Bedroom Tax and Council Tax Arrears: What You Need to Know

The bedroom tax, officially known as the Spare Room Subsidy or removal of the spare room subsidy, was introduced in April 2013 as part of wider welfare reforms. It reduces the amount of housing benefit you receive if you have a spare bedroom in your council or housing association home. Your housing benefit is cut by 14% for one extra bedroom, and 25% for two or more spare bedrooms.

This article was originally published in a previous year and has been fully updated for 2026 to reflect current legislation, figures, and guidance.

More than a decade on, the policy continues to affect hundreds of thousands of tenants across England and Wales. Many councils have reported that tenants hit by the bedroom tax are more likely to fall into rent arrears than those unaffected. For families already managing tight budgets, even a small cut to housing benefit can make the difference between keeping up with payments and falling behind.

The knock-on effect on council tax is significant. When your housing benefit is reduced, you have less money available for other household bills, including council tax. If you are already receiving Council Tax Reduction (formerly Council Tax Benefit), the bedroom tax does not directly affect that, but the financial pressure of paying more towards rent often means council tax payments get missed.

What can you do if the bedroom tax has left you in arrears?

If your housing benefit has been cut and you are struggling to keep up with rent or council tax payments, there are several steps worth considering:

• Apply for a Discretionary Housing Payment (DHP) from your local council. These are designed to help tenants who face a shortfall in their housing benefit.
• Check whether you qualify for Council Tax Reduction. Many councils offer additional support for people on low incomes.
• Contact your landlord or council as early as possible. Explaining your situation before debts build up can lead to more flexible repayment arrangements.
• Look into whether you can take in a lodger or use the spare room in a way that removes the deduction.
• Seek advice on whether a transfer or mutual exchange to a smaller property might be practical for your circumstances.

The most important thing is to act quickly. Ignoring arrears will only make the situation worse, and councils have enforcement powers that can escalate the costs you face.

At Council Tax Advisors, we help people who have fallen into council tax arrears, whether that is because of the bedroom tax, changes to benefits, or other financial difficulties. Our advisors can contact your council on your behalf to negotiate a manageable repayment plan and help prevent further enforcement action. If you are struggling, get in touch and let us help you find a way forward.