The so called “bedroom tax” was introduced on 1st April 2013. The “bedroom tax” is a change to how much housing benefit a tenant is entitled to, which is calculated by the number of bedrooms a tenant needs. There are various criteria which dictate how many bedrooms a tenant is permitted, and tenants have seen a cut in their benefit if they live in a property which has more bedrooms than they are entitled to.
The result of the bedroom tax is that local councils have seen a massive increase in the number of applications for discretionary housing payments (DHP), the funds that have been put in place to assist people in the short term when they are struggling with living costs following welfare reforms.
23 local authorities have reported a sharp increase in the number of tenants applying for discretionary housing payments (DHP) to help pay their rent.
Hull, Leicester and Southwark councils all received at least five times as many applications as they would normally receive in a month, while Waltham Forest Council’s average monthly figure jumped from 72 to 226. Leeds Council has received 1,256 applications compared with 226 last April, while Sefton Council has had a nine-fold increase, receiving 321 applications since 1 April. Southampton Council had 295 applications compared with 75 in April 2012. Birmingham Council received 2,000 applications for DHPs in the first two weeks of April – 50% more than the figure for the whole of the first quarter of the 2012/13 financial year.
The rise in demand for the DHP fund is the first quantifiable sign that the bedroom tax is making it harder for tenants to meet living costs.
Ian Wingfield, cabinet member for housing management at Southwark Council, said: “We’re encouraging people to come forward quickly, but we think we will have a shortfall [in DHP] because we have a high number of disabled and vulnerable people.”
The government has increased its DHP pot from £60 million in 2012/13 to £155 million this year. But the early increase in applications will raise fears that the £155 million will be insufficient to help those hit hardest by the penalty.
Mr Wingfield, said Southwark Council, which has received more than £1 million to fund DHPs, expects applications to increase further. This is because some people affected only applied after their first reduced benefit payment.
A Department for Work and Pensions spokesperson said: “DHPs are something we will keep an eye on to make sure they go to people who need them.” He added that he does not expect the rise in applications since 1 April “to be replicated across the year”.
South Yorkshire Housing Association revealed this week that half its estimated 700 households hit by the bedroom tax have underpaid their rent by an average of £60 this month. This could renew fears about the bedroom tax’s impact on landlords’ income if tenants are unable to cover the average £14-a-week benefit cut.