A freelance benefits specialist in East London discovered a loophole in Housing Benefit legislation that has led to thousands of people having their “bedroom tax” revoked.

Following the discovery by Peter Baker in East London, the government confirmed the accuracy of his findings last week.

The anomaly has caused consternation in the government, as estimates reveal the cost of reinstating wrongly-deducted underoccupancy charges could cost as much as £26 million to possibly as many as 40,000 claimants.

The House of Lords raised this in debate and Lord David Freud announced The Department for Work and Pensions will close the bedroom tax loophole in March.{jcomments on}

The minister for welfare reform, responding to an urgent question in the House of Lords on Tuesday (14th January), said: ‘The housing benefit regulations will be amended in March 2014 to ensure that all working-age social sector tenants who underoccupy their homes are subject to a reduction in their eligible rent, regardless of the length of their tenancy, unless they fall within one of the limited exceptions.’

In the meantime Shelter, the housing and homelessness charity, has published research that finds one in five people borrow money to pay their rent or mortgage, with 2% of people taking out high-interest payday loans in order to keep a roof over their heads.

Read the full articles on the discovery of the loophole here and Inside Housing’s report, as well as the full debate in the House of Lords on Hansard.


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