Universal Credit claimants are being warned their benefit could be cut by 25% thanks to the Bedroom Tax.
People who live in council or housing association properties could find their benefit reduced if they have more rooms than they need - even of they have a lodger in one of them.
Bedroom tax was introduced in 2012 to reduce housing payments to those with spare bedrooms.
And it applies to Universal Credit, which has replaced six existing social security payments including the old housing benefit - reports Birmingham Live.
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Shelter suggests ways around the tax could be to ask friends or family members to move in, take in a lodger or consider downsizing.
But Citizens Advice say that even if someone on Universal Credit rents out a spare room to a lodger, they'll still get their benefit reduced by bedroom tax.
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However the income from the lodger won't be taken into account by the Department for Work and Pensions, so you could still be better off.
People are still confused over Universal Credit and rent payments , because some people don't know it includes cash to pay their housing costs, as in the past housing benefit was often paid directly to landlords.
A report revealed that more than half (54 per cent) of all council tenants who started claiming Universal Credit are at least a month behind on their rent, including a third who are at least two months in arrears.
Here are the rules.
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Renting from Council or Housing Association
The Department for Work and Pensions says that if renting from a council or housing association, people on Universal Credit get a rent allowance built into their benefit payment.
They might also be eligible for a reduction in council tax.
But payments will usually be reduced if you live with someone aged 21 or older who is not your partner.
There are a number of exceptions, including if you are getting attendance allowance, or if the other person is getting pension credit, attendance allowance, carer's allowance or is a sub-tenant or lodger.
Bedroom tax on Universal Credit means your payment will be reduced:
- by 14 per cent if you have 1 spare bedroom
- by 25 per cent if you have 2 or more spare bedrooms
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Renting from Private Sector
The DWP confirmed that if renting from a private landlord, people on Universal Credit also get a rent allowance built into their benefit.
You may be entitled to Discretionary Housing Payments if your Universal Credit is not enough to cover your rent. And you could also get a reduction in your Council Tax. In both cases, contact the local council to see if you qualify.
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But note that there are conditions on the housing element of Universal Credit.
The DWP says that if renting from a private landlord but not living with a partner, the most you can receive is equivalent to the rent for a single room in a shared house in your area. This is called the Local Housing Allowance shared accommodation rate, or SAR.
It's based on your postcode or local authority.
To find the SAR in your area, use the Local Housing Allowance tool .
If your home has more than one bedroom, there's a maximum housing allowance you can get in your Universal Credit, based on your location, income, circumstances and the size of your household. Use the bedroom calculator here
What if you get into rent arrears?
If you’re behind on your rent, you could ask to have your housing payment sent directly to your landlord.
This is called an alternative payment arrangement (APA). It then means your Universal Credit won't confusingly include what you need to pay the rent.
Landlords can also ask for this to be done.
