Bedroom Tax (Spare Room Subsidy)
The Bedroom Tax — formally called the Removal of the Spare Room Subsidy — is a reduction in Housing Benefit or the housing element of Universal Credit applied to social housing tenants who are deemed to have one or more spare bedrooms. The reduction is 14% for one spare bedroom and 25% for two or more. Certain groups, including those with a severe disability who need an overnight carer, are exempt.
The Bedroom Tax applies only to working-age social housing tenants in England, Scotland, and Wales. It reduces Housing Benefit or the Universal Credit housing element by 14% for one spare bedroom and 25% for two or more. Exempt groups include tenants who are severely disabled and need a non-resident overnight carer, foster carers (for up to 52 weeks between placements), and those whose child is away serving in the armed forces. Couples who cannot share a bedroom for disability reasons may be allocated an extra room without penalty since a 2016 Supreme Court ruling. Councils can award Discretionary Housing Payments to cover shortfalls. Tenants in Northern Ireland are not affected as the policy was not implemented there. Tenants can dispute a bedroom-tax decision through Mandatory Reconsideration and then an independent tribunal.