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Government closes bedroom tax loophole

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Government closes bedroom tax loophole

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Published by Jon Land for 24dash.com in Central Government and also in Housing, Local Government, Regulation

Government closes bedroom tax loophole Government closes bedroom tax loophole

An oversight that exempted some of the victims of the bedroom tax from being hit by the policy has been closed by the government.

Little known legislation brought in by the last Labour government exempted anybody who had continuously claimed housing benefit while living in the same property since 1996 from paying the tax.

Now the Department for Work and Pensions, which somehow missed the legislation when drafting the policy, has advised its staff that the loophole has been closed.

It has also put the onus on councils to sort out the mess at a local level rather than the DWP intervene directly.

Some sources estimated that between 40,000 and 60,000 social housing tenants across the country have been wrongly paying the bedroom tax since it started last April.

However, the DWP said it believed the figure to be around 5,000.

It has now said that individual local authorities are best placed to identify the number of people affected in the respective areas.

Addressing the situation of tenants who may have moved home to 'downsize' and avoid the tax when the need not have, the DWP has said that: "The regulations will be amended from 3 March 2014. This will mean that from this point the size criteria reduction will be reapplied. Therefore if a claimant has taken steps to downsize in order to meet the rent shortfall, it is likely that they took the necessary steps to avoid an ongoing under-occupation reduction. Any HB arrears should be made from 1 April 2013 to the point they moved address."

On whether claimants that have had to move as a result of being misapplied the bedroom tax will be compensated, the DWP has said that it has "overarching responsibility for the HB scheme but LAs administer the scheme on a day-to-day basis. Claimants are entitled to request compensation if HB has been paid late. This can be done via the LA complaints procedure or through the Local Government Ombudsman if the complainant remains dissatisfied when the procedure is exhausted."

The bedroom tax sees social housing tenants of working age who are deemed to be under-occupying their homes docked up to 25% of their housing benefit. It has been estimated that around 660,000 tenants have been hit by the policy.

Last year, Exeter City Council identified 31 cases where tenants should not have been paying the bedroom tax. The council has refunded those wrongly charged but has now written to them to explain that as of 3 March, they will be charged with the under-occupancy policy once again.

Cllr Rob Hannaford, Exeter's lead councillor for housing and customer access, said: "Although we were good to our word and paid out the refunds, the error has now been rectified by the DWP and the appropriate legislation laid before Parliament. If anyone in Exeter has problems with debt as a result of this and any other issues I would urge them to come and talk to one of our customer advisors."

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