Disabled people short changed over bedroom tax

4 March 2013

Government help for the most vulnerable people hit by the bedroom tax is falling so far short of what is needed to help them it will leave hundreds of thousands of disabled people struggling to make ends meet.

The fund for Discretionary Housing Payments (1) (DHPs) has been given a £30m boost this year as the Prime Minister announced that the extra money would specifically ensure that the most vulnerable people are protected from the bedroom tax cuts (2). But the mismatch between what the Government is taking away in housing benefit, and what the DHP can help offset has left a staggering gap of over £100m (3) in benefits being taken away from disabled people.

Research by the National Housing Federation found that if the £30m of DHP funding was distributed equally among every claimant of Disability Living Allowance (DLA) hit by the tax, they would each receive just £2.51 per week – compared to the average £14 a week loss in housing benefit from the Bedroom Tax (4).

There are about 230,000 disabled people receiving DLA who will lose an average of £728 each per year in housing benefit. With the DHP fund totalling just 6% of the housing benefit cuts made by the Bedroom Tax this year – disabled people are at the forefront of the cuts.

And 100,000 disabled people hit by the tax are living in specially adapted homes, so if they do move new homes would have to be adapted for them at a substantial cost to the public purse.

David Orr, chief executive of the National Housing Federation, says:

"This perverse tax is doing exactly what the Government promised they wouldn’t – hitting the most vulnerable people in our society. They are being penalised for a weak housing policy that for years has failed to build enough affordable homes and reduce the housing benefit bill.

“The bedroom tax is ill-thought and unfair as thousands of disabled people will have no choice but to cut back further on food and other expenses in order to stay in their own homes. The ‘one-size-fits-all’ approach takes no account of disabled people’s adapted homes, of foster parents who need rooms to take children in, or of parents sharing custody who will lose the room for their child at weekends. It is also incompetent as it will cost the nation money rather than saving it. The Government must repeal this ill-conceived policy, but at the very least right now it must exempt disabled and other vulnerable people from these cuts.”

The National Housing Federation is calling on the Government to ensure disabled people receiving DLA, and other vulnerable people, are exempt from the bedroom tax before it comes into effect on 1 April 2013.

Notes to editors

Bedroom tax: From 1 April 2013, Housing Benefit and Universal Credit claimants deemed to have one ‘spare’ bedroom in their council or housing association home will lose 14% of their housing benefit and those with two or more will lose 25%.

The Department for Work and Pensions (DWP) estimates 660,000 people living in social housing will lose an average of £728 per year as a result of this bedroom tax.

1. Discretionary Housing Payments are made from a budget-limited discretionary fund and are often limited to just a few months. They are therefore not a viable long-term solution as they fail to give people with disabilities the assurance that their housing needs are secure.

The DHP budget will be under significant pressure following major cuts to Local Housing Allowance for private sector tenants, and Local Authorities may choose to prioritise those at risk of homelessness, rather than social tenants with disabilities. Different local authorities will have different priorities, leaving a significant risk of a postcode lottery of support.

More than three-quarters (77%) of people claiming Disability Living Allowance (DLA) choose to live in the social sector as it provides the additional space and security that they need. The Government has exempted DLA recipients from the household benefit cap, ‘in recognition of the additional financial costs that can arise from disability and that disabled people will have less scope to alter their spending patterns or reduce their housing costs.’ However, the same principle has not been applied to DLA claimants who are expected to be hit by the Bedroom Tax.

2. In response to concerns over the impact of the social sector size criteria, or Bedroom Tax, an additional £30m per year in DHP was committed from 2013-14 to help tenants hit by benefit cuts for under-occupation. This cash is aimed at – but not ring-fenced for – foster carers and disabled people living in properties that have been significantly adapted for their needs. The Prime Minister has claimed that there is £50m available to help people hit by the Bedroom Tax but the additional £20m comes from baseline DHP funding, which must cover a wide range of claimants struggling to pay their rent and is not specifically for those affected by the Bedroom Tax.

3. National Housing Federation calculation based on: 229,803 disabled people in UK on DLA losing an average of £728 per year in housing benefit will amount to approximately £167m. The £30m extra DHP funding is therefore roughly a fifth of the total Housing Benefit taken from that group.

4. Page 9, DWP impact assessment (£14 x 52 weeks = £728 per year).