Pensioners hit by £75m bedroom tax this year

I always though pensioners were exempt from the bedroom tax but this is apparently NOT the case.  Unless the information I read has been changed since June 2012 and I can find no evidence that it has pensioners will be hit with a £75m per year bedroom tax.

In April it only needs one member of a couple to be a pensioner (in receipt of Pension or Pension Credit) to exempt the household from the bedroom tax.  However under Universal Credit it needs BOTH partners to be in receipt of Pension or Pension Credit to be exempt from the bedroom tax.

This is contained in “Making if Fit” a publication from last summer from the CIH and backed by NHF, NHC and LGA (a who’s who of housing organisations) and on page 10 it reads:

“People who have already reached state pension age by April 2012 ill not be subject to the size criteria. A couple are not subject to the size criteria where the eldest member has attained state pension credit age, even if the younger member is still of working age.  However when Universal Credit is introduced in October 2013, it is likely that, for new claimants, both will be treated as working age and subject to the size criteria until they have both reached the qualifying age for state pension credit.”

It goes on..

“As the qualifying age for state pension credit increases, the DWP estimates that the number of claimants affected by the size criteria measure will rise from 670,000 to around 760,000 by 2020, assuming that there will be no further changes to assessment criteria and to the caseload.”

Before I begin to unpick the above two quotes the huge issue is that once it becomes known and awareness is raised that pensioners the sacred cow of British politics and especially in welfare terms ARE affected and TAXED by the coalition bedroom tax then the proverbial hits the fan…and big time!  The older person lobbies, THE most powerful lobby in British politics who forcefully represent the interests of greater than 40% of the electorate lest we forget, rains down on the coalition.

The first quote “….A couple are not subject to the size criteria (the bedroom tax) where the eldest member has attained state pension credit age…HOWEVER when Universal Credit is introduced…BOTH will be treated as working age and subject to the size criteria UNTIL they have BOTH reached the qualifying age..”

The second quote “the number of claimants affected…will rise from 670,000 to around 760,000..”

So 90,000 what we now call ‘pensioners’ will be hit be the bedroom tax!! We are informed the average bedroom tax deduction will be £16 per week or £834.86 per year or in a red top headline

Pensioners hit with £75m bedroom tax bill !!!

Cue – Help the Aged and Age Concern, now Age UK, Joan Bakewell, Michael Parkinson, Saga, June Whitfield and Uncle Tom Cobley and all will emerge out of the woodwork and the anti bedroom tax campaign suddenly takes off! This is so unfair, How can we treat older persons this way…you get the picture!

Do I need to say anymore? Well yes I do as it happens!

This ‘Making it fit’ document was and is the social landlords collective guidance to themselves on what to do about the bedroom tax in preparation for its introduction and despite clearly saying above that pensioners will be affected and even putting a number on that at 90,000 the same document says on page 15

“Some tenants, for example, those aged 62 and over, may be anxious about the changes even though they won’t be affected, so it’s important that you give out clear messages to allay any fears that they may have.”

Take your own advice!!  If you say BOTH partners in a pensioner couple must reach the qualifying age not just one of them you can’t then go on to say they wont be affected!! Especially when you put a figure on this and say 90,000 couples with one of them reaching the qualifying age and the other not will be hit by the bedroom tax. A CLEAR message!!

Speaking with tenants, housing officers, housing managers, housing directors, chief executives, consultants, board members, housing lawyers and others involved with housing over the past 12 months and more it has been a ‘given’ that pensioners are NOT affected by the bedroom tax.  The only slight issue is the age necessary for that term being 61.5 years of age in April.  Yet here we have the ‘great and the good’ of housing saying that pensioners will be affected by the bedroom tax under Universal Credit and have even stated the numbers who will be!

We need a definitive statement on this from the DWP and from the minister himself IDS who will of course have to explain to his leader, the Prime Minister that his pledge not to tax pensioners any further or take away any universal benefit (which exempting amounts to) in this parliament from pensioners has been broken!

UPDATE

A number of messages have said the Making if Fit document I refer to above is (for some reason!) not available at the link above.  I have therefore put the file on my website and you can download or read it there – Making if Fit - The quote above that BOTH partners must be of the qualifying age can be found on page 10

UPDATE – Wednesday 6th February

Interestingly I note today in an article in 24dash entitled “Government attacked over continued failure to define ‘vulnerable’ in Universal Credit” that Lord Freus in defending this says:

“No one will lose financially through the transition to Universal Credit where their circumstances remain the same.”

