Excluded tenancies and bedroom tax

A colleague of mine has just been reading the DRHB and has come across the following exception to rent restrictions and there was mention of Excluded Tenancies where the eligible rent cannot be restricted.  (Schedule 2 of the HB regulations).  I hesitate to ask if this could be another loophole .... but could it be?  Ruth

It is not a ‘loop hole’ but will let HB anorak explain fully as there are conditions that apply…..

How long have you got?

Eligible rent for HB is determined by one of five methods and the best way to explain it is that you consider them in a particular order, ruling them out one at a time until you find one that applies.

The first option is exempt accommodation and transitionally protected pre-1996 cases. If that method applies, the full rent will be met unless it is unreasonably high

If that option doesn’t apply, the next is LHA.  LHA doesn’t apply to any of the tenancies excluded from RO referral by paras 4 to 11 of Schedule 2, and it doesn’t apply to registered HA tenancies (except the commercial portfolio of a for-profit RP).  Paras 4 to 11 list various rare or unconventional tenancies, the main ones are pre-1989 tenancies, regulated tenancies and LSVT.  The reference to LSVT would be unnecessary if all LSVT landlords were registered HAs, but there is one (just one apparently) which isn’t registered and this paragraph of Schedule 2 was with them specifically in mind.  Finally, LHA does not apply to boats, caravans and tenancies that include prepared meals.  What you are left with is LHA applying to general needs private tenants who claim HB or move any time since April 2008.

Having ruled out LHA, you next consider Local Reference Rent.  This also doesn’t apply to registered HA tenancies (except ones with unreasonably high rents or unreasonably large accommodation), nor does it apply to the miscellaneous assortment of tenancies referred to in paras 4 to 12 of Schedule 2 (including one that is not excluded from LHA: shared ownership lease from a private landlord).  LRR applies to any remaining pre-2008 private tenants who haven’t moved or broken their HB claim, and people who live in boats, caravans or have meals; also LRR (rarely) applies to registered HA tenants with unreasonably high rents or unreasonably large accommodation: the Council has to make that judgment at the time when the tenancy starts or when there is a new claim for HB.  This does perhaps overlap slightly withy the bedroom tax.  As Joe Halewood pointed out some time ago on his blog, you could in theory have a case where the Council decides a new HA claim should be referred to the RO as unreasonably large; the RO provides an LRR for notional smaller accommodation; and, because the RO is looking at the private sector when the LRR is set, it might not actually be restricted at all. That’s a risky game, and the threshold requirement is that the accommodation is larger than the claimant reasonably needs - that is not necessarily the case in all claims affected by the bedroom tax because people have a host of perfectly good reasons for needing more bedrooms than the BT size criteria allow.  But it is nevertheless interesting to note that an RO referral would mean the LRR applies instead of the bedroom tax. 

Next option is the bedroom tax and it too does not apply to any of the tenancies refefred to in paras 4 to 11 of Schedule 2, except where the landlord is a registered HA.  Nor does it applied to shared ownership tenancies. This means that the majority of general needs social tenancies (Council or HA) fall under this option.

Finally, there is Reg 12B: full rent less ineligible service charges.  Any remaining Schedule 2 cases not filtered out at the above four stages are dealt with under this option.  That includes the one solitary non-registered LSVT which came to light a couple of weeks ago and is now being sorted out the Council concerned.

So my feeling is we have probably milked Schedule 2 dry now. 

Thanks, HB Anorak, that is really clear and very helpful to us.  We deal almost exclusively with tenants of Registered Social Landlords, so it looks as if Schedule 2 will not be of use to us in relation to the bedroom tax.  But it is useful to know about in case we do come across a private tenant in these circumstances.