Thousands of social housing tenants could have been incorrectly affected by the ‘bedroom tax’ thanks to a policy error.
An unforeseen loophole in the Government’s spare room subsidy means tenants who have continuously claimed housing benefit and lived at the same address since at least 1 January 1996 were in fact exempt from the policy and could now have funds returned.
An ‘urgent bulletin’ issued by the Department of Work and Pensions (DWP) revealed tenants meeting this criteria could now be owed housing benefit lost since April 2013.
Councils now face returning housing benefit collected from those ineligible for the policy until the loophole is closed.
Welfare reforms launched last year cut levels of housing benefit for social housing tenants living in residences thought to be larger than their need.
While housing experts have claimed as many as 40,000 people could have been affected by the mistake, a DWP spokesperson told LocalGov they expected ‘less than 5,000’ would be affected by this ‘minor issue with regulations’.
‘We are looking at this issue carefully and working with local authorities, and we will take any necessary action in due course,’ the DWP spokesperson said. ‘We expect very few people to be affected.’
Rounding on the Government, Labour’s shadow minister for welfare reform, Chris Bryant MP, said: ‘This is the latest example of the chaos and confusion within the DWP 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.’
