If you have a spare bedroom and you’re renting a council or housing association property, then your Housing Benefit, or housing costs element of Universal Credit might be reduced. This is often referred to as the ‘Bedroom Tax’ or the ‘under-occupation penalty’ or the ‘removal of the spare room subsidy’.
Who is affected?
You’ll be affected by the penalty if:
- you’re classed as having a spare bedroom
- you’re aged between 16 and minimum State Pension Credit age
- you get Housing Benefit (or the housing element of Universal Credit)
- you rent your property from a local authority, housing association or registered social landlord.
The following rules are used when working out whether you have a spare room:
- Two children under 16 of the same gender are expected to share.
- Two children under 10 are expected to share regardless of their gender.
- You are allowed one bedroom for each person over 16 or couple in a household.
If you live in Scotland or Northern Ireland
In Scotland, anyone affected by the bedroom tax should apply for a Discretionary Housing Payment (DHP) as the Scottish government will guarantee payments to make sure you are not worse off.
The Northern Ireland government provides funding to help people who are affected by the bedroom tax to make sure you are not worse off.
Who is exempt?
There are a number of exemptions.
- If you – or your partner – are over the qualifying age for State Pension Credit you won’t be affected. (However, under Universal Credit, you’ll both need to be over State Pension Credit age to be exempt).
- If you are an approved foster carer, you’re allowed an extra bedroom. This applies even if you’re between placements, so long as you have fostered a child, or you’ve become an approved foster carer in the last 12 months.
- If you have an adult child living at home who is in the Armed Forces they will be treated as continuing to live at home, even when they’re deployed on operations. During this time, the non-dependant deduction is also removed for the adult child.
- If you have an adult child who is a student and their main residence is your home, their bedroom is not considered to be ‘spare’ as long as they don’t go more than 52 weeks without returning home. (If you’re getting Universal Credit this is for six months. Also full-time students will not be exempt from the ‘Housing Cost Contribution’, under Universal Credit which is payable at £75.53 per month for each non-dependant adult over 21).
- If you receive care, support or supervision from your landlord in supported exempt accommodation, the under-occupancy penalty does not apply.
- If your council has put you in certain types of temporary accommodation because you were homeless your Housing Benefit might not be affected.
- If you have a spare bedroom as a result of a death in your household, the reduction in respect of that bedroom will not apply for 52 weeks. (If you’re getting Universal Credit this will be for three months).
Exemptions for disabled people
- If you or your partner receive regular overnight care from a carer (or team of carers), you’re allowed an additional bedroom.
- An extra bedroom is allowed for a severely disabled child who is getting either the middle or higher rate of either component of Disability Living Allowance, and is unable to share a room because of their disability.
How will this affect you?
If you’re affected, your eligible Housing Benefit (or the housing element of Universal Credit) is cut by:
- 14% for one extra bedroom
- 25% for two or more extra bedrooms.
So, for example, if your rent is currently £380 per month, your benefit is cut by:
- £53.20 per month for one extra bedroom
- £95 per month for two extra bedrooms
Watch our video - Worried about paying your rent?
Read a transcript of this video
If you’re worried about finding the money to pay your rent, the first thing you should do is to talk to your housing association or council to see whether there are any options available to you.
They might talk to you about transferring to a smaller home (if any are available) and they can advise you on whether any extra financial help might be available to you.
Claim a Discretionary Housing Payment from your council
Every year your council is given a pot of money to help people who need extra help with housing costs. You may be able to apply for this top up payment if you are getting the housing costs element of Universal Credit or Housing Benefit.
The council decides who should be given what they call a ‘Discretionary Housing Payment’.
Draw up a budget
If you don’t already have a household budget (a list of all your income and outgoings) then now’s the time to draw one up.
And if you do have a budget, you’ll need to see whether you can still make ends meet after your Housing Benefit is reduced.
Go to our Budget planner
to draw up a budget of all your household income and outgoings.
Look at ways to cut costs
You might also find it useful to read some of our pages on saving money on household bills.
See if you can increase your income
It’s always worth seeing if there is any way to boost your income, even if it’s just a case of checking you’re getting all the help you’re entitled to.
Consider getting a lodger
Renting out your spare bedroom is a possibility.
If you do decide to go down this route, there are a few things you need to know:
- Having a lodger would mean you’re no longer considered as having a spare bedroom when your Housing Benefit is assessed.
- However, apart from the first £20 a week, the extra cash you get in rent is likely to be treated as income so your benefits could be reduced.
- If you’re getting Universal Credit, the way lodgers are assessed is different. You’ll be considered as having a spare bedroom – so the housing element of your Universal Credit will be reduced – but the rent you receive will be fully disregarded and you can get a tax free income of up to £7,500 a year.
- Your contents insurance might not be valid if you take in a lodger. Make sure you check with your insurer you’re still covered.
Download a factsheet about renting out a room in your home from the GOV.UK website.
Challenging a ‘bedroom tax’ decision
You are allowed to appeal against a bedroom tax decision. The most common reason for appealing is because you require the extra bedroom because you, your partner, your child or non-dependant adult has overnight care needs.
If you are getting Housing Benefit you will need to write to your local council within one month of the date of the decision.
If you are on Universal Credit you will first have to ask for a mandatory reconsideration of the decision before you can make an appeal within one month of the date of the decision.
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