Monday, 22 September 2014

Freud issues bedroom tax reclassification warning

Lord David Freud has threatened to withdraw or restrict housing benefit subsidy to councils which ‘inappropriately’ reclassify properties for bedroom tax purposes.

The welfare reform minister, in a letter to council chief executives today, said there have been cases of councils redesignating properties without reducing their rent to reflect a loss of a bedroom. Lord Freud said he expects ‘the designation of a property to be consistent for both housing benefit and rent purposes’.

The letter said: ‘Blanket redesignations without a clear and justifiable reason and without reductions in rent, are inappropriate and do not fall within the spirit of the policy.

‘If it is shown properties are being redesignated inappropriately this will be viewed very seriously,’ the letter said.

Lord Freud said that where the Department for Work and Pensions suspects properties are being redesignated inappropriately, it will commission an independent audit to ‘ascertain whether correct and appropriate procedures have been followed.’ He said redesignating properties without reducing the rent would lead to incorrect housing benefit subsidy claims being submitted to the DWP.

The letter goes on to warn: ‘Where it is found that a local authority has redesignated properties without reasonable grounds and without reducing rents, my department would consider either restricting or not paying their housing benefit subsidy.’

The letter said the DWP has no objections to re-desigations where there are good reasons, such as where a property has been adapted to cater for a disabled person’s needs, but said the designation should be consistent for housing benefit and rent purposes.

Under the bedroom tax, social housing tenants of working age deemed to have spare rooms have their housing benefit cut by £14 a week on average. The policy is intended to save around £500 million a year.

The DWP has decided not to define a ‘bedroom’ for the purposes of the policy, saying instead that it is up to landlords to ‘accurately describe the property in line with the rent charged’. This has left open the possibility of landlords reclassifying properties as having fewer bedrooms to enable tenants to avoid the penalty.

Readers' comments (37)

  • Melvin Bone


    You did not need a crystal ball to see this one coming...

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  • I feel like issuing a warning to MPs and Lords who address each other as 'honourable'.

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  • Iron Fist

    No crystal ball needed either for his resignation within 12 months hence when the whole sorry mess that is the Bedroom Tax collapses around his sorry (and non-functioning) ears.

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  • Ear Ear

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  • You don't need a crystal ball to see this being done to council after counCIL, who will all believe they've acted perfectly properly, and who will then club together to instruct counSEL.....

    Who would you fancy, well briefed and well represented local authorities or....er....the DWP, an increasingly dysfunctional department which has already demonstrated that it doesn't understand its own legislation most of the time?

    Obviously Lord Fraud has so much time on his hands he's ok about spending the greater part of it in court for the next year or two....

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  • Daedalus

    Government passes legislation - councils try to circumvent legislation - Government hits back.

    This is as obvious as night following day.

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  • About time, wondered how long it would be until someone addressed all the tricks some housing providers are trying to employ to circumnavigate the Bedroom Tax / Subsidy (depending on your persuasion).

    "good reasons, such as where a property has been adapted to cater for a disabled person’s needs” < Agree totally, those with ‘good reason’ should be exempted. However a blanket reclassification for no other reason than disagreement with Government policy I cannot agree with.

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  • Chris

    Consultative and democratic government would more likely avoid such a travesty, but at least this centralist dictatorial government in consistent.

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  • Daedalus

    If it does go to a legal battle, there is only one possible outcome, and the tax payer will foot an enormous bill.

    Which will lead to more cuts.

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  • Hessel F de Boer

    The difference between a 1 bedroom @ £ 85.36 and a 2 bedroom @ £ 91.68 = £ 6.32 (Incl. service charges) in one and the same high-rise multi-storey tower block in Salford I live in. The reduction in my housing benefit is £ 12.84 a week, so I do call it a BEDROOM TAX, as I am now paying this £ 12.84, while the difference in rent is only £ 6.32, so what does Lord David Freud wants to call the £ 6.52 a week difference ??? A London weighting Con-Dem Government under occupancy charge for the North West, he is not EVEN getting ???

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