This clearly is not the case is it?  If one member of a couple is 62 and the other 55 then as one of them has reached state pension age (61.5 at April 2013) then they will be exempt from the bedrrom tax in April to September.  Yet come October with no change in circumstances this couple do become eligible and will be caught by the bedroom tax.  They will lose out financially in the transition to Universal Credit.  Unless of course Lord Freud is dadding another £75m per year cost to Universal credit through an added form of transitional protection.

Anyone get the feeling the coalition are making it up as they go along and don’t know what the hell they have gotten themselves into?  Pandora’s box indeed!

UPDATE – Wednesday 6th February 2013

Dear Reader,

In the last 17 days when I have been writing about the bedroom tax the amount of comments I have received has dramatically increased.  This update is a first as I reproduce a comment in full below because it holds a number of incredibly important points.  May I first congratulate the reader and ask that they contact me and I will give them the full credit if they so wish and I will understand if not too.

Please read the comment and I need to add nothing to it as it is that good:

“If those “mixed-age” households currently claiming Pension Credit were to lose their eligibility, however briefly, they would no longer be eligible for pension  credit. For example, if the working-age partner were to find a month’s temporary  work, they would have to claim Universal Credit, not Pension Credit, when that  work came to an end. Therefore, the couple would be hit by the bedroom tax. On  top of that, they would no longer receive such things as cold weather payments.  Hardly an incentive to find work!

What’s more, some reports suggest that a pensioner with a working-age partner will actually receive less benefit than a single pensioner. It seems unfair that the pensioner in the couple should be penalised in this way. I fear that these changes will lead either to a surge in divorces, or to a considerable number of  poor pensioners whose autumn years will be very bleak due to their  having a younger partner who, for one reason or another, is unable to bring in a living wage.”

NB – an enhanced and new blog on pensioners getting hit by the bedroom tax is here and adds more to the above

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31 thoughts on “Pensioners hit by £75m bedroom tax this year

  1. Smiling Carcass February 3, 2013 at 10:12 am Reply
    • joehalewood February 3, 2013 at 10:19 am Reply

      So I now see!

      Three things interest me on this. The first is that we have a figure (90,000) and so can put a number of this at £75m. The second is that the ‘housing sector’ knew about this yet didnt act on it and this will damage further their relations with tenants and shows huge incompetence.

      Yet the third is the most important – that the govt have been saying it wont affect pensioners and now I expect the full force of the older persons lobbies to come firmly behind a much larger anti bedroom tax campaign. The OP lobbies are incredibly powerful and once theyre onside the bedroom tax policy has the greatest chance of being removed

      • Smiling Carcass February 3, 2013 at 10:37 am

        When I raised this issue last year with my local housing portfolio holder, he said pensioners will not be affected, only those on pension credits with a working age partner who will be required to claim Universal Credit in October 2013, the rationale being, apparently they will no longer be pensioners, therefore pensioners won’t be affected!

  2. Gareth Morgan (@gmorgan_ferret) February 3, 2013 at 12:14 pm Reply

    I’ve written and spoken quite a bit about these ‘mixed-age’ couples. The UC impact assessment shows them to be the most badly hit by the changes. There are a *lot* of issues that follow on from this, including the fact that they get caught by the bedroom tax.

  3. cupcakesatdawn (@siobhan1222) February 4, 2013 at 9:35 am Reply

    It’s ridiculous that pensioners are exempt. They are the ones most likely to be rattling around in a huge house with spare bedrooms that they no longer need. The demographic that most needs these large houses won’t get them because the pensioners are protected at all costs!

    • Smiling Carcass February 4, 2013 at 9:49 am Reply

      It is more ridiculous that anybody has to pay. Where are the smaller properties to move them to? Can you imagine the effect on a pensioner who has lived in their HOME for, perhaps 40 or 50 years, raised a family there and seen a spouse die there- a home full of love and memories; this doesn’t even begin to consider the money they may have spent on their home and garden, and we’re saying we want you to do one of the most stressful things in life, move home, not because you want to, not because your selling at a profit but because we want your HOME because we sold too many and didn’t build enough?

