Shelter Scotland briefing on the 'bedroom tax'

Shelter Scotland strongly opposes the introduction of the bedroom tax and the blunt and unfair way it is targeted. From April 2013, tenants in the socially rented sector who are of working age will have a proportion of their housing benefit cut if they are deemed to have spare bedrooms beyond their household need.

In Scotland an estimated 105,000 people will be affected, roughly 20% of all social tenants, and Cosla estimates that 40% of those will fall into rent arrears because they simply don’t have enough money to pay. A number of groups should be exempt from the cut – particularly disabled people, foster carers and separated parents with co-visitation rights. Because they are not, there will be large numbers of people forced into financial difficulties, rent arrears and homelessness.

The policy aim is to make a cost saving for the Treasury but is predicated on the assumption that people will be able to make up the shortfall from other income, or move to a smaller property. Evidence from both north and south of the border shows this is not the case. This means both tenants and landlords now face a series of difficult financial decisions about how to respond to these changes.

Shelter Scotland will continue to campaign against these reforms and to lobby both Westminster and Holyrood to mitigate the impacts of this and other welfare reforms. However, given the timeframe for implementation, social landlords should be taking the following actions to prepare for and to mitigate the impact:

1. Identify tenants affected: and their options including their ability to make up the shortfall, downsize within existing stock, mutual exchange and shared tenancies. Current and future allocations should be made in line with the housing benefit size criteria which will be in place from April 2013. If allocations are made that result in under-occupation, tenants should be made aware of future implications.
2. Planning for use of Discretionary Housing Payments (DHP): to maximise the pot of discretionary funding available to try and safeguard income for landlords and mitigate against the risk of increased rent arrears. This will help to make up the shortfall for the most vulnerable tenants.
3. Policy decision not to evict tenants who accrue ‘bedroom tax’ arrears: All those who can pay their rent must do so, but Shelter Scotland believes all landlords should make the policy decision not to evict those who are forced into arrears solely due to unfair cuts in their benefit entitlement.