Plans by the coalition to penalise social tenants living in homes deemed too large for their needs could cost families in Manchester up to £926 per year, new figures reveal.
The Government has previously estimated that 120,000 families across the North West will lose an average of £624 per year under the new social sector “size criteria”.
But analysis by the National Housing Federation, which represents housing associations, shows for the first time the true extent of the cuts faced by many families.
Based on cuts of up to 25% of a family’s housing benefit that the Government is considering introducing in 2013, a household deemed to be under-occupying a three-bedroom home in Manchester faces losing up to £18 per week of their housing benefit – or £926 per year.
Such a household would be forced to choose between going into debt, struggling to meet payments by cutting back on essentials, or trying to move – even if no suitable alternative properties are available.
Under the current system, social landlords allocate families a home based on an assessment of their needs. This may mean that teenagers are given their own bedroom and an additional bedroom may be provided to young couples planning to start a family. Where a family is out of work, housing benefit covers the rent, which is far lower than in the private rented sector.
Under the new size criteria, a family may be penalised for “under-occupying” even where every bedroom in the home is in regular use. For example, benefit may be cut where teenagers have been given their own bedroom, rather than being forced to share. Separated parents will be penalised for keeping a “spare” bedroom for when their children visit. And foster parents will receive a cut even where their bedrooms are occupied by foster children, who for benefit purposes do not count as part of the household.
Anyone deemed to be under-occupying by one bedroom stands to lose up to 15% of their housing benefit and those considered to have two or more “spare” bedrooms – even if they are in use – will lose up to 25% of their benefit. Two-thirds of those affected are disabled, the Department for Work and Pensions has admitted.
Federation analysis, using new figures from the Department for Communities and Local Government, shows that the average social sector rent for three-bedroom properties in Manchester is £71. This means affected families face losing between £11 and £18 per week – or between £556 and £926 per year.
The under-occupation penalty, part of the Welfare Reform Bill, will hit 670,000 working-age families across Great Britain when it comes into force in April 2013.
The total affected is forecast to rise to 760,000 by 2020 as the state pension credit age increases.
Ahead of the Bill’s Report Stage in the House of Lords, scheduled to begin on December 12, the National Housing Federation is calling on the Government to make the rules more flexible, to allow one additional bedroom above that permitted by the proposed criteria. Crossbench peer Lord Best plans to table an amendment to this effect but it will need the support of peers from across the political spectrum to stand a chance of making the statute books.
Jon Longden, lead manager for the North West for the National Housing Federation, said: “We have been deeply concerned about this bedroom tax for some time but these new figures show the damage will be far worse than previously thought.
“Hard-up families in Manchester face penalties of up to £926 a year simply because the Government have deemed their homes are suddenly too big for their needs.
“This will have disastrous implications for a huge number of people already struggling to make ends meet in the tough economic climate, including foster carers, grandparents, disabled people and smaller families.
Mr Longden added: “In the vast majority of cases, people will simply not be able to make up the shortfall themselves and could end up being sucked into poverty and spiralling levels of debt.”