Your Housing Benefit or Universal Credit will be reduced if the Government says you have too many bedrooms. However, for the next few years, the money that you lose will be replaced from a separate fund.
Politicians at the Assembly have set up a fund to offset these cuts to benefits, meaning that most people in Northern Ireland will not actually lose out financially because of the changes. This fund will be available until March 2020, but politicians have recently announced that they will keep making these extra payments after the end of March 2020.
Applying for extra help
You don’t have to apply for this extra payment.
The Housing Executive will provide the fund with details of everyone who is affected by the bedroom tax. The fund will then use this information to make the right top-up payments to the right people. The process will happen automatically.
Who is the extra money paid to?
This depends on how you currently receive benefits towards your housing costs.
- If these go directly to your landlord, the top-up payment will go straight to the landlord.
- If these go into your account and you then pass this to your landlord, the top-up payment should also go into your account. You will need to keep a close eye on your payments, as the top-up payment probably will not arrive in your account on the same day that your other benefits do.
People who are not entitled to help
Almost everyone affected who receives help with housing costs and rents from the Housing Executive or a housing association will get this top-up payment. However, some people who transfer or swap homes will not get this extra money.
Your top-up payment will stop if you
- move to another property owned by the Housing Executive or a housing association and
- the new property has the same number of bedrooms or more bedrooms than the one you are leaving and
- you do not have management transfer status.
Private tenants who need help because their benefits don't cover their rent can apply for a Discretionary Housing Payment.
Planning on transferring or swapping your home?
Some tenants who transfer their homes will continue to get the top-up payment. This will only happen if
- your new home is smaller than the one you are leaving or
- you have been given management transfer status.
You’ll need to think about how you will afford to pay the extra rent on this new tenancy. You could think about
- renting out a room in your home to a lodger, or
- asking people who live with you to contribute more towards the rent or
- increasing your income by finding a new job or increasing your hours at work.
Taking in a lodger
Your benefits could be reduced if you take in a lodger. Any money you receive from a lodger will be treated as household income. If you’re going to take in a lodger, you should
- get your landlord’s permission first
- tell the Housing Executive how much rent you are receiving from your lodger
- tell staff for any other benefits that you claim how much rent you are receiving.
An advice agency can help you work out how your lodger’s rent will impact on your benefits.
If you receive less than £7500 each year by renting a room, you do not have to declare this income to HMRC. However, if you receive more than this you will need to complete a tax return and pay income tax on the additional amount.
Living with a lodger can be complicated. Draw up ground rules and make sure that you and your lodger are comfortable with these before making an agreement. It’s a good idea to have some sort of signed agreement with your lodger that deals with how and when rent is paid, as well as how each of you can end the arrangement.