Welfare Reform Blog

Minister hints at further 'bedroom tax' support

February 28, 2013

Yesterday’s opposition day debate on the under-occupation rules for the social sector – due to come into force in April – provoked some highly emotive exchanges from MPs and indications from Government that it could look again at extra support for rural communities and foster families.

While the arguments for and against the reduction in housing benefit for working-age social claimants with spare bedrooms, labelled the ‘bedroom tax’, have already been laid bare, there were some fresh details and insight unearthed in yesterday's debate.

Discretionary Housing Payments

The first to mention and flagged up by MPs is the number of affected residents still unaware that their shortfall could be made up with Discretionary Housing Payments (DHP).

While a number of MPs are still pushing for further exemptions, the Government has added a further £30m to the £20m local authorities already receive in DHP and has specifically targeted it at foster carers and disabled people who have made changes to their homes.

Work and Pensions minister Steve Webb said: “I believe that authorities will be able to help about 5,000 foster carers, and about 35,000 wheelchair users living in adapted housing.”

Labour/Co-op MP for Rutherglen and Hamilton West, Tom Greatrex, said DHP awareness just wasn’t reaching residents. “I have been contacted by a foster parent who was contacted by their housing association to say that rooms where people are cared for are counted as spare rooms, but they did not know anything about the existence of the discretionary payment.”

While some housing associations have been actively raising awareness of DHP funding to residents – and have been successful in helping vulnerable residents receive the payments – others would do well to build it into their communications.

Rural communities and Foster families

Much was made of work and pensions secretary Iain Duncan Smith’s alleged instruction to officials to look into the definition of disability, and the way in which the ‘bedroom tax’ would be applied to disability, as reported by the BBC last week.

However, last night there seemed to be more movement on extra support for rural communities where affected residents could be forced to move a long way from their communities if they can’t make up the shortfall.

Mr Webb said: “We are happy to look at the allocation of Discretionary Housing Payments, and at whether we have done enough justice to the needs of rural areas, compared with other areas. We will keep that matter under review.”

There was also the suggestion, the Government could be ready to make more exemptions.

Mr Webb said: “The position on foster families is, I think, shared across the House. If people need a spare bedroom for a foster child, we want to make sure that they have one, and we want to support fosterers. The question is whether that is done better by some blanket exemption or by what we have done in costing what it would take to meet the shortfall for those families and giving the money to local authorities so that a foster family for which this was an issue—it might not be an issue for all of them—can approach the authority and have the shortfall made up.

“My right hon. Friend the Secretary of State and I are entirely open to discussing whether that is the most effective way of delivering that support. Our judgment was that discretionary housing payments gave local authorities the discretion we would want them to have. If for any reason that message is not getting through and is causing anxieties to foster families who do not know about DHPs, for example, or if local authorities have not communicated well enough, we would be happy to look at whether this is the most effective way of supporting families. Where there is a shortfall, discretionary housing payments for this and other measures are available. We want to make sure that people use them when they are in genuine need. Eviction is clearly not something that we are seeking to achieve.”

‘Intentionally homeless’

Mr Webb also put it on record that those made homeless as a result of a “reduction in benefit that is outside their control” should not be considered ‘intentionally homeless’ in law. This followed concern from Labour MP for Aberdeen South, Dame Anne Begg.

Mr Webb said: “Although it is for local authorities to make decisions on homelessness applications as they do now, under current statutory homelessness legislation, if the only reason for the person’s homelessness is a reduction in benefit that is outside their control they should not be considered intentionally homeless by the local authority. I can put that on the record and hope it is helpful.”

'Brave and socially responsible'

Knowsley Housing Trust was praised by Dr Eilidh Whiteford of the Scottish National Party for its “brave and socially responsible” approach after she revealed it had reclassified 600 properties to protect tenants.

She later warned landlords to be “consistent in how they deal with arrears”. She said: “I am not sure we can draw a distinction between someone who falls into arrears because of the bedroom tax and someone who is not under-occupying but falls into arrears because their employment and support allowance has been cut, because their tax credits have been reduced, because they lose their job or because they have fallen sick. The danger is that if some people have their arrears written off and others do not, that will quickly cause resentment between tenants, all of whom are likely to be living on tight budgets and in danger of experiencing significant increases in rent across the board if housing associations budgets come under strain.”

Green Party MP for Brighton Pavillion, Caroline Lucas, warned of the cumulative impacts of the benefit cuts. She said: “In Brighton and Hove, practically every household affected by the bedroom tax will also be affected by the Government-imposed cut to the council tax benefit budget, and a good proportion of them will also be hit by the changes to disability living allowance.

She added: “Of the 1,000 or so households affected in Brighton and Hove, the majority are already struggling with rent arrears of around £2 a week. Where on earth are they supposed to magic a further £16 a week in bedroom tax from?”

To help our housing association and local government clients prepare for the changes, we are urging them to ensure they have an adequate supply of allpay payment cards to issue to new rent and council tax payers from April – giving their residents choice and flexibility to pay locally through the major cash networks, PayPoint and Post Office, online, by text, or over the phone. 

To check your card levels, please contact the Client Care team on enquiries@allpay.net.

You can read the full debate here.

About allpay

allpay offers housing associations, ALMOs and councils the widest range of payment collection solutions, allowing their residents to pay rent and council tax through both of the major cash networks, PayPoint and Post Office®; with a debit or credit card over the phone or via the internet or through a smartphone using the allpay App.

We also collect direct debits on behalf of our clients every date of the month, offering residents a range of frequencies e.g. weekly, fortnightly, four-weekly, monthly, etc.

Blog author Nick Peplow is allpay’s business development director and heads up the company’s work to support housing associations and councils ahead of Universal Credit.