In January 2014, Iain Duncan Smith, Government Secretary of State for Work and Pensions, set out plans for the future of welfare in the UK.
In his policy speech ‘Simplifying the welfare system and making sure work pays’ he said: “Our welfare reforms are about ensuring it is no longer more worthwhile to be on benefits than in work.”
But difficulties with illness, finding suitable work and trying to manage family finances mean it is far from simple for many hard-pressed families.
Breaking the rules
21-year-old Sarah from Cornwall pays her stepfather’s monthly ‘spare room subsidy’ charge in return for living in the unoccupied room he has in his four bedroom house.
“My step dad has had two heart attacks and has problems with his knees which prevents him from working and he used to get disability allowance.
“Since the new cuts they have taken that away and tried to send him back to work based on his mobility – they don’t consider the important factors such as his heart problems! On top of this the government also brought in the bedroom tax.”
As far as her local council are aware, Sarah, who does not wish her last name to be published, moved out when she turned 21 and lives independently.
He is being charged through the bedroom tax rules as the room is empty, but Sarah covers the cost because the charge would otherwise be a drain on the finances of her stepfather.
“My stepdad gets help paying his rent but still has to pay the bedroom tax on top of this, even though his money’s been cut and he can’t work as his doctor has signed him off. So I’m having to pay it for him and live there secretly.”
Part time work not enough to support family
More than 19,000 people have returned to work since the benefit cap was introduced, but for Sarah her part time job at a superstore only just helps her to fund her own lifestyle at 21 alongside her degree. With her stepfather unable to work, the pressures to help her family are constant.
According to a Joseph Rowntree Foundation report in January 2014, the number of households on inadequate incomes like Sarah’s has increased by a fifth in three years .
Donald Hirsch, co-author of the report, said:
“A whole generation of young adults are noticeably worse off as a result of the deterioration in their job prospects, a worsening of housing options and falls in real wages and benefits, making it harder for young people to be independent.”
“I think I’m always going to have to support my family”
Sarah says that if her stepdad could work or still received disability allowance, her family’s living situation would be better.
“And I would still have my own plans, but we obviously feel this is the only way we can live. It’s not fair on any of us.”
Gavin Smart, Director of Policy and Practice at the Chartered Institute of Housing agrees that people affected by the bedroom tax payment reductions can face difficult choices in making ends meet
“In some cases the amounts of money involved represent a significant part of their income.”
Sarah feels that her choices are limited.
“I don’t want to break the benefit laws, but I don’t see many other options”.
Disability allowance cuts and the bedroom tax have had a significant impact on the life of Sarah and her family.
“I don’t know what help is available to me and my family, but as far as I am aware with the cuts to disability allowance there isn’t much anyone can do.
“It’s not fair for people to be living in poverty and the Government keep charging them more money they don’t have.”
If the other housing rules have not changed, ie that one is not considered to be legally resident at the property if one is not actually ‘living at’ the property, which is usually determined by sleeping there, for more than 3 consecutive days in a row.
It is for the powers that be to prove that you are sleeping there for more than 3 consecutive days. Otherwise you simply deny this and ensure that every 4th day you are elsewhere. That’s the way to do it in this particulalr punch and judy show. It is for them to prove you guilty, and not for you to prove you are innocent. Nor do you have to prove where you are staying either.
People like Sarah effectively disappear. She’s not registered to vote and not paying council tax. This is one way the poor become disenfranchised because enfranchisement, ie the so-called right to vote is really only a right to participate in decision-making (barely anyway) for the economically active, though this is fast excluding the precariat who are a class of poor workers who will still have to ‘sign-on’ at a JobCentre in some as yet undisclosed sense when Working Tax Credit is fully merged into Unversal Credit in 2017. They will be expected to look for better paid work or more low paid work or face a Benefit Sanction. After all Universal Credit payments will also include rent ie Housing Benefit!
The Precariat, roughly the bottom 15% or so of society, comprised of the unemployed and the low paid, will be lumped together, and be forever visiting the JobCentre job or no job! This is what used to be called the Underclass.
Though we don’t exactly live in a property-owing democracy those without property and poor tend to lose the right to vote because the economic cost of voting is too much.
And we are fast moving toward an electoral system where many think there should be no representation without taxation ie a tax-paying democracy, by which is really meant an income-tax paying democracy because even the poor pay consumption taxes!
However, there is likely to be a complication around Council Tax which Sarah needs to watch. Take in a lodger officially and lose the 25% single person Council Tax discount.
If her father is living alone then he probably gets the single person discount on his council tax. If Sarah was registered as living there her father would not get this discount. It is illegal for him not to declare she is living with him. Paying the full council tax despite not declaring you would obviate such a dilemma. I think this can be done without declaring another person present. In other words pay it in full. These days with councils now having their own Council Tax Support Schemes he may very well have to pay a percentage of his Council tax. This varies across the UK and may well lead to migrations from high Council Tax areas to low Council Tax areas. I am myself now charged Council Tax which I cannot pay, unless I opt not to eat or heat! Only Pensioners are exempt!
Sarah could declare that she is living with her father so he would not have to pay the Bedroom Tax, but it seems he has 4 bedrooms and probably has 3 spare bedrooms and is hit with the maximum hit of around £25pw. He would still have to pay £25pw even if she said she was living there because he would still have 2 spare bedrooms! I guess Sarah is paying the full £25pw for him out of her income!
If she was to try and claim rent as a lodger, Sarah has the additional problem that she is a relative! Even so, especially if she is under 35 years of age, the maximim rent the Council would pay her in Housing Benefit would be around £60per week (varies across the UK) irrespective of the rent charged, because she would be treated as a private tenant. Then the rent received by her father is treated as income and his Housing Benefit would be reduced and he would have to pay the difference to his landlord.
I looked into the possibility of having a lodger and charging them very little or no rent simply because my main aim is not to pay the Bedroom Tax and not to incur additional rent costs! Unfortunately the Council were of the opinion that this would be construed as Deprivation of Income! In other words I would be investigated because I should be charging a reasonable rent! It got a mite complicated and simply wasn’t worth it.
I’ve looked into all of this as someone affected by the Bedroom Tax, and the glib response ‘get a lodger’ is really not a viable economic option for most, and then there is the the ‘stranger danger’ objection. Relatives are economically penalised but stranger’s aren’t!
My suggestion is that one finds others in a similar situation and then swap children to circumvent the ‘relative’ problem and especially the dependent problem.
In other words the ‘kids’ at age 19ish ‘technically’ move-out to a friends, and their friend ‘technically’ moves-in, (ie swap houses) and that is perfectly legitimate for charging a rent and getting rent paid as Housing Benefit because then the child is not a relative.
Of course they only technically swap homes for in reality they stay put. Again it is up the Council or Landlord to prove otherwise. Again the issue of sleeping for more than 3 days in a row arises. So if they wish to be extra careful they simply swap homes once every 4 days and then the next day return home. It should work and is one loophole exploit.
Love, Light & Laughter
Starlord