Press release

Spare room subsidy: funding update

The government announced an additional £35m in-year funding to help claimants affected by changes to housing benefit in the social sector who need extra support.

The government today (30 July 2013) announced an additional £35m in-year funding to help claimants affected by changes to housing benefit in the social sector who need extra support.

The £35m funding consists of:

  • £10m transitional payments distributed to all councils
  • £5m discretionary housing payment funding for the least densely populated areas in the country
  • a new £20m discretionary housing payment fund

This is in addition to existing discretionary housing payment funding provided to councils this year that will help support vulnerable residents as welfare reform changes are introduced.

Lord Freud Minister for Welfare Reform said:

Reform of housing benefit is essential. The removal of the spare room subsidy means proper support for the household remains, but the taxpayer does not pay for people’s extra bedrooms.

We are strengthening the support already in place as a part of our commitment to closely monitor this reform. The new funding will help councils offer greater help to vulnerable tenants and recognises special circumstances of claimants living in isolated communities in rural areas.

£10m transitional payments will provide flexible funding for local authorities. It will be distributed to councils based on working age social sector caseload, rent levels and regional levels of under-occupation.

£20m additional funding will be available for councils, if they can demonstrate that they are managing their discretionary housing payment allocation in a robust, fair and appropriate manner.

£5m funding to rural areas will be provided to the 21 most sparsely populated areas in the country. Additional guidance for local authorities will be developed to help direct support to claimants living in isolated rural communities.

The changes to spare room subsidy were introduced on 1 April 2013. The reform means working-age tenants in the social sector will receive Housing Benefit for the number of bedrooms their household needs, bringing the rules in line with the private sector.

More information

Read the spare room subsidy fact sheet for more information about the removal of the subsidy, exemptions and other support.

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