The Bedroom Tax just doesnt measure up…and how to get around it!

Last week I put out a succession of posts on the bedroom tax, or if you want to give it its proper name the under-occupation charge.  The first post asked two simple questions namely 1) Is the bedroom tax lawful? And 2) What is a bedroom?  Subsequent posts added more to the lawfulness question, revealed that there is a private sector dimension to the bedroom tax, discussed how the bedroom tax will cost more than it claims to save; that the bedroom tax could act as a catalyst to widespread take-up of benefits known to be due but not claimed (and £15bn alone is not taken up in HB and WTC) and finally that social landlords efforts in (a) challenging the bedroom tax and (b) raising awareness of it to their tenants have been inept.

These posts were widely read and many more similar posts have been written in the last week with some saying the bedroom tax will lead to civil disobedience as happened with the poll tax and then late on Friday a junior minister saying the coalition may need to review the policy.

Those who have read my blogs will know I have concentrated on other welfare reform policies and mainly the overall benefit cap, which I correctly say will cost the country / taxpayer / public purse more in monetary terms and will also penalise tenants and social landlords and private landlords more.  Indeed I have consistently been critical of social landlords for their over focus on the bedroom tax which has ignored the much bigger risk to their businesses and their tenants of the overall benefit cap (OBC). Yes the OBC will cost more than the bedroom tax!

The bedroom tax is beginning to unravel and simply because it is being challenged rationally.

Rather than bemoaning the impacts it will have, which are considerable, the focus is moving away from this emotive aspect to challenge based on rationality – the rationality of the law (is it legal and just what is a bedroom) and rationality of the finances – will it cost more and the wider economic impact.  In short away from the spin of government saying it is fair, which is highly superficial and spurious and away from the emotive challenges of social landlords – poor Mrs Jones has invested 25 years of love and money in her ‘home’ and is now being penalised because her children have flown the coop – to a genuine and rational consideration.

That new rational consideration is to be welcomed.

Below I bring together the above rational arguments and develop them and add some more rational challenges which collectively show that the bedroom tax policy is irrational and I would argue needs to be halted before it costs more and causes more damage and cost.

I begin by looking at the DWP guidance to local authorities on the bedroom tax which in itself is bizarre and irrational.

Can you tax something that you cannot define?

No.  Yet the question is much wider and the government are refusing to define what it is they intend to ‘tax’ or charge.  The DWP issued the guidance to local authority Housing Benefit departments in the usual way throough a HB circular and specifically the A4 of 2012.

This says a number of major issues we have to consider:-

At 2. It says ” This instrument introduces size criteria into Housing Benefit for those in the social rented sector (SRS), which is accommodation let by a local authority, registered housing association or other registered provider. The size criteria will be used to decide the extent to which the claimant under-occupies their home so that an appropriate percentage reduction can be made through Housing Benefit.”

So there is no doubt this is the relevant guidance on the bedroom tax / under-occupation charge policy.

It goes on at point 6 to explain the intention: ”  Those found to have more bedrooms than they are entitled to under the size criteria rules (under-occupying), will have a percentage deduction applied to their eligible rent. “

I have highlighted ‘bedrooms‘ above for good reason and to show that this is correctly labelled a bedroom tax.  If a tenant rents a two bed property that has two double bedrooms the tenant rents a 2 bed/4 – two bedrooms and 4 occupants.  Lets say it is a couple with two teenage boys. This family has the intended occupancy of 4 and it not subject to the bedroom tax.  Yet if they rent a 3 bed property with 1 double bedroom and two single bedrooms (a 3 bed /4) then they have the intended maximum occupancy but will be subject to the bedroom tax and lose 14% of their Housing Benefit.

That is irrational.  Note well the 2 bed/4 could have a larger floor space than the 3 bed/4 – in simple language the 2 bed/4 can be a bigger size than the 3 bed/4 yet the smaller 3 bed/4 is the only property to get the bedroom tax cut.