      The disruption would likely kill many of them; rather than blame the pensioners who councils and successive governments were happy to house and give lifetime tenancies to for not addressing the issue of council housing and stop selling them and start building them.

    • joehalewood February 4, 2013 at 11:38 am Reply

      Pensioners are protected at all costs not because of age discrimination (which in simple terms it is) but because they make up 40%+ of the electorate. Treat pensioners badly and it only has to be once (think of Labours 50p per week pension increase amongst a huge range of additional benefits they gave) and they do not vote for you. Those of pension / non-working age take 60% of the entire welfare benefit spend yet benefit scroungers are always the young in the public psyche. Briefly, (and no I don’t think pensioners get too much in benefits) once you reduce pensioner benefits then the full force of the very powerful older persons lobbies come into play, and especially so when the government tries to sneak in such a tax as they have done here

  4. James (@JamesBattye) February 4, 2013 at 11:15 am Reply

    I’m still not 100% sure that pensioners will be affected by this – if the HB regs are carried across into universal credit in their current form then the same exemption would still apply surely?

    • Smiling Carcass February 4, 2013 at 11:18 am Reply

      http://www.housing.org.uk/policy/welfare_reform/faqs.aspx

      From October 2013, when Universal Credit is introduced, if either member in a couple is under the qualifying age for pension credit then the couple will be treated as working age. This means they would be expected to claim Universal Credit, and would therefore be subject to the size criteria and benefit cap.

    • joehalewood February 4, 2013 at 11:33 am Reply

      James – the point is the same rules do NOT apply when HB morphs into UC. Take a couple now a 63 year old woman and a 60 year-old man. Because one has achieved state pension age the couple are exempt. Yet when this goes into UC from October both members of the couple have to have reached state pension age before the bedroom tax exemption applies. So this couple will have the bedroom tax applied until male partner reaches 66 or even 67 – a further 6 or 7 years.

      That is why pensioners will be affected. Call it a tax on being a cougar in the above example or if roles reversed a sugar daddy tax

  5. James (@JamesBattye) February 4, 2013 at 11:28 am Reply

    I get a ‘this page is no longer available message’ when I click that link.

    I agree this is unclear. For it to be the case this specific exemption: “where the claimant or the claimant’s partner has attained the qualifying age for state pension credit, or where both have attained that age” can’t be carried into the calculation of the housing element under universal credit. I’m just wary that a general policy of treating mixed aged couples as working-age may not apply to this specific example.

  6. joehalewood February 4, 2013 at 1:33 pm Reply

    Have updated the post above by placing a copy of the Making if Fit document on my website so it can be accessed, downloaded and/or read

  7. James (@JamesBattye) February 4, 2013 at 1:57 pm Reply

    Well, that’s clear as day – thanks. No mention of what form the transitional protection will take though, I wonder if it’ll be the same as for the general migration to universal credit. There’s a definite need for this to be clearly mentioned in DWP publications, if it hasn’t been already.

    • joehalewood February 4, 2013 at 2:00 pm Reply

      It wasn’t even mentioned in impact assessments! Same huge number of omissions in overall benefit cap / bedroom tax and all other welfare ‘reform’ policies. It is political dogma and what can we spin ahead of the actual impacts – very dangerous and inept governing and an affront to democracy

  8. Carmel Finucane (@carmel_finucane) February 5, 2013 at 6:11 pm Reply

    What is clear is that the message is not!

    I am not convinced about the subliminal intentions tho Joe – mainly because I am not convinced that someone has actually been clever enough to construct it thus!

  9. concernedcitizenb February 6, 2013 at 2:34 pm Reply

    Hmm, I have read the exchange between Webb and Timms differently to you:

    Stephen Timms: I think the Minister has given a clear answer to my question, but I would like to be absolutely clear. Is he saying that what he describes as a mixed-age couple will not suffer the under-occupancy penalty prior to the introduction of universal credit, but they will afterwards. Is that right?

    Steve Webb: More or less, so they will not suffer it prior to universal credit; if they are already in the system and protected by the time universal credit comes in, we will not go back, as it were, unless there is a major change of circumstance, but future claims will be treated in the opposite way.

