Housing benefit and welfare reform
Welfare is reserved to the UK Government, which is carrying out a major programme of reform to the welfare system. These measures affect policy areas which are devolved to Scotland such as health, social care and housing.
Changes include cuts to both Housing Benefit in the social rented sector, and Local Housing Allowance in the private rented sector – as well as the introduction of direct payments of housing costs to tenants in the social sector through Universal Credit.
We have produced a factsheet listing the key welfare reforms affecting housing.
Help and advice
If you are concerned about how you are likely to be affected by welfare reforms, visit mygov.scot to find out where you can get free and independent help and advice about benefits.
Information for housing practitioners
The bedroom tax
From April 2013, the UK Government limited Housing Benefit for working-age council or housing association tenants if they are considered to be under-occupying their homes. This is is widely known as the 'bedroom tax'. It means the amount of rent tenants can claim Housing Benefit for is reduced by:
- 14% for one additional bedroom
- 25% for two or more additional bedrooms
Further information about the bedroom tax, including exceptions to it, is available from gov.uk.
Housing Benefit and Local Housing Allowance are being replaced by the housing costs element of Universal Credit. Universal Credit is currently being rolled out across the UK in phases.
The new system replaces six existing benefits and is based on a single monthly payment, direct to the claimant.
Our response – Discretionary Housing Payments
We are doing what we can within the limits of our powers to protect those affected by welfare reform, especially vulnerable people. We are still opposed to the bedroom tax.
Between 2013 and 2016 we provided councils with £90 million to offset the negative impact of the bedroom tax in Scotland through Discretionary Housing Payments (DHPs).
DHPs help people with rent problems who receive a benefit for their housing costs. Information on other actions to reduce the negative impact of welfare reform is also available.
Further powers (via the Scotland Bill 2015-2016)
Power to vary the housing cost element of Universal Credit (including varying the bedroom tax) is set to be devolved through the Scotland Bill. Scottish Ministers are committed to using these powers to abolish the bedroom tax as soon as possible.