At point 10 in the official guidance it says:

“Those that are considered to be under-occupying their accommodation will see a reduction in their housing benefit calculated by a reduction of:

14% of the total eligible rent for under-occupation by one bedroom; and

25% of the total eligible rent for under-occupation by two bedrooms or more.

Note well that the guidance, the official guidance that HB departments at local authority’s have to follow and especially that the guidance says bedrooms,  It doesn’t say spare room or study or boxroom it says BEDroom.

Yet at point 12 this official guidance says: –

We will not be defining what we mean by a bedroom in legislation and there is no definition of a minimum bedroom size set out in regulations. It will be up to the landlord to accurately describe the property in line with the actual rent charged.”

This says an awful lot when you read it carefully.

  • Firstly, the DWP or government will NOT be defining what a bedroom is.  They could define it if they so wished but they are not doing so.  This is deliberate policy from government.  That brings back my earlier question I posed last week – How can you tax something that you can’t and indeed in this case WON’T define?
  • Secondly it says there is no definition of a minimum bedroom size set out in regulations.  That is correct if the government mean Housing Benefit Regulations (HBR) which does not define what is a bedroom in terms of size.  Yet Housing Law does say out what is a minimum bedroom size in HMO regulations and in various other places.  A single bedroom’s minimum size is 70 sq/ft.  70 sq/ft is 10 foot by 7 foot so if the smallest room is 9 foot by 7 foot it is 63 sq/ft and is not a full bedroom – NB – it is accurately 0.9 of a bedroomYou can call it a boxroom, study, cot-room or anything else you like but you cannot call it a bedroom.
  • Thirdly – It will be up to landlords to accurately describe the property.  To describe the property accurately then the property will not be a 3 bed property but a 2.9 bed property and this is very significant.

Re-read the official guidance above which says the bedroom tax will apply if the household under-occupy by ONE BEDROOM.  In this case they would not as they would under-occupy by 0.9 bedrooms which is less than ONE bedroom and the bedroom tax deduction of 14% would and could not be made.

Joe you are being a bloody pedant.  There is no such thing as 0.9 of a bedroom or any fraction of a bedroom!  Not at all and the bedroom tax regulations include the fractional bedroom as part of the policy.  A child 15 or under is entitled to 0.5 of a bedroom says the bedroom tax guidance as point 7 makes clear:

“One bedroom for each of the following:

a couple
a person who is not a child (aged 16 and over)
two children of the same sex
two children who are under 10
any other child, (other than a foster child or child whose main home is elsewhere).
a carer (or group of carers) providing overnight care

As is clear from the above a child under 16 has to share and one bedroom is applicable to “two children of the same sex” which means each child is ‘entitled’ to 0.5 of a bedroom – the fractional bedroom is inherent within these HB regulations.  An 11 year old child needs a single bedroom – a full bedroom is his sibling is female and vice versa.  Yet until the age of 9 they are entitled to 0.5 of a bedroom, that is what the regulatory guidance says.

The same guidance, which HB officers must follow, in determining the bedroom tax MUST involve HB officers taking a view on what constitutes a bedroom.  They cannot make a decision without doing so. Yet the same guidance wont define a bedroom and places this on the landlord to describe accurately.  So if the landlord does describe accurately then the 9 x 7 foot room is 0.9 of a bedroom and not a bedroom.  Further HB cannot dismiss this as not being valid as all landlords are doing is what the guidance says – accurately describing the bedrooms. Moreover, if a landlord does describe the property as 2.9 bedrooms then the HB officer must accept that.  If the HB officer does not accept that they are acting in breach of the guidance.

So, What is a bedroom?

Last week many ‘professional’ discussions developed on LinkedIn and other places and before I put forward this 0.9 of a bedroom argument.  A bedroom is something you can fit a bed into was one such comment; another was if your tenancy agreement says you rent a 3 bed property then it is a 3 bedroom.  Both of these are fundamentally flawed in my view.

