The bedroom tax is a reduction in Housing Benefit or Universal Credit for people who live in a property that is owned by NIHE or a housing association and that is too large for their household. Its proper name is the “social sector size criteria”, but most people call it the “bedroom tax”.
The decision maker processing your benefits claim will work out how many bedrooms your household needs. If your home has more bedrooms than this and you receive help to pay your housing costs, the amount of help you get will be reduced.
People who rent from a private landlord only receive enough help for the number of rooms they are legally entitled to, no matter how much the actual rent on the property is. The bedroom tax means that people who live in social housing will come under the same restrictions.
Who is affected by this change?
The bedroom tax will affect people in social housing, who receive Housing Benefit or Universal Credit and who have more bedrooms in their home than they need.
People call this change the “bedroom tax”, but it is actually a reduction in your housing benefits. So, you will only be affected by this change if you receive help to pay your rent.
The bedroom tax won’t affect you if you:
- pay your rent without any help from benefits
- are of state pension age
- rent your home from a private landlord or through a private agency
- are living in temporary housing arranged by NIHE
- are living in a home you bought through co-ownership housing.
How does the bedroom tax work?
Your "eligible rent" will be reduced if you are seen to be living in a property that has more bedrooms than you lawfully require. Your eligible rent is the rent due on your home minus any service charges or other costs that benefits won't cover. Your eligible rent is used to work out how much financial help you will get.
Your "eligible rent" will be cut by
- 14% if you have one more bedroom than you require and
- 25% if you have two or more bedrooms over your legal needs.
So, imagine your weekly eligible rent was £70 before these changes and you are a single person living in a 2-bedroom flat. Before this change, you got your full rent paid by Housing Benefit. Under the bedroom tax, you have one spare bedroom and your “eligible rent” will be reduced by 14%. Your new eligible rent figure is £60.20, and that is the maximum amount of Housing Benefit you will get each week.
Who pays the extra money to your landlord?
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, meaning that most people in Northern Ireland will not actually lose out financially because of the changes. You don’t have to apply for this extra payment. It will happen automatically.
So, in the example above the remaining £9.80 will be paid by the supplementary payments fund and you won’t have to pay any additional rent. This fund will be available until the end of March 2020.