In a written answer yesterday the Tory government through Caroline Nokes the Parliamentary Under Secretary at the DWP confirmed the back door bedroom tax for pensioners living in general needs social housing is to apply.
The first paragraph correctly states the circumstances as to when this applies (2019) and to whom.
- Note well the condition which says “…and only where tenancies have been taken out or renewed on or after 1 April 2016.“
Each year in social housing sees on average 385,000 new tenancies and 28% of those goes to the pensioner household. This is circa 108,000 new pensioner tenant each year in general needs social housing that have been taken out. By April 2019 this figure becomes 324,000 pensioners who could be affected
There are no figures available for existing tenancies which are renewed each year yet if for example one member of a pensioner couple dies or goes into a care home then that may see a renewed tenancy as a former joint tenancy becomes a single tenancy.
Also as a number of tenancies issued over the past few years have been maximum 2 to 5 year tenancies as the government directs social landlords to issue then there is also a possibility of a renewed pensioner tenancy occurring regularly.
There are no figures for the above two scenarios yet they will both add to the 324,000 figure I outline.
Caroline Nokes also says, correctly, that this only applies where the tenants social rent exceeds the local housing allowance (LHA) rate and goes on to give the opinion – which is wrong in fact – that this will only apply if pensioners substantially under occupy as it can apply to pensioners when they fully occupy a property and have no under occupancy at all.
The LHA rate can only ordinarily be the 1 bed LHA rate as that is all that the single pensioner or pensioner couple is entitled to. I have said before this means the pensioner or pensioner couple in Hull where the 1 bed LHA rate is the lowest in England at £69 per week could have their housing benefit cut if they live in a 1 bed general needs social housing property. The LHA maxima cap policy thus sees pensioners have a cut in their housing benefit when they fully occupy and do not under occupy at all.
For a pensioner or pensioner couple to under occupy at all they need to live in a 2 bed property as their entitlement is for 1 bedroom and the average 2 bed social housing rent is below at £89 per week (ignoring the much higher £125 per week under the social housing affordable rent model.)
What flows from this is that in every local authority area of the country where the 1 bed LHA rate is less than £89 per week will see the pensioner pensioner couple get a cut in their housing benefit (which in essence is this back door bedroom tax for social housing pensioners.)
There are 44 such areas (BRMAs) that have a 2 bed social housing rent level which is below the 1 bed LHA rate and that table is below.
If we than say that substantially under occupying means those pensioners who have 2 or more spare bedrooms then the LHA Maxima policy – the back door bedroom tax cut to Housing Benefit – will apply to those areas where the 1 bed LHA rate is lower than the 3 bed general needs social housing average rent level of £100 per week. This becomes 80 of the 151 BMRA areas of England.
Yet we need some very specific figures and below is a small sample of council areas that shows just how much housing benefit will be cut from the pensioner or pensioner couple based on actual rents in those areas at a social rent level taken from official figures.
The pensioner couple living in a 3 bed property will see cuts of over £1500 per year in these low rent and low LHA rate areas and will need to find these rent top-ups from their state pension or savings.
There are estimated to be over half a million pensioner / pensioner couples who under occupy general needs social housing that I discussed back in February 2015. Many will be those who have brought up their children who have now flown the coop and have their own homes as this is a typical finding of the bedroom tax.
These social housing pensioner households are not subject to the bedroom tax because they are pensioners as the government exempts them … YET … the government does NOT exempt pensioner households who live in the private rented sector.
So when Caroline Nokes says above in her parliamentary written answer that:
“Pensioners in the private rented sector have been subject to Local Housing Allowance rates since 2008. It is therefore only right that we bring parity of treatment across both sectors …”
… what Carline Nokes is admitting is that the LHA Maxima Cap is the Tories back door pensioner bedroom tax to begin in April 2019.
UPDATE 15 March 2017
I forgot to mention the back door bedroom tax for pensioners under Universal Credit which has NO cut off date and the LHA Maxima cap applies to all existing and future pensioners not just those new or renewed since April 2016 as Damian Green the DWP minister stated back in November.
For Universal Credit, to ensure simplicity and a streamlined process, Local Housing Allowance rates will apply to all new and existing tenants, again only where their social rent is higher than the relevant Local Housing Allowance rate.
This still means that a pensioner in Hull cannot have their rent paid even if they fully occupy while the London pensioner household can have 4 spare bedrooms and have all of their rent paid due to the perversely high 1 Bed LHA rate in the capital as I detailed here