    I have read the Minister’s reply as

    “mixed-age” households exempt from the bedroom tax from April will continue to be exempt when Universal Credit is introduced if they are in receipt of Pension Credit at that point

    So that the only “mixed-age” households which will be required to pay the bedroom tax are those who claim Pension Credit after October, which is contrary to the thrust of your article above.

    Have I missed something?

    • mousegran February 6, 2013 at 8:07 pm Reply

      If those “mixed-age” households currently claiming Pension Credit were to lose their eligibility, however briefly, they would no longer be eligible for pension credit. For example, if the working-age partner were to find a month’s temporary work, they would have to claim Universal Credit, not Pension Credit, when that work came to an end. Therefore, the couple would be hit by the bedroom tax. On top of that, they would no longer receive such things as cold weather payments. Hardly an incentive to find work!

      What’s more, some reports suggest that a pensioner with a working-age partner will actually receive less benefit than a single pensioner. It seems unfair that the pensioner in the couple should be penalised in this way. I fear that these changes will lead either to a surge in divorces, or to a considerable number of poor pensioners whose autumn years will be very bleak due to their having a younger partner who, for one reason or another, is unable to bring in a living wage.

  10. [...] Finally worthy of a mention is the SPeye blog which has featured some of the best coverage of the bedroom tax, including revealing that despite Tory lies, it seems many pensioners will be hit by the tax. [...]

  11. Gareth Morgan (@gmorgan_ferret) February 7, 2013 at 9:37 am Reply

    Just to clarify some of the points that Mousegran made, and to add a couple more.

    “If those “mixed-age” households currently claiming Pension Credit were to lose their eligibility, however briefly, they would no longer be eligible for pension credit. For example, if the working-age partner were to find a month’s temporary work, they would have to claim Universal Credit, not Pension Credit, when that work came to an end.”

    This will only be the case if they earn enough to lose entitlement to Pension Credit completely. This is possible because the earnings disregard in Pension Credit for Couples is only £10 so everything above that will reduce, and in due course, remove Pension Credit entitlement. See my comment below on earnings.

    “…. some reports suggest that a pensioner with a working-age partner will actually receive less benefit than a single pensioner.”

    Pension Credit Guarantee for a single person, the basic means-tested amount, will be £145.40 from April 2013. The couple rate for Job-Seekers Allowance will be £112.55. Those mixed-age couples who find themselves on working-age benefits will be worse off than the older person would be on their own.

    Pensioners are going to face a peculiar situation when work is considered. Some of these people are going to be worse off than if they were on working age benefits when Universal Credit (UC) is introduced.

    Mixed-age couples who are put onto UC and have some earnings will have a lower ‘needs’ calculation but will have a higher earnings disregard. Particularly where there is a disability or they have a dependant child this may be very much higher. They are also able to keep more of their earnings than under Pension Credit (PC) after the disregard; they keep 35p of every £1 while under PC they lose every penny. It’s possible that this will more than make up the difference. It won’t where there are no earnings.

    Those who are not on UC but stay on PC may find out that they might have been better off on UC if they are working because of this earnings calculation as well, even though the basic rates are lower. This won’t be the case if they have no earnings.

    There are other hits as well:

    Mixed-age couples may be hit by the Overall Benefits Cap as well as the Bedroom Tax.

    Pensioners can, at the moment, get help, if they work enough, from Working Tax Credit (WTC) as well as PC. WTC is the in-work benefit support scheme that will vanish when UC takes over the in-work benefit role. Pensioners will not, unless they have a younger partner, be able to claim UC so all in-work help will disappear for them at a time when pension age is rising and more people have to continue working into old age.

  12. mousegran February 7, 2013 at 10:22 am Reply

    I had seen references to the higher earnings disregard that will apparently apply on UC, but haven’t seen mention of a specific figure yet – any ideas?

  13. Gareth Morgan (@gmorgan_ferret) February 7, 2013 at 2:03 pm Reply

    First figure is Earnings disregard without housing costs in the Universal Credit Assessment £

    Second figure is Earnings disregard with housing costs in the Universal Credit assessment £

    Amount for each assessment period
    Couple 111 111
    With children 536 222
    One or both with limited capability for work 647 192
    Single 111 111
    With children 734 263
    With limited capability for work 647 192

    Weekly equivalent
    Couple 25.55 25.55
    With children 123.35 51.09
    One or both with limited capability for work 148.90 44.19
    Single 25.55 25.55
    With children 168.92 60.53
    With limited capability for work 148.90 44.19

  14. Ben Reeve Lewis Friday newsround #94 February 8, 2013 at 7:51 am Reply

    [...] on SPeye, the ever diligent Joe Halewood, did what Joe does best and dug into the small print and figures [...]

