Local Housing Allowance / Housing Benefit aka THE BEDROOM TAX
The Bedroom tax is a policy brought in under labour in 2005 to limit the amount of housing support you can get depending on your need, this has now come into effect for the social housing sector and has been dubbed ‘The Bedroom Tax‘ by the media. So although private tenants have been subject to these rule for almost 10 years, its only the last few years that social housing tenants are now effected.
Is The Bedroom Tax Wrong?
In a nutshell, NO. I agree that you should not get more benefit for housing space you do not need. Plus speaking from experience I have personally seen the effects of this policy, and I agree that families with more need than my own should be able to afford a house suitable for their family, take my family as there are only 2 people in my household as we do not have children, then I think that makes sense.
There is nothing wrong with the policy, as if you have children with disabilities then they are exempt from the policy, that is providing they have a genuine need for their own room, such as needing a wet room, or a room adapted for their disability, however just because two of your kids don’t get along is not grounds for their own room.
What is Wrong with The Bedroom Tax?
Simple. You Don’t Get Enough Money!!!
The actual problem with the policy is that the amount of money you get is WRONG and is basically just made up by the Valuation Office Agency.
If you are in receipt of either Housing Benefit if you live in social housing or Local Housing Allowance if you live in private housing, I have a fact that you will not like one bit. That is that the levels of benefit you get are actually just made up from fictitious figures.
So who sets the benefit levels
The level of both housing benefit and local housing allowance is set by the Valuation Office Agency a part of the HMRC.
I will start by telling you how the figures are worked out.
How your Housing Benefit or Local Housing Allowance is worked out.
1. The first criteria is your entitlement, this is based on how many adults there are in your household and how many children. This gives you the type of property you are entitled to, such as if you are single or a couple you will be entitled to the rate for a 1 bedroom property, if you have children you will be entitled to more according to the ages and sex of your children.
2. The second criteria is the area you live in, some areas you will get more money as the average rents are higher, some areas you will get less.
Given these two factors together gives you your weekly benefit entitlement.
A couple living in Darlington will be entitled to £75 per week or £300 per month based on a 1 bed property rent level in Darlington
To check your entitled visit the VOA website – http://lha-direct.voa.gov.uk/search.aspx
Note – This calculator is for Local Housing Allowance and not Housing Benefit.
It should be said that the way Housing Benefit and Local Housing Allowance rates are calculated is based on the same needs, however it is applied slightly differently. Housing Benefit is a reduction to your benefit amount, known as over occupancy charge aka Bedroom Tax this amount is mentioned within your benefit award letter, in Local housing Allowance the amount you receive is reduced based on the same eligibility assessment and the amount you receive is detailed in your award letter.
Both are in essence the same thing, a benefit for housing needs with a reduction based on an eligibility assessment.
What’s wrong with these figures
1. The first thing that is wrong with the figures is that the amount you get is based on only the bottom 30% of rent in any given area. This means that 7 out of 10 people on benefit will not be able to afford the rent for their area.
2. Now the second thing wrong with these figures is most annoying, the figures are meant to be based on actual rents for any areas from the last 12 months. I noticed from the rent levels that the VOA Valuation Office Agency, actually states there is a rent in Darlington for £45 per week, I thought this was wrong so I called the local council, who said there is none of their 1 bed properties for rent for £45 per week, I then contacted local estate agencies, again they said they had no 1 bed properties to rent for £45 per week. So I got to thinking that the VOA are just making up these figures.
3. The only difference is that under Housing Benefit you get a reduction known as ‘Over Occupancy Charge’ where as in Local Housing Allowance you get your entitlement. Both are the same thing, you are only getting money towards a rent level for your needs as dictated by government. So yes under both schemes you could have a spare room, just as long as you can make up the shortfall in your benefit to pay for the difference in rent. You must remember that in both Social Housing and Private Sector where you get your house from is different to where you get your benefit from.
I worked with my local MP regarding these figures and after speaking to the chief executive of the VOA and asking for evidence showing these figures. Can you guess what their response was! they refused to show had no evidence to support the rental valuations. This as we all know is rubbish, my thinking is they are just trying to cover their own backs.
Do I Get All My Rent Paid?
The short answer is possibly. If you can find house where the rent is equal too or below the amount of benefit you receive, either Local Housing Allowance or Housing Benefit then YES you could have all your rent covered.
However in reality for this to happen the rent on the house would need to be extremely low, due to the low levels payable.
The same goes for both private and social housing, if you live in either social housing or private rented and are hit with the Bedroom Tax / reduced Local Housing Allowance, yet you can still afford to pay the rent in full by making up the shortfall by other means. You will not lose your home.
So you could get all your rent paid and live in a mansion, with spares rooms and everything. In reality its not likely to happen for two reasons.
- Unless you currently live in social housing, you would be unlikely to qualify for a larger house.
- The levels paid for both Housing Benefit and Local Housing Allowance are so low, you will be lucky if you can find a shoebox to live in.
So as you can see the money you can get under Housing Benefit and Local Housing Allowance is wrong, not only do you only get 30% of the money you should get, but the actually amounts this is based on are just made up. But don’t worry I will be taking this matter further and its my aim for the VOA to show evidence of the rents they are claiming are available.