How Much is Bedroom Tax?

At Towerstone, we provide specialist property accountancy services for homeowners, landlords, and property investors. We have written this article to explain what the bedroom tax is and how it is calculated, helping you make informed decisions.

The term “bedroom tax” is widely used, but it is not the official name of the policy. Its formal name is the under-occupancy charge or removal of the spare room subsidy. It affects certain people who receive housing support and are deemed to have more bedrooms than they need.

Understanding how much the bedroom tax is, who it applies to, and how it is calculated is important, because it can significantly reduce housing support and put pressure on household budgets. Many people are unclear on the actual figures, how they are applied, and whether they have any options if they are affected.

This guide explains the bedroom tax clearly in UK terms, with current figures, real examples, and practical context.

What is the bedroom tax?

The bedroom tax is a reduction in housing support for working-age tenants who live in social housing and are considered to have one or more spare bedrooms.

It does not apply to everyone, and it does not apply to private renters. It also does not apply to people who have reached State Pension age.

The policy applies to people who receive help with housing costs through:

Housing Benefit

The housing element of Universal Credit

and who rent from:

A council

A housing association

Who does the bedroom tax apply to?

The bedroom tax applies if all of the following are true:

You are of working age

You receive Housing Benefit or Universal Credit housing support

You live in social housing

You are assessed as having more bedrooms than your household is allowed

If any of these conditions are not met, the bedroom tax does not apply.

How many bedrooms are you allowed?

The rules set out how many bedrooms a household is considered to need. In general, you are allowed one bedroom for:

Each adult couple

Any other adult aged 16 or over

Two children under 10, regardless of sex

Two children under 16 of the same sex

Any other child

There are some additional rules and exceptions, which I will cover later.

How much is the bedroom tax?

The bedroom tax is not a fixed amount in pounds. Instead, it is a percentage reduction applied to the eligible rent used to calculate your housing support.

The current rates are:

14% reduction if you are considered to have one spare bedroom

25% reduction if you are considered to have two or more spare bedrooms

These percentages are applied to the rent figure used by the benefits system, not necessarily the full rent you pay.

What does that mean in real terms?

Because the bedroom tax is a percentage, the actual amount you lose depends on your rent.

Here are some simple examples.

If your eligible rent is £100 per week:

One spare bedroom results in a £14 per week reduction

Two or more spare bedrooms result in a £25 per week reduction

If your eligible rent is £150 per week:

One spare bedroom results in a £21 per week reduction

Two or more spare bedrooms result in a £37.50 per week reduction

That shortfall must usually be paid by you, out of your other income or benefits.

Over a year, even a £14 weekly reduction adds up to more than £700.

Bedroom tax and Universal Credit

If you receive Universal Credit, the bedroom tax works in the same way, but it is applied to the housing costs element of Universal Credit rather than Housing Benefit.

The same percentage reductions apply:

14% for one spare bedroom

25% for two or more spare bedrooms

The result is that your Universal Credit payment is lower than it would otherwise be, and you must cover the difference yourself.

Who is exempt from the bedroom tax?

Several groups are not affected by the bedroom tax.

The most important exemptions include:

People who have reached State Pension age

People living in private rented accommodation

People who do not receive housing support

Some supported or adapted accommodation

If you or your partner are of pension age, and you receive Housing Benefit, the bedroom tax does not apply.

Disabled people and the bedroom tax

Disability is one of the most complex and controversial areas of the bedroom tax.

Some disabled people are exempt, but not all.

You may be allowed an extra bedroom if:

You or your partner need a non-resident overnight carer

A disabled child cannot reasonably share a bedroom

You receive certain disability benefits and meet specific criteria

These exemptions are not automatic. They usually require evidence and correct reporting to your local council or the Department for Work and Pensions.

Many people who should qualify for an exemption are incorrectly assessed, so it is important to challenge decisions if they do not reflect your circumstances.

Overnight carers

If you or your partner require overnight care, and the carer does not live with you, you may be entitled to an additional bedroom.

