between 14% and 25% of their current housing benefits whether there is a child occupying the room or not.

There are approximately 2000 ‘children in care’ at any one time in Birmingham, according to Birmingham City Council, whom they are responsible for and “aim to find stable, secure and caring homes” for.   These looked after children may be housed across a number of in house homes and private sector accommodation, but as of 2009 1190 of children in question were in foster care. That’s 60% of all Birmingham’s looked after children who’s carers potentially stand to shoulder the short fall.

This is down to a technicality with the current benefits system, according to the current outlines “when calculating how many bedrooms a family unit require, a room for a foster child will not be taken into account. Therefore, a household that has an extra room for a current or potential foster child will be treated as under-occupying”.

So for a foster carer who has one bedroom set aside for a fostered child, and is in receipt of the average housing benefit of £89.27 per week, will now have to pay £12.50 of that back, a shortfall that could be at the cost of the child. If a carer has two or more rooms for foster children that amount jumps £22.32.

Birmingham City Council Adopt/Foster Appeal.

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Your questions answered

Some answers to your most frequently asked questions:

Why is the Bedroom Tax being undertaken?

The housing bill is topping £21 billion a year. The Government claim this is too much to be paying and needs to be dramatically cut. Figures state that nearly one million empty bedrooms are being paid for through housing benefits. Steve Webb MP (Government Minister) told ITV News last week: “Thousands of families are living in over-crowded accommodation and their voices need to be heard as well.”

Who will be affected by the Bedroom Tax?

All claimants who have one or more spare bedroom(s) will be affected. This includes:

  • Separated or divorced parents who share the care of their children and who may have provided an extra bedroom because of this.
  • Couples who use their spare bedroom for recovering from an illness or operation.
  • Foster carers, due to foster children not being counted as part of the household for benefit purposes.
  • Parents whose children visit but are not part of the household.
  • Families with disabled children.
  • Disabled people including those living in adapted or specially designed properties.

How does the Bedroom Tax affect lodgers?

As of April 2013, lodgers will count as occupying a room under the size criteria rules. Any income from a lodger will be taken into account and deducted from benefit (apart from the first £20). This reverses under Universal Credit – lodgers will not be counted as occupying a room and the size criteria reduction will apply, but any income from lodgers will be fully disregarded and will not impact on the amount of a claimant’s Universal Credit award.

What about students living away from home?

Households where there is a room kept for a student studying away from home, will not be deemed to be under-occupying if the student is away for less than 52 weeks (under housing benefit) or 6 months (under Universal Credit). Under housing benefit rules, students are exempt from non-dependant deductions. However full-time students will not be exempt from the Housing Cost Contribution, which replaces non-dependent deductions under Universal Credit. All young people under 21 are exempt from the Housing Cost Contribution, but students over 21 will face a contribution in the region of £15 per week.

What is Universal Credit?

Universal Credit is a new single payment for people who are looking for work or those on a low income, which will be launched this year. Universal Credit will help claimants and their families to become more independent and will simplify the benefits system by linking together a range of working-age benefits into a single streamlined payment.

How will the Bedroom Tax operate under Universal Credit?

Some differences will occur when the bedroom tax operates under housing benefit (April 2013) compared to Universal Credit when it is introduced. These differences are as follows:

To find out more about Bedroom Tax, click here.