Bedroom Tax 1996 loophole


It came to light in January 2014 that customers that have lived in the same property since 1 January 1996 and been on housing benefit continuously (with some exceptions – see below) should not have had the reduction made for bedroom tax due to an error when changing the housing benefit regulations.

The Government has said that this was an error and they will be looking at putting this right during March 2014.

Aspire has provided a list of customers whom this could affect to Newcastle Borough Council and it is working on them and will write to them if they are affected.

If you think this affects you and you have not heard anything soon contact the council who will investigate your eligibility.

Because this is classed as an official error it can be reported to the council at any time and should be paid back in full if the criteria shown are met.


See our Frequently Asked Questions for further information.

What is the pre 1996 bedroom tax loophole?

Aspire has been made aware of a loophole for longstanding customers that the Department for Work and Pensions confirmed on 9 January 2014. They also stated on this date that they were looking at ending this loophole in March 2014. However anyone who is affected by this can get the reduction of housing benefit for bedroom tax repaid from 1 April 2013 to the date when the regulations are changed to end the loophole.

In very basic terms, where a tenant has been in receipt of housing benefit continuously for the same address since 1 January 1996, then they are currently excluded from the bedroom tax.

Are there any other circumstances where a tenant would be excluded?

Yes. The rules allow for a gap in entitlement of up to four weeks, some successions and a change of address permitted in very limited circumstances.

These circumstances are called the ‘inherited protection’ rules and they say that the ‘exclusion’ can be passed from one housing benefit claimant to another in the circumstances below.

What if the person has died?

If the beneficiary (ie the person entitled to the protection) dies then the ‘protection’ can be passed on to: their partner, dependent child, son, daughter, parent, son-in-law, daughter-in-law, parent-in-law, step-son, step-daughter, step-parent, brother, sister, grandparent, grandchild, uncle, aunt, nephew or niece, as long as this person was living in the property on the date the beneficiary died. This exclusion will apply where, between the beneficiary and the new claimant, they have had a continuous claim for housing benefit since 1st January 1996 (gap of four weeks allowed) in respect of the same property.

What if the person has separated?

If the beneficiary (ie the person entitled to the protection) leaves the property then the ‘protection’ can be passed onto their partner as long as the partner was living in the property on the date the beneficiary left; and between them they have a continuous claim for housing benefit since 1 January 1996 (gap of four weeks allowed) in respect of the same property.

What if the person has been imprisoned?

If the beneficiary (ie the person entitled to the protection) leaves the property due to imprisonment (remand or sentence), then the ‘protection’ can be passed onto their partner as long as the partner was living in the property on the date the beneficiary left; and between them they have a continuous claim for housing benefit since 1 January 1996 (gap of four weeks allowed) in respect of the same property.