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Under Occupancy Charge

Your Housing Benefit could be reduced if you live in a Council or Housing Association property and it is deemed that you have one or more spare rooms.


  • What the Under Occupancy Charge is
  • How much your Housing Benefit would be reduced by depending on how many spare rooms you have.
  • Information about how many bedrooms you would be eligible for under Housing Benefit rules.
  • Information about the Transfer Incentive Scheme and about mutual exchanges.

What is the Under Occupancy Charge? 

The Under Occupancy Charge was introduced in April 2013 and is a reduction in your Housing Benefit if you live in a Council or Housing Association property, are of working age (16 - 64) and you are deemed to have one or more spare rooms. 

The Under Occupancy Charge doesn't apply if you or your partner have reached state pension age or are in private, temporary or supported accommodation.

How much would my Housing Benefit be reduced by?

If you have one spare room then your eligible rent for Housing Benefit purposes will be reduced by 14%. 

If there are two or more spare rooms then the reduction is 25%.

How do I work out how many bedrooms I am eligible for?

The number of bedrooms allowed under Housing Benefit rules depends on your age, the age and sex of your children, whether any other adults live with you and whether you qualify for an extra room because you have special circumstances.

The basic rules are that one bedroom is allowed for each of the following:

  • A couple
  • A single adult
  • A child over the age of 16
  • 2 children of the same sex under the age of 16
  • 2 children of either sex under the age of 10

You can calculate how many rooms you are entitled to with the Local Housing Allowance Bedroom Calculator

What can I do if I am under-occupying my home? 

Colchester Borough Homes provide a Transfer Incentive Scheme which provides financial support, of up to £1,750, for tenants who are under-occupying their council home. 

The scheme gives tenants who agree to move to a smaller home a higher banding on the housing register. It also can help with the financial costs of moving.

Read more about the Transfer Incentive Scheme

If you apply and are a Housing Association tenant your application for a smaller property is given a high priority but you would not get a cash payment that a council tenant would.

If you are under-occupying your property you can also apply for a mutual exchange, this is where you agree to swap homes with another Council or Housing Association tenant. 

Read more about Mutual exchange

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