Bedroom tax Loophold – Short term fix?

The Bedroom Tax “loophole” has been circulating following a tribunal judgement indicating the same was made published online. (More detail on our Bedroom tax page here).

Since this time DWP have confirmed that this exemption (Namely for households who have a Housing Benefit cliam pre-1996 without any breaks) does exist. Joy all around!

However DWP have also stated in the same bulletin:

1… The Department will however be taking steps to remedy this shortly.

10. You should also record details of affected cases so that once the legislation is amended they can be reassessed to reapply the underoccupancy reduction.

This gives an indication that the loophole will soon be “plugged”. However that is not the main problem that may occur. The circular asks in the interim for LA to identify people effected. Ryszard Filipiak of Cherwell District council comments:

Well having got into the office and checked, my benefit entitlement system has records back to 1999 and my document management system goes back to December 1996. So from my records I’m not able to identify whether anybody has been in receipt of HB continuously at the same address since before 1996. I’ve now contacted my Registered Providers to find out how far back their records go.

In the absence of any evidence I’m not reviewing any decisions. If I underpay somebody DWP won’t mind. If I give somebody HB to which they were not entitled DWP will mind. With one eye on my subsidy claim the former is preferable to the latter.

A few other points:
1) Even if this loophole had been identified when the legislation was published last year it would not have made any difference. I would still not have been able to identify who came within the scope of the loophole.
2) Data Protection principles means that we shouldn’t be holding data ad infinitum on the vague possibility that an unforseeable event means that the data is required. I’m confident that I can refute any argument that decisions by my predecessors not to hold on to that data constituted maladaministration.
3) DWP pushed through the latest change to the Persons From Abroad legislation ahead of Chrismas very quickly. That was a more contentious change affecting more people. I would expect an amendment regulation removing this loophole to go through with little fuss in the next few weeks.

So Identifying people seems to be a big issue and proving if you have been getting it form pre-1996 unless your a semi-paperwork hoarder would be very difficult. Well challenged further he adds:

Only one expletive – I must try harder.

LA’s are reimbursed via subsidy for most of the HB that they pay out. The subsidy claim is audited by auditors acting on behalf of DWP. If they find an error which means that somebody has been underpaid they will bring it to the LA’s attention but they won’t make an issue of it. Conversely if they find a payment that shouldn’t have been made they do make a big issue of it and they reduce the subsidy claim – at a cost to the authority. In these days of budget cuts I have to minimise the risk to the subsidy claim.

Equally whilst at one level DWP publish extrapolated data about the amount of state benefits that may have been underpaid, at another level any underpayments help with achieving the government’s budget cuts.

“Date of claim field”. Yes there is one in the system. Back then we had benefit periods and claimants reapplied annually. So the date of claim is for the earliest benefit period held in the system, not the date of the very first claim.

“failure to keep adequate records” How do you define “adequate”. Surely any question whether there was a failure would have to look at the context and known factors at the time that that decision was taken. Using hindsight to retrospectively take into consideration an event that could not have been foreseen many years before is not reasonable.

“If a claimant says that they were in receipt that is evidence” Agreed it may be. However, that is different from reviewing every claim unprompted by the claimant. Unprompted I can only come to the conclusion, based on the evidence that I hold at this time, that no claimants in my area benefit from this loophole. If a claimant does contact the authority to say that they fall within the scope of the loophole then I would consider any evidence they are able to provide including their verbal or written statements. Then it would be a case of judging the plausibility of those statements. If on the balance of probabilities the evidence suggests that they do fall within the loophold and I’m confident that I could persuade the auditor of that then I would apply the exemption. Otherwise they can always go to tribunal and seek to persuade the judge.

Joe Halewood who broke the story estimated 10,000 people will fall under the scope of the loophole. However the interpretations (narrowly down by DWP) ignores DV victims, Decanted tenants etc. Joe goes further on the matter here.

The problems that have now risen are:

• adequate records held by LA;
• narrow interpretation;
• finding the people effected (!)
• compensating the people that were effected and had to move / or found intentionally homeless etc
• how DWP plan to “fix” this loophole

We predict there will be a number of UTT in the pipeline and some possible LGO intervention. However to kickstart your appeal check out this template letter by “Your Benefits are changing” Charity.