To qualify:

You must need regular overnight care

The carer must not live in the property

The need must be supported by evidence

If accepted, the bedroom used by the carer is not treated as a spare room.

Children and shared care arrangements

Shared custody arrangements can be particularly difficult under the bedroom tax rules.

In many cases:

Children are only counted as living where they normally reside

Extra bedrooms for visiting children are often treated as spare

This means parents who share care but do not receive Child Benefit may still be penalised.

Some councils take a more flexible approach, but the general rule is strict.

How the bedroom tax is applied in practice

The bedroom tax is applied automatically once your household size and bedroom entitlement are assessed.

You will usually be notified:

In your Housing Benefit decision letter

In your Universal Credit statement

The reduction is built into the calculation, rather than billed separately.

This can make it harder to see exactly how much you are losing, so it is worth checking the calculation carefully.

Can the bedroom tax be backdated?

The bedroom tax usually applies from the point your circumstances are assessed or change.

It can sometimes be applied retrospectively if information was missing or incorrect, but councils are expected to act reasonably.

If you believe it has been applied incorrectly or backdated unfairly, you can request a review.

What if you cannot afford the shortfall?

Many people affected by the bedroom tax struggle to cover the reduction.

Options may include:

Applying for a Discretionary Housing Payment

Asking to downsize to a smaller property

Increasing income where possible

Challenging the decision if you believe it is wrong

Discretionary Housing Payments

Discretionary Housing Payments, often called DHPs, are additional payments that councils can award to help people struggling with housing costs.

They are:

Not automatic

Time limited

Based on individual circumstances

Many councils prioritise DHPs for disabled people, carers, and those who cannot reasonably move.

However, DHPs are not a long term solution, and they do not remove the bedroom tax permanently.

Can you avoid the bedroom tax by moving?

Downsizing to a smaller property can remove the bedroom tax, but this is not always realistic.

Barriers include:

Shortage of smaller social housing properties

Location and support needs

Family and caring responsibilities

Courts have recognised that moving is not always possible, but the policy still applies unless an exemption is granted.

Why the bedroom tax exists

The government introduced the bedroom tax to:

Reduce housing benefit costs

Encourage efficient use of social housing

Free up larger homes for families

Critics argue that it unfairly penalises vulnerable people and does not reflect housing availability. Supporters argue it brings social housing rules closer to the private rented sector.

Regardless of opinion, the policy remains in force.

Common misunderstandings I see

These misunderstandings come up frequently:

Thinking the bedroom tax is a fixed weekly amount

Assuming it applies to private renters

Believing all disabled people are exempt

Not realising pensioners are excluded

Not checking entitlement calculations

Many people are affected unnecessarily because errors go unchallenged.

How to check how much bedroom tax you pay

To check your bedroom tax:

Look at your Housing Benefit award letter or Universal Credit statement

Identify your eligible rent

Apply the 14% or 25% reduction

Compare this with the amount paid

If the figures do not make sense, you can ask for a full breakdown.

Challenging a bedroom tax decision

If you believe the bedroom tax has been applied incorrectly, you can:

Request a mandatory reconsideration

Provide additional evidence

Appeal to an independent tribunal if necessary

Challenging decisions can be stressful, but many appeals succeed where the rules have been misapplied.

A simple summary

In simple terms:

The bedroom tax is a 14% or 25% reduction in housing support

It applies to working-age people in social housing

It depends on how many bedrooms you are assessed as needing

The actual cost depends on your rent

Exemptions and support may be available

Final thoughts

The bedroom tax is not a flat fee, and there is no single answer to “how much is it”. For some households it may be £10 per week, for others £40 or more. Over time, those amounts add up and can create real financial pressure.

Understanding how the reduction is calculated, whether you qualify for exemptions, and what support is available is essential if you are affected. Many people accept the reduction without realising it may be wrong or challengeable.

If the bedroom tax is affecting you, it is always worth checking your assessment carefully and seeking advice rather than assuming nothing can be done.

If you would like to explore related property guidance, you may find how much do estate agents charge to sell a house and how much does it cost to build a house useful. For broader property guidance, visit our property hub.