Fife Council has been branded “morally bankrupt” after clawing back ‘bedroom tax’ refunds from tenants.
Campaigner Maureen Closs from Kirkcaldy, of the Fife Anti-Bedroom Tax Campaign, accused the local authority of robbing the poor after it emerged money promised to reimburse those who had already paid the spare room subsidy levy was instead being used to pay off their council tax arrears and other debts.
Ms Closs claimed the policy was wrong and called on the council to make changes immediately.
The UK Government removed what it calls the spare room subsidy commonly known as the bedroom tax in April 2013. It means anyone in receipt of housing benefit deemed to have a spare bedroom has their benefit cut by 14%.
Following an urgent meeting last month, Fife Council agreed to offset the full impact after a cap on discretionary housing payments was lifted.
However, it has emerged the council has instead been offsetting the refunds against any debts owed to them.
The local authority is using refunds to pay tenants’ council tax for the whole of 2014/15 in advance, even though most people pay by a monthly standing order.
The money is also being used to pay off arrears where a repayment plan is in place and has not been defaulted on.
Ms Closs said: “We are all agreed that this policy is wrong and yet Fife Council is cashing in on it by clawing the refunds back.
“It is known that people who have paid the bedroom tax have had to have done without something else to pay it.
“I personally consider that on this issue, Fife Council have shown themselves to be morally bankrupt and must make changes immediately.”
She added: “It’s an evil tax yet they are allowing their officers to claw back refunds so the council is benefiting from people having paid it because they were frightened not to.”
Councillor David Ross, Fife Council’s leader, said he had some sympathy with Ms Closs’s points.
After speaking to her, he had instructed the council’s director of finance to immediately look into the possibility of changing the policy in relation to the current financial year only a pledge welcomed in part by the campaigner.
“I believe the practice of offsetting repayments against other outstanding debts to the council is in line with long-standing practice but this was never designed to deal with the problems caused by the bedroom tax,” said Mr Ross.
“I hope we can get this situation resolved quickly but this is a complex issue.”