A loophole has been found in the government’s under-occupancy policy which could see some actually profit from the tax.
Thousands have been wrongly identified as liable for the bedroom tax due as a result of a Department of Work and Pensions error. Housing experts say that around 40,000 people could be affected by this new mistake; however the DWP believe only a “small number” of tenants are affected.
The people affected could be eligible for refunds worth an average of at least £640 per claimant and millions in aggregate, reports the Guardian.
The error affects working age tenants who have occupied the same home continuously since 1996. The oversight by the DWP when drafting the legislation means that the housing benefit regulations dating from 1996 were not updated with the coalition legislated for the bedroom tax.
Chris Bryant MP, Labour’s shadow minister for welfare reform, said: “This is the latest example of the chaos and confusion within the Department of Work and Pensions under Iain Duncan Smith. Rather than closing loopholes in the policy, the government should scrap their hated bedroom tax. If they don’t, the next Labour government will.”
The DWP have said that the regulations will be ameded to close the loophole, however it is unsure when this will be done.
It is now believed that some tenants who could now be deemed exempt will have received hundreds of pounds in emergency discretionary housing payments since April. They will have their housing benefit refunded, but will not be obliged to repay the DHP money which could result in some people gaining hundreds of pounds in cash.
Theo Blackwell, the cabinet member for finance at Camden council said: “While good news for those families, it is an administrative nightmare as we have to find those continuously in receipt of housing benefit going back 18 years, when we – like most councils – have changed systems largely from a paper-based one to new IT systems. This is more evidence of how the bedroom tax policy was rushed and ill-conceived.”
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