Something you can fit a bed into? No.  My first post last week was brought about because Reigate council rightly and successfully prosecuted a landlords for renting out a room that was 4.5 sq/metres – or in imperial 48.5 sq/feet.  A court rules this was not big enough to be counted as a bedroom.  If as I maintain that a single bedroom is 70 sq/ft then 0.5 of a bedroom which the government see as fit to rent to a 15-year-old boy is just 35 sq/ft.  Those points deal with the size issue.

Yet a bedroom is more than a room where you can fit a bed into.  What about wardrobes?  If a bed can fit in but the room is too small for wardobes then where do the wardrobes go?  In a wardrobe room? How about a dressing table or even a dirty laundry bin or anything else we normally or ordinarily associate with being part of a ‘bedroom?’ If a bedroom has its ordinary meaning in law when a challenge to the bedroom tax and minimum bedroom size emerges which it undoubtedly will, then a ‘bedroom’ must in terms of size include enough space for a wardrobe.

Further, as I have said is a deliberately emotive point, if an asylum seeker, no let’s make that the worst kind of asylum seeker, the chancer who is really just an economic migrant has to have 70 square feet as the minimum bedroom size then why should a strapping 15-year-old British child have a law or regulation which entitles hom to just half of this?

The tenancy issue.  Only a court can rule on what a tenancy says it is.  A tenancy agreement can title itself a “Bare License” which is the lowest form of security of tenure yet a court could rule it is a secure tenancy which is the highest level of security of tenure.  Absurdly a tenancy agreement could say the moon is made out of cream cheese.  More practically many tenancy agreements have in the past held restrictions in their wordings such as No Pets etc.  Yet the courts have found these to be errant in law and/or breach the unfair terms of a contract which is what a tenancy agreement is – a mere contract that is capable of being examined and changed by a court of law.  Just because a tenancy agreement says it is 3 bedrooms doesn’t mean that the property contains 3 bedrooms.  It could be just 2.9 bedrooms!

What is to stop a social landlord re-classifying a 3 bed as a 2.9 bed?

Absolutely nothing as far as I can see.  The above looks at the HB guidance on definition and I have said why the official guidance holds nothing to prevent this.

In discussion elsewhere some have said for a social landlord to reduce classification of the number of bedrooms would put them in breach of covenants they have signed and agreed to – or simply it would place social landlords in a difficult and legally exposed position if they did reduce the number of bedrooms.  Yet that view assumes a reduction from a 3 bed to a 2 bed or a 4 bed to a 3 bed – a whole integer and not a fractional basis.

If a social landlord did re-classify a 3 bed as a 2.9 bed property are they in breach of any such covenant?  Highly unlikely.  Would investors still see this as a 3 bed to all intents and purposes? Yes?  Would the investors see this as a smart move and actually increase confidence in lending? Yes.

To explain.  I have highlighted the word ‘smart’ and for very good reason.  Lord Freud back in 2012 when this official guidance was released said he expected social landlords to act ‘smartly.

Lord Freud is adamant that the government will not define what a bedroom is for the purposes of the policy. ‘It is up to landlords to determine that and they are perfectly capable of doing that,’ he says, speaking slowly and deliberately. This has led to concerns that landlords could reclassify large numbers of properties to allow tenants to avoid the tax – a move which will reduce rental income. Some fear this could breach existing lending agreements and lead to legal challenges from tenants over what constitutes a bedroom.

Lord Freud says: ‘My own expectation is there will be a bit of it [reclassification] but it won’t be a widespread, wholesale move because it has income impacts.’

On the point about legal challenges, Lord Freud, pauses, choosing his words carefully. ‘I’m clearly not expecting that outcome and I’m expecting landlords to act appropriately and smartly,’ he says.”