  15. mousegran February 8, 2013 at 3:17 pm Reply

    Yesterday, Pensions Minister Steve Webb was talking on Radio 4 about the bedroom tax, and stated emphatically that pensioners will not be affected. Makes my blood boil that government ministers get away with making such misleading statements (or lies, as some might call them).

  16. [...] Over the past few weeks there has been story after story about people who are going to be wrongly affected by the bedroom tax, sometimes this is because the spare rooms really aren’t spare – like those being slept in by foster children, rooms kept by separated parents of visiting children for them to sleep in, or disabled people in adapted premises or who need a second room for a partner or sibling to sleep in because sharing is either not possible or not suitable. Sometimes it’s because we are talking about people who have lived and worked in a community for decades, raised a family there but with the children grown up and in their own homes, they now have spare rooms. More distressing are those people who have suffered the death of a partner or child and cannot afford the extra charge. To stay in their community they will have to pay. Pensioners are currently excluded from the bedroom tax, but it is thought that 90,000 pensioners will get caught up in it when Universal Credit comes in next ye…. [...]

  17. mousegran February 17, 2013 at 10:53 am Reply

    http://www.itv.com/news/update/2013-02-17/department-for-work-and-pensions-issues-bedroom-tax-reassurance/

    DWP:
    “We want to reassure pensioners claiming housing benefit that they will not be affected by this policy now, or when Universal Credit begins, even if one partner is below pension age.”

    Doesn’t mention change in circumstances, though!

  18. [...] The DWP have acknowledged that only a proportion of those affected will be able to ‘downsize’. In many areas, particularly in the north, social housing providers state that they have very few one bed properties, so those looking to downsize will either be frustrated, or forced into the private sector, ironically increasing the housing benefit bill. (For posts on the effect of the bedroom tax on Housing Benefit, see here and here). [...]

  19. mousegran April 27, 2013 at 6:46 pm Reply

    Now here’s an interesting one. I apologize for the fact that this is only indirectly related to bedroom tax.

    I have just read (a Gransnet post) that if a pensioner couple wants to transfer to a different home for some reason, they are now only allowed to transfer to a suitably-sized home – ie., to a one-bedroom property.
    In effect, this means that they have little choice other than to stay in their current home. Even if they were prepared to transfer to a one-bed property (which I doubt anyone with family would choose to do unless for medical reasons), their chances of finding one are pretty close to zero!

    I haven’t had the opportunity to check out whether or not this is true, but if it is, it is yet another example of how the Government has lied about pensioners not being affected by the current changes!

    • joehalewood April 27, 2013 at 6:52 pm Reply

      Yes and No. It is not the bedroom tax that decides this, rather it is social landlords policies in response to it. Allocations are now made with bedroom tax in mind and so very few landlords would place a pensioner couple (1 bed need) into a 2 bed or higher property. The real issue is when UC regulations come online as then both in the couple will need to have reached state pension qualifying age to be exempt, until then (October 2013 onwards) it needs just one to have attained that age

  20. mousegran April 28, 2013 at 1:00 pm Reply

    Thanks for the clarification, Joe. So it’s an indirect consequence of the bedroom tax/underoccupation issue, rather than a specific piece of legislation that has been sneaked through!.

    In reality, it means that even if they do not (currently) have to pay the bedroom tax, pensioners who live in social housing have not a cat in hells chance of transferring to another property now that their only option would be to move to a virtually non-existant one bed property. They are stuck where they currently live. This will cause a lot of upset for any who find themselves needing to move for family or health reasons, then discover that they can’t.!

    You would have thought that it would be in the best financial interests of the social landlord to allow pensioners to continue to under occupy in the event of a transfer, particularly if they are in receipt of HB, because they are far more likely to get the rent paid that way than they are if they have younger HB tenants, given the changes to direct payments.

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