What is the bedroom tax and how does it affect your housing benefit

The bedroom tax is a shorthand term, and a somewhat misleading one. It is not a tax in the traditional sense. The formal name is the under-occupancy charge, and what it actually does is reduce the housing support a social housing tenant receives if they are considered to have more bedrooms than their household needs.

It applies to working-age tenants who receive housing benefit or the housing cost element of Universal Credit, and who rent from a council or housing association. It does not apply to people who rent privately, and it does not apply to pensioners.

How the reduction works

If you are assessed as having one extra bedroom, your housing benefit or housing cost support is reduced by 14%. If you are assessed as having two or more extra bedrooms, the reduction is 25%. This means that even if your actual rent has not changed, the amount the government contributes towards it is lower. You are expected to make up the difference yourself.

The assessment is based on how many bedrooms the rules say your household needs, not how many you actually use. Couples are expected to share a room. Children under 10 are expected to share regardless of gender. Children aged 10 to 15 are expected to share with a child of the same gender. Adult children or other adults living with you may or may not count towards your bedroom entitlement depending on the rules.

Who is exempt

Several groups are exempt from the bedroom tax or may be able to keep a spare room without a reduction. These include households where a disabled person requires an overnight carer who does not live with them permanently, households that include a disabled child who cannot reasonably share a room due to their condition, and armed forces personnel who are away from home.

If there is a room in your home that has been specifically adapted for a disabled person, this may also be taken into account. The rules around exemptions can be complex and worth checking in detail if you think one might apply to you.

What you can do if it is affecting you

If you are affected by the under-occupancy charge, there are a few options worth exploring. You can apply to your local council for a Discretionary Housing Payment (DHP), which is a top-up payment for housing costs that is separate from standard benefit entitlements. DHPs are not guaranteed and are subject to local funding, but they exist specifically to help people in difficult housing cost situations.

You could also ask your housing association or council to move you to a smaller property if one is available. This removes the under-occupancy issue entirely, though waiting lists for social housing can be long and it may not be a quick solution.

Getting your full entitlement

Many people affected by the bedroom tax are not claiming all the other support they are entitled to. Council tax reduction, free school meals, Healthy Start, Carer's Allowance, and other benefits may be available depending on your household. It is worth doing a full benefits check to make sure you are not missing anything.