If all social landlords followed this guidance where the smallest room was less than 70 square feet and so many of them are by ACCURATELY reclassifying them as 2.9 (or 2.88 or 2.97 or whatever) then they are acting very smartly indeed.  Their tenants would NOT be subject to the bedroom tax and they would not be at risk of tenant arrears building up.  Their tenants would also see that social landlords are NOT being complicit in the bedroom tax regulations and the regulations state it is what the landlord confirms the property to be.  Investors in social landlords would admire this smartness that even Lord Freud foresaw.  And just as Lord Freud said appropriately and smartly then the 2.9 bedroom definition is also appropriate as it is accurate and follows the guidance on the bedroom tax his department gave to all local authorities.

Re-classifying 3 beds, assuming it is accurate, at 2.9 bedrooms or anything up to 2.99 bedrooms (69.99 square feet) is a very smart and I would argue practical way forward for social landlords.

The DWP says 83% of all properties subject to the bedroom tax under-occupy by just 1 bedroom and that includes a lot of 3 bed / 4 properties in which tenants do not under-occupy yet are still subject to the pernicious bedroom tax.

In summary by social landlords adhering to the guidance – and they need to consider it and give due regard to it just as LAs do – re-classify 3 bed properties as 2.9 bed properties then this is a legitimate way around the bedroom tax that will see social landlord and social tenant benefit – It is smart and its accurate and its appropriate.  Even in legal terms if this means tenants agreeing a deed of variation to the tenancy which reduces the property from a 3 bed to a 2.9 bed then this is a 5 minute job that will be agreeable to all.

Even if you think this is not ‘appropriate’ then what the above discussion does is highlight the irrationality of the bedroom tax policy.  How ill-thought through it is, how it clearly has not been considered, how the impact assessments it has had are frankly not worth the paper they are printed on and how this pernicious policy is doomed to fail.

The bedroom tax is patently unjust and I keep coming back to the simple questions – How can you tax something you wont define?  A no taxation without justification rallying call.  How can HB officers make a decision if they have no guidance on what is a bedroom?  What, if anything can a HB officer do if a landlord says the property is 2.9 bedrooms?  As far as I can see nothing.  If they do then are they acting in an ultra vires capacity?  What are HB officers to do if the landlord says it is a 3 bed but the tenant says it is a 2.9 bed property?  Another set of questions emerge; yet the tenant shouldnt need to have to argue that as the landlord should accurately confirm it is 2.9 bedrooms.  If the landlord doesn’t say it 2.9 bedrooms then has the tenant got a legal case against the landlord, which the tenant will undoubtedly hold as complicit in the bedroom tax? The legal opinion I have is that they would.

Tenants taking legal action against landlords is an interesting issue.  Hold on Joe legal aid wont cover that so it wont happen?  Yes there appears some truth in that but the bedroom tax affects at least one in three applicable social tenant households and so there is a huge public interest here which I can foresee a public interest case being made.

HB is claimed by 3.39m social tenants and the bedroom tax affects 660 – 670,000 households so that would be 1 in 5 ordinarily.  Yet the bedroom tax doesn’t apply to pensioners or those of pensionable age of which the HB figures say 1.29m claimants are 65 or over and a further 1.04m claim Pension Credit meaning that the bedroom tax applies to much less than 3.39m.  A good estimate is 3.39m less a % of the 2.33m that live in social housing which at about 70% is about 1.6m at a conservative estimate.  So we arrive at about 1.7m or so applicable HB claimants in social housing that could be affected and so the 660 – 670,000 who are becomes about 33-40% of all applicable social housing households on HB are affected.

Would it be smart do you think for every social landlord to donate £5 for each social household affected for a class action legal case on what is a bedroom?  I think £3.3m would be a cheap cost for social landlords to pay to have the matter of what is a bedroom challenged in court! I think it would be very smart don’t you Lord Freud?

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20 thoughts on “The Bedroom Tax just doesnt measure up…and how to get around it!

