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Bedroom Tax Two Years On

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bedroomtax1Almost two years ago the UK government began a “bedroom tax” which has caused much controversy since it was started.

In reality the bedroom tax is not a tax at all, but a reduction in housing benefits for unused bedrooms. The government likes to call it an “under-occupancy” charge.

The way the under-occupancy charge works is like this:

* Your housing benefit is reduced by 14% if you have one (1) unused bedroom.

* Your housing benefit is reduced by 25% if you have two (2) or more unused bedrooms.

If a household has a three bedroom house, and is only using two of the bedrooms, their housing benefit is reduced will be reduced by 14%.

One of the problems with this is that families that have raised children in a house and have lived there for many, many years, and the kids have moved out, are faced with this reduction. The house they have lived in for 15, 20, or more years, is now costing them more money; money that many cannot afford to pay.

Another big issues with this “tax”, is that those families that wish to move may not be able to find not just suitable accommodations, but also in the area they wish to live, and also the number of bedrooms they qualify for.

A downsized family of four who had a three bedroom home, and now is only needing two bedrooms, or maybe just one bedroom, cannot find a place to move to as there is a limited number of one or two bedroom places.

It was thought that almost 100,000 families were to be affected by this benefit reduction, however only 3,800 one and two bedroom properties were available.

The shadow Work and Pensions Secretary at the time of the benefit change, Lliam Byrne stated, “The big lie behind this Government’s spiteful bedroom tax is now plain for all to see. Ministers like to claim it’s not a tax, but the truth is more than 96 per cent of those hit have nowhere to move to.”

“This hated tax is trapping thousands of families, forcing vulnerable people to food banks and loan sharks, and there is now a serious danger it could end up costing Britain more than it saves as tenants are forced to go homeless or move into the expensive private rented sector. David Cameron’s bedroom tax is the worst possible combination of cruelty and incompetence. He should drop it now.”

The Executive Director at Unite, Steve Turner at the time said, “These figures show beyond any doubt that Iain Duncan Smith has been misleading the public. He tried to spin the bedroom tax as a way of managing housing stock, but in fact it is a cruel and callous attack on some of the most vulnerable people in our communities.”

“The evidence now overwhelmingly shows that the Government has made a grave mistake with this policy. They must abandon it now before more lives are destroyed.”

This lack of housing can clearly be seen in the Merseyside area.

One Vision Housing, who manage the councils waiting list said the situation was “stark”.

There were more than 3,600 who were looking for one and two bedroom places to live, and there were only 18 places available.

The Income Manager at One Vision, Kevin Appleton said, “As of today we’ve got 8,360 people on the waiting list. Of these, 4,859 want one-bedroom homes and on this week’s adverts we had just six available. It’s making life very hard for people whose lives were hard anyway. The demand for three-bed properties has fallen through the floor.”

Clearly this change in benefit was not fully thought out. It should have been thought through and planned possibly gradually, making the change easier for those affected to deal with. In addition, thinking and looking forward as to if there are enough houses for people to move to.

The other unfortunate aspect of this benefit change, and was not thought out, is the disruption of neighbourhoods. As families are forced to move outside their area or neighbourhood, you lose a community.

People that have lived in the same neighbourhood and have known each other for years are now moving away.

bedroomSome Real Examples

I know a few people affected by this change and spoke to two of them.

One person had a three bedroom house and was told they only qualify now for a one bedroom home. This person decided to move as they were fortunate enough to locate a one bedroom flat in the area they had been living. So they moved from a home that they had lived in for 20 years and had raised all their children.

They could no longer afford their previous home as the benefit reduction going from a three bedroom home to only qualifying for a one bedroom home was massive to them. This person was to have their housing benefit cut by 25%, which was £25 a week or just over £100 a month. There was no way they could afford that much of a reduction.

Another family I spoke with who have experienced a reduction on their housing benefit made the decision not to move, and for good reason.

This family have a three bedroom house they have lived in for over 15 years. One of the grown children moved out and on their own years ago.

So now you have two people living in a three-bedroom house, and have lived there that way for many years.

The government implements the benefit reduction, and this family’s housing benefit is reduced by around £48 a month. As benefits are all the family has due to disability, that money is needed, and so is the third bedroom.

The family has a granddaughter that comes to stay and visit in a very regular basis, weekly, and they are required to have a bedroom for the child, yet as the child is not considered a resident at the property, the family only qualifies for a two bedroom house, and so they are penalised and have their housing benefit reduced.

In a sense it doesn’t seem fair.

One hand of the government states you only qualify for two bedrooms, yet another hand states in order for the child to visit their parent and grandparent, a bedroom of their own must be provided.

cuttingBedroom Tax Today

A recent report by the DWP/Department for Work and Pensions stated that 75% of those affected by the bedroom tax and are cutting back expenses due to the benefit reduction, are “sacrificing food and clothes”.

Even with making these reductions in spending it was shown those affected will still struggle to make ends meet,

Shadow Work and Pensions Secretary Owen Smith recently said, “If one policy sums up the cruelty of this Tory government it’s the Bedroom Tax.”

“This damning independent report, published by the DWP itself, shows how this brutal and unfair policy deliberately drives people deeper and deeper into poverty.”

“It’s shameful – especially in the run up to Christmas – that 80% of people hit by the Bedroom Tax regularly run out of money by the end of the week or month.”

“The Tories should learn the lessons from their tax credit U-turn and end this brutal policy.”

Where those affected are making changes:

* Food 75%

* Clothing 75%

* Energy home heating almost 50%

* Leisure 45%

Again, clearly the reduction in the benefit, whilst saving the government money, is hurting many households.

The issue again is that while these families are dealing with this benefit reduction almost two years on, many just like the family I spoke with, are not moving.

And this was one of the suggestions the government gave that would be the outcome of the change.

Only “one-in-five” who were affected by the benefit reduction were no longer affected after almost a year. Which means only 20% of those who had their housing benefit reduced moved.

The Chief Executive of Child Action Poverty Group, Alison Garnham said, “This is a long and deep look at a hugely controversial policy – it really should not have been released just as MPs rise for Christmas.”

“Only one in nine escaped the ‘bedroom tax’ by moving to a different property. The vast majority of those affected were still affected nine months later.”

People are not moving, they will use savings, credit, and make sacrifices in food, clothing and even heating to stay in their homes.

So the “bedroom tax” after almost two years is still not just controversial, but also still not working.

,Almost two years ago the government began a “bedroom tax” which has caused much controversy since it was started. In reality the bedroom tax is not a tax at all, but a reduction in housing bene

This article by Jon Emge was syndicated by the Personal Finance Syndication Network.

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