Advice for landlords on 'Bedroom Tax'

21st March 2013

Landlords should consider all possible options and use all reasonable means to prevent evictions of housing tenants struggling to pay rent due to the bedroom tax, Housing Minister Margaret Burgess said today.

The Scottish Government has called for the UK Government’s under occupancy measures, that will cut housing benefit for those deemed to have a spare room, to be scrapped.

However, the policy remains set to come into force in April, and the Scottish Government has already made extra funding available to help provide advice and support for those who will lose out.

The Minister has now also written to landlords across Scotland to encourage them to consider the example of Dundee City Council, which is protecting tenants who genuinely cannot make up the shortfall in rent caused by the bedroom tax, which comes into force in April.

The Council has committed that, where the Director of Housing is satisfied that affected tenants are doing all that can be reasonably expected to in order to avoid falling into arrears, they will use all legitimate means to collect rent due, except eviction.

The letter also makes landlords aware that in certain circumstances it may be possible to reclassify rooms so they are not considered bedrooms. For example, this may help tenants who use an extra room to store equipment related to a disability and therefore do not use that room as a bedroom.

Mrs Burgess’ letter also:reiterates Scottish Government opposition to the introduction of the bedroom tax highlights Scottish Government action to help tenants points out the shortfall in discretionary housing payments provided by the Westminster to Scotland to help those affected by housing benefit changes Mrs Burgess said:“I have made the Scottish Government’s opposition to the bedroom tax absolutely clear. Indeed, I put the case for it to be scrapped in the strongest terms to Lord Freud when we met in London.

“Sadly there appears to be indifference to this argument at Westminster, despite strong opposition from across Scotland.

“This will undoubtedly be leaving tenants, some of whom could lose a quarter of their housing benefit in April, seriously worried.

“That is why we have made an extra £2.5 million available to social landlords to ensure people affected by housing benefits changes have the advice and support they need. That is on top of the £5.4 million we have already provided to advice services to help those affected by benefit reforms.

“I have now written to landlords to encourage them to look sympathetically on tenants affected. We already have strong safeguards in place to ensure eviction is an absolute last resort. While we do not want to see tenants run up debts they cannot pay, it is important, in what will be challenging times, that extra consideration is given to people who are having housing benefit taken away.

“Dundee City Council has taken innovative action on this, clarifying that, where tenants are doing all that can be reasonably expected in order to avoid falling into arrears, they will use all legitimate means to collect rent due, except eviction. I know other councils are also working towards a similar position and I hope landlords across Scotland can follow this example.

“There are also circumstances where a bedroom’s classification may be changed and tenants not penalised. Again, I would encourage landlords to consider this possibility and work with their local authority if at all possible.

“But we simply cannot mitigate all the negative impacts of welfare reform or the bedroom tax.

“This illustrates that rather than simply trying to cushion the blows in Scotland, we need the powers of independence to cut them off at source. It would be far better to control benefits and welfare so unfair policies like the bedroom tax are not even considered, let alone implemented.”

Text from the letter includes:

“The bedroom tax also takes no account of circumstances in Scotland. Of the estimated 105,000 households in Scotland which will be affected by the penalty, around 78,000 would need to move to one bedroom accommodation in order to avoid the penalty. Last year there were also 23,000 homeless applications which would require one bedroom accommodation under DWP’s criteria. However there are only around 20,000 social lets of one bedroom properties each year.”

On DHPs:

"The Department for Work and Pension’s answer to this is in Discretionary Housing Payments (DHPs). However, this is inadequate in Scotland. By DWP’s own analysis, London and Scotland will have the same number of people affected by the bedroom tax. However, London is set to receive £56m in DHPs while Scotland will receive £10m.
This is just 6.5% of the total DHP allocation for next year despite having 16% of the total number of people due to be affected by the bedroom tax in Great Britain."

On reclassification of bedrooms:

“I would also like to make you aware of flexibility that exists to classify bedrooms in your properties for the purpose of housing benefit. A process of reclassification is available, on a variety of grounds, for properties where circumstances change. For example, where a tenant requires an extra room to store equipment if he or she is disabled and therefore cannot use that room as a bedroom. The process is one that DWP leave up to the consideration of landlords and Local Authorities and involves landlords contacting their local authority Housing Benefit section to inform them of the change of classification.”

On tenants and landlords:

“We all agree that evictions are seen as a last resort. While we absolutely do not want to see tenants run up debts they cannot pay, or see landlords left out of pocket, this will be a very difficult time, when those who lose out will benefit from extra support and understanding. We have already provided additional protection for tenants through Pre Action Requirements.

“You may wish to be aware of the policy adopted by Dundee City Council which I believe provides a useful template to protect tenants who genuinely cannot make up the shortfall in rent caused by the bedroom tax. The Council has committed that, where the Director of Housing is satisfied that affected tenants are doing all that can be reasonably expected to in order to avoid falling into arrears, they will use all legitimate means to
collect rent due, except eviction. I would encourage you to consider this as a mechanism to protect the most vulnerable of your tenants.”