  1. One solution put forward has been to rent out the extra bedroom/s. Would the minimum bedroom size apply to all lodgers, even if it does not apply to the tenants? If it comes down to each local authority to apply rules for HMOs, can it be challenged that some authorities prohibit lodgers in small bedrooms while others don’t?

  2. I agree Karen, these welfare cuts are deliberately targeted at one section of society, the poorest.. My only worry Joe is that if a class action was threatened wouldn’t the government just move the goalposts again by changing the legislation?

  3. of the 660,000 affected by this tax around 420,000 have one disabled member of the household. These are very vulnerable people. I also think people need to be very careful about the idea of the lodger, having a stranger in your home with children or vulnerable adults could be a recipe for disaster. I wonder if we could see legal action against councils as a result of tenants being advised to take a lodger and that leading to abuse against vulnerable people?

  4. We have a three bedroom council House, it has been ADAPTED for my husband who is Severly Wheelchair disabled, the council adapted the two living rooms into one by placing a through floor lift in and one doorway, three rooms have ceiling hoists, a son has one small bedroom and the other two have a large doorway knocked through to accommodate my husband in small front bedroom as he has through florr lift and a profile bed, then me his wife through the other side caring 24/7 but cannot share his room because of his needs and adaptations, now they are saying we have a FOUR bedroom as theres three up and one down meaning downstairs living area can be used as a bedroom, but he would be in the frontroom and no-one would have any quality space to live in.
    What do they want.. our BLOOD?
    When the Housing disability team for the council did all this work they should have changed the specs for the house to show the room space as its being used for now while we occupy it, because i’m damned if im leaving here unless in a BOX.

  5. If you have a house with 2 bedrooms next to each other the landlord could knock down the wall between and call it a 1 bedroom property. Then a divider or curtain or blind can be put up. That then begs the question:- What is a wall, what is it made of and how much of the space does it have to take up (or not take up) to be classified as a wall? If there’s a door between the two can the door be removed to call it 1 bedroom? Hmmm.

  6. Fife Council define the description of the house for let in the tenancy agreement and they will apply the charges accordingly. There is room for rational argument, but with regards to the emotive arguments, as you put it, people could be moved from homes they have invested heavily in and moved to a really bad area. It’s a completely different proposition from moving from and to private housing. The possible trauma suffered cannot be underestimated and that is not a fluffy issue. Already disabled people I know are very distressed by the letters they have received asking them to move or pay up. They just do not have the money.

    1. Tricia

      Just seen this and I fully take and accept your point. It’s an incredibly important point too.

      I wasn’t attempting to make or say the real practical issues are fluffy, far from it; rather my point was that challenge to any policy can’t and shouldn’t rely just on emotive bases which, to date, the bedroom tax argument and challenge has been.

      One other point. Fife Council (how do you spell teuchter by the way?) tenancy agreements could state the moon is made out of cream cheese or say you can only pay your rent on a wet Wednesday in February when Mars is rising in Venus or any other such view or term, yet it doesn’t make it the law. Any landlord can describe a property with 3 rooms each measuring 6ft x 6ft as a 3 bed property yet none of these are a bedroom and so the law would say it was a bedsit…even if you signed for a 3 bed property. The tenancy agreement is not definitive it is merely a contract that is subject to the rule of law and nothing more

      Joe

    2. I’ve just had a tweet on my timeline from @FifeCouncil which says “cllrs agree Fife won’t change housing allocations policy to react to welfare reform; discussing impact and options with individuals” .

      Not sure how it’s going to deal with those who are already tenants but I know some family members are becoming concerned that they may be made to move.

  7. This 2.9 bedroom idea……..how do you measure the room? – If there’s a ‘box’ for the stairs below the room in one corner, am I correct in assuming that portion doesn’t count as part of the room size (because the floor’s not flat under the box either, there’s a slope there) though wall to wall the room is 10’x 7′ and would otherwise be 70 square feet?

