The U.K. "Bedroom Tax" which is slated to come into effect from April 2013 might cost the local and council housing association tenants a fortune which will force them to pay more in taxes and bills.
The "Bedroom Tax" or "Under occupation penalty" is a part of the Social Welfare Reform Act of 2012, which calls for benefit reduction to those who own a spare bedroom in the community housing sector of U.K. The reform states that 14 percent of the housing benefits will be cut for tenants who have one extra room and 25 percent for those having two or more additional bedrooms.
However, some exceptions have been made by the government. Find out the complete list of exceptions here.
The "Bedroom Tax" has been a highly mercurial topic in the country. The impact of the reform could affect more than 600,000 people. Thousands of pensioners could also be affected by the scheme.
"Ministers promised to protect pensioners from the bedroom tax, but thousands are set to lose out. David Cameron had better get a grip fast, before this scheme descends into total chaos," Liam Byrne, Shadow Cabinet's (opposition) Works and Pensions Secretary, said to Daily mail.
Byrne also said that once the people are pushed into more expensive rentals, they would end up paying higher bills. He called the reform "chaotic" and asserted that it would cost more than it saved, reports Mirror.
However, Iain Duncan Smith, Secretary of State for Work and Pensions, assured that pensioners would not be affected by the new reform.
"The reality is that they are looking at universal credit further down the road. It is not our intention that pensioners in any way will suffer. This is not about punishing people. This is about trying to reallocate the housing. It is about getting the balance right," Smith said on the Andrew Marr Show.
The tax reforms have been heavily criticized by the public as well. Authorities at the British Academy of Childhood Disability (BACD) have called the bedroom tax "astounding". They assert that the reform would penalize disabled children and their families.
In the wake of the reform, fear of a ferocious protest looms on the government. Some low intensity marches have already kicked off in some areas.
For now, the country waits with bated breath as Smith has been forced to review the "Bedroom Tax" policy following constant charges from housing associations and charities.