2012 has already seen 49,730 recipients of Local Housing Allowance (LHA) lose an average of £10 per week as a result of changes in housing benefit brought about by the UK Government’s welfare reforms. In addition, 9,000 (18%) LHA recipients with a disability have lost their £15 excess per week. That’s just under £33M taken out of the Scottish economy in one year alone.
However, from April 2013 housing benefit for all working age people in social rented homes will be linked to the size of property councils believe they need. This change is being called “The Bedroom Tax”, as people will be charged for bedrooms deemed superfluous to need.
In contrast to the changes to Local Housing Allowance already in place, this change will disproportionately impact on households containing a disabled person. DWP figures show that across the UK of a total of 670,000 households affected by the bedroom tax about 450,000 (66%) will contain a disabled person.
DWP Ministers say that they want housing benefit claimants to choose to rent properties that they can afford when/if they go into work.
However, the households affected are more likely to be older than the general working age. The DWP estimates that 55% of the households affected will contain a householder aged between 44 and retirement age. The bedroom tax will also disproportionately impact on women within 350,000 households, for more than half (52%) of all those affected are headed by a single female.
The Scottish Government’s Welfare Reform Project estimates that 95,000 Scottish households will be affected by the bedroom tax alone, losing up to £16 a week in Housing Benefit.
The Scottish Government estimates are useful but probably underestimate the scale of numbers of people who will suffer. This is because it only looks at the impact of a single benefit loss, and doesn’t take account of the fact that many of the same households will also have lost or will lose the contributory benefit part of their Employment Support Allowance due to its time limitation, or failing the Work Capability Assessment and other assessments for Disabled Living Allowance or its successor Personal Independence Payments. They may also face other reductions under Universal Credit in time.
If the DWP’s estimate that two thirds of the households affected will contain a disabled person holds true then more than 60,000 disabled people and their families will be affected by the bedroom tax.
Research commissioned by the Scottish Federation of Housing Associations (SFHA) shows that just under one third of their working-age tenants “under-occupy” their tenancies by at least one bedroom. This means that the number of Scottish Housing Association tenants likely to be affected is somewhere between 24,000 and 31,500. This would cost these tenants between £13.6 million and £18million in lost benefits over a year.
Housing Association tenants most likely to be affected by the under- occupancy rule are single adults, two adult households and single parents (one adult plus children).
More than half of under-occupying tenants are single people (52%). The most common scenario would appear to be “the empty nest”, with 56% of those affected aged 45 years or older.
Although tenants will be penalized for under-occupying, they have little option but to do this, because there is a chronic lack of one bedroom properties in the social housing sector. The SFHA shows that 44% of working-age Housing Association tenants need a one-bedroom property, but only 24% occupy one; and that across all tenants, 62% need one bedroom but only 34% have this. The Scottish Government has estimated that of the 95,000 tenants affected by the bedroom tax, only 8,000 will be able to find a downsized property, due to the availability of one bedroom properties.
Applying the DWP figure of two thirds of those affected by the bedroom tax are disabled people, this means that only 5,000+ disabled people in Scotland will be able to find any downsized property.
For these disabled people, the situation is even more dire. No-where in the legislation is there an acknowledgement that for some, an additional bedroom is essential to accommodate an overnight carer, or a partner who cannot share a bed with the disabled person, or to store medical equipment; and no-where in the legislation is there provision to adapt the downsized property before it can be lived in.
During the same period that Housing Benefit reforms are being introduced the DWP aims to reduce expenditure on Disability Living Allowance (DLA), and its replacement the Personal Independence Payment (PIP), by 20% by 2013/14.
Almost one in five Housing Association tenants and one in six working-age tenants receive DLA, so the impact on both tenants and Housing Associations could be very hard indeed.
If 20% of current recipients of DLA were found to be ineligible, this would be 4% of all tenants. However, the tenants of specialist housing providers for disabled people (such as those in the Margaret Blackwood’s Housing Association) will be most affected by these cuts as they have a much higher proportion of disabled tenants.
Even before benefit reforms began, 20% of Housing Associations / Co-operatives working-age tenants on Housing Benefit said they were in “some financial difficulties”, a further 5% were in, “deep financial trouble”, and 15%, “didn’t manage very well”.
If 40% of working-age tenants on Housing Benefit found finances difficult to manage before the cuts how many are going to be plunged into even greater poverty and debt after they take full effect?
The SFHA is calling, at a minimum, for disabled people who live in adapted properties to be exempt from any restrictions to Housing Benefit. However they also want the UK Government to reconsider the impact of the bedroom tax on all households, urgently.