What is the under-occupation charge?
The under-occupation charge (also known as bedroom tax or spare room subsidy) applies to working age tenants and means that you will receive less in Housing Benefit or Housing Costs element in Universal Credit if you are deemed to have more bedrooms than the rules say you need.
If your benefits do not cover your rent charge you will be responsible for paying the shortfall (this is the difference between how much you get in Housing Benefit or Housing Costs in Universal Credit and how much your actual rent charge is).
What is working age?
Working age means anyone between the age of 16 and pension age. If you are a couple and just one of you has reached pension age you may also be affected by the under-occupation charge. You are not affected if you have both reached pension age.
How many bedrooms are allowed?
One bedroom is allowed for:
- An adult couple
- any other adult aged 16 or
- two children under 10 regardless of their sex
- two children under 16 of the same sex
- any other child under 16 (where, for example, there are three children in the household)
When is an additional bedroom allowed?
An additional bedroom is allowed for:
- a non-resident carer or carers who regularly provide(s) overnight care for a disabled adult or child who is getting a qualifying disability benefit. Only one additional bedroom is allowed, even if more than one carer is needed.
- Foster children - you get benefits for an extra bedroom if you have a foster child placed with you. This can continue for up to 12 months between placements.
- Disabled person who cannot share a room –an adult who cannot share with their partner, or a child who cannot share with another child. The disabled person must be getting a qualifying benefit.
More information on when you may be allowed an additional bedroom can be found on the Shelter website.
How much benefit do you lose?
The under-occupation charge reduces the amount you receive in benefits for you rent by:
- 14% for 1 spare bedroom
- 25% for 2 or more spare bedrooms
Example of the under-occupation charge for Universal Credit claimants
- Your rent is £450 a month.
- You get universal credit (UC). This has a housing element to help with rent.
- The most you can get as your UC housing element is:
- £387 if you have 1 spare room
- £337.50 if you have 2 spare rooms
- You would be responsible for paying the shortfall to the Council for your rent.
Example of the under-occupation charge for Housing Benefit claimants
- Your rent is £100 a week.
- The most you can get in Housing Benefit is:
- £86 if you have 1 spare room
- £75 if you have 2 spare rooms
- You would be responsible for paying the shortfall to the Council for your rent.
What if I cannot afford to pay my rent?
You may want to consider the following if you are struggling to pay the under-occupation charge:
- Downsize: moving to a smaller property with fewer bedrooms could reduce or eliminate the charge.
- Mutual exchange: you can register for a mutual exchange to a smaller property by registering on HomeSwapper.
You could get help with moving to a smaller property from the Council’s Tenants Assistance Scheme.
- Apply for a Discretionary Housing Payment (DHP): if you would find it difficult to meet the shortfall in your rent (the difference between how much you get in benefit and how much your rent actually costs) then you may be entitled to some help.
What happens if someone I live with dies?
Universal Credit does not usually go down straight away if someone you live with dies.
For up to three months your benefit is worked out as if they had not died. This is sometimes called 'bereavement run on'. You should not be affected by the under-occupation charge during this time.
What if I have a child away on operations in the Armed Forces?
If your child or stepchild is away on operations, you can include them indefinitely if they:
- lived with you before they went away, or;
- intend to return home when not on operations.
What can I do if I am struggling financially?
Council tenants struggling to pay their rent can contact the Rents Team on 0121 737 5148, Monday to Thursday 9am – 5.30pm and 9am to 5pm on a Friday for advice and support.
Contacting that team as soon as possible will enable them to provide you with the appropriate support and advice to prevent you from falling into arrears and to sustain your tenancy.
Where can I get further support and advice about the under-occupation charge?
You can contact the council’s Welfare Rights Team. They give free independent and impartial advice and support on all welfare benefits including the under-occupation charge.