Tories confirms pensioner back door bedroom tax of £1500+ per year

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.

  1. 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.

In all of the above areas the pensioner or pensioner couple will get this back door bedroom tax cut to their housing benefit as they have 1 bedroom too many.

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


10 thoughts on “Tories confirms pensioner back door bedroom tax of £1500+ per year

  1. Dear Joe

    Thinking about your latest post:

    1. There are a number of pensioners receiving HB who are affected by Riverside’s plan to raze the Calverley (Beckenham) estate and build twice as many dwellings, at least half of which will be ‘private’. If they are offered new replacement homes when the site is redeveloped, will that inevitably involve new or renewed tenancies (hence after April 2016), and will they be caught in this trap?

    2. Riverside’s story is that pre-existing tenancies will be preserved, and rents will remain the same (the same as what, is not clear, as service charges are rising drastically now, and it is hard to see how the rent for the new property can be automatically transferred from a probably very different demolished property; wouldn’t the Rent Services have to be involved?). Also, if some still have the old ‘secure’ tenancies, how can these be applied to a completely different property, since secure tenancies stopped being given in the 1980s? I know a childless couple who some years ago were decanted into a much better 2-bedroom flat from a 1-bedroom because major repairs were needed. Riverside took over two years (and even then the claimed repairs were dubious), by which time the couple were settled into the decant property. I helped them fight to retain that property, and we won – however I recall that the secure tenancy they had had became an assured tenancy in the decant property when their occupation of the decant became permanent.

    3. Some pensioner tenant couples or single parent pensioner tenants currently have two (or occasionally more) bedrooms, but the young have flown the nest. If they receive HB they are still at present within the Local Housing Allowance for their properties, and not (as secure pensioner tenants) subject to the bedroom tax. In allocating them a replacement new build property, can Riverside insist that they can only offer a one-bedroom because such tenants no longer need two? The impression Riverside gives is that offered accommodation will be ‘like for like ‘, but I am very suspicious.

    I see that the Lambeth Loughborough Estate (now belonging to Guinness) ex-tenant won her case.


    Gillian (Eisele )

    Sent from my iPad


  2. Might be teaching Granny to suck eggs here, but:
    The good news is that usually, when a spouse dies, the remaining tenant would succeed the tenancy, which means neither a renewal, nor a new tenancy. The same applies with an assignments. The complication could arise from tenants understanding that fact when they come to make a change to their HB claim.

    Changes due to relationship breakdown, however are usually done via a surrender/regrant, which IS a new tenancy. This also means that a tenant who removes an abusive partner from their tenancy would be forced into LHA. Fair much?

    The issue for pensioners will be with the huge number of tenants who transfer each year. Irrespective of the type of tenancy(or indeed the rent type) they’re granted, that would always be a new tenancy. Given that the Govt want to encourage older people to downsize, its just another way of getting them into the realm of LHA and away from full HB eligibility. The same will happen when fixed term tenancies come to an end and a new term is granted.

    Every which way you go, means LHA, basically. They’ve found as many ways as possible of speeding up conversion to get rid of HB levels altogether.

    1. The added issue is that under UC this will apply to all pensioner households new and existing (I added this as an update earlier today) and the impacts this will cause.

      Firstly, the demand for 1 bed SRS properties goes through the roof as the over half a million pensioner household who now under occupy seek to downsize (which also has a knock-on affect on all other non pensioners seeking a 1 bed eg bedroom tax households)

      Secondly, it gives a hugely increased SRS housing need for new 1 bed properties yet these are the most cost-inefficient to build and give less profit margin and will likely not be built for those reasons.

      Thirdly, the only possible way to build 1 beds to get anywhere near the increase in demand is to build and let at affordable rent levels or private rent levels which only compounds the problem as the average 1 bed AR rent in the regions is £112 and average PRS level 1 bed is £140 – and the average 1 bed LHA rate outside of the South East is £97.43 which gives a £15 to £43 per week effective HB cut under the LHA and UC.

      Fourthly, the above has not factored in that only 1 in 5 HA’s actually build new homes and that the HAs collectively only built 40k properties – a record high – last year and it would take 13 years just to meet this added 515,000 estimated under occupying SRS pensioners and if 100% of all new HA developments were 1 bed properties!!

      Given just these few problems of many more one wonders why social landlords have been so apathetic (and ignorant?) to the pensioner impacts from UC and LHA maxima policies!

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