  8. i have been engrossed in reading this article, even though i am not affected by the bedroom tax in any way. i think that anyone affected by it should be working any angle possible, and i think the 0.9 bedroom argument is solid. but the one thing i clicked on to, that nobody has yet discussed is how you define a “couple” – if a man and woman were to have a child, as a couple they would be entitled to a 2bed, however surely if they were to separate, but decide to co-habitate platonicly for the sake of the child, then they would be entitled to a 3bed, would they not?

  9. If you’re claiming social security benefits the DWP go all out to prove in this situation (or anything remotely like it) that you’re in fact a living-together couple, whatever you say about separation, a platonic relationship etc. etc. Even cooking your meals together would make you guilty of coupledom. With chronic housing shortage and childcare needs to be met, you’d think there must be some who’ve won against officials in this sort of argument. I hope so, but I doubt it.

  10. I am affected by this bedroom tax, I am currently on incapacity benefit and I am currently unable to work due to having broken vertebrae bones in my neck trapping nerves causing serve pain and loss of feeling in my shoulders, down to my arms, I also suffer muscle spasms causing me to lose grip on items that I hold in my hands ( I am including this information to help explain my predicament, I am too sick for work, and not sick enough to be classed as disabled ).

    I currently live with my partner of 14 years with our 13 year old son in a 3 bedroom housing association semi detached house. ( we did have 3 other children living here until a few months ago when they all moved into their own homes ).

    Due to my condition we are unable to stay in the same bedroom or sleep in the same bed, as I do not sleep much due to the amount of pain I am constantly in, and I would keep my partner awake most of the night, I know that this is not taken into account and we still will have to pay the full spare bedroom tax of 14%, even though we do not actually have a spare bedroom.

    One of the bedrooms size is 7 foot 11½ inches by 9 foot 3½ inches wide, but the room also has a built in cub-board which covers about 10inches out from the wall, I worked it out to be around 66.03 square feet ( without taking into account the cub-board, which can not be removed as it is part of the staircase supports ).

    I keep reading posts stating that in the housing act 1985, a upstairs room under 70 square feet is not classed as a bedroom as it is too small, is this correct and are housing benefit departments taking this ruling seriously or are they ignoring it completely?.

    I also think that the government has not taken into account that a lot of families who can not afford to pay the bedroom tax will move to the more expensive private sector ( so in the end the housing benefit department will be paying more benefit for people to live in smaller properties, as there will not enough smaller properties to cover demand, as where I live in South Wales, nearly 90% of the housing association properties are 3 bedrooms as there was more demand for this type of properties, but with the demand now for small housing the demand will be far higher that most housing associations or councils will be able to supply,

    My current house rent is £82 per week, the local area’s private sector average is £95 per week ( my daughter rents a 1 bedroom flat from a private landlord at £80 per week and that is cheap for around here. ), so if you work out the extra £13 per week for a 2 bedroom house for a small family the housing benefit section will be paying and extra £676 per year for 1 family compared to that same family living in a housing association house ( I know of at least 5 family’s in my local area that have moved from the cheaper housing to the private sector for them to save money, this alone will cost the housing benefit department from my local authority £3380 for the first year, and this is using the cheapest private section rent in my area, most of them cost a lot more, plus the private landlords are increasing the rents as they know that small family’s will want to move to save money, if you work this out to cover the whole of the UK, its going to cost millions more that if they have left it the way it was.

  11. Please read the 1985 Housing Act on ‘overcrowding’ – Our youngest boy (age 7) occupies a small room which (due to size) is only big enough for a ‘half-person’ (under 10 years – according to the Act), our eldest boy occupies a room which (due to size) is only big enough for one person (not one and a half – according to the Act) and yet our housing agency officer from Devon & Cornwall Housing (www.dchgroup.com) said “…well, I’m still going to say it’s two children, two bedrooms!” and we therefore have to pay the bedroom tax top-up! How do we make them describe our house accurately (or ‘smartly’) and not force us to be overcrowded and call it over-accommodated?

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