Landlords are chasing almost £6,000 a month in unpaid rent from hundreds of Hyndburn tenants hit by the new ‘bedroom tax’.
Council figures show that, since controversial changes to housing benefit were introduced in April, one in four tenants hit by the tax has fallen into arrears.
The changes mean that many social landlord tenants with spare rooms will get less housing benefit and are now having to meet the shortfall themselves.
Labour council chiefs have labelled the tax “devastating”.
Under the bedroom tax, tenants have their benefit cut by at least £624 a year for unoccupied rooms, while a ‘benefits cap’ of £26,000 was introduced in Hyndburn earlier this week.
Bosses at social housing landlord Hyndburn Homes said huge numbers of its tenants are racking up arrears, having failed to make the additional payments.
A spokesman said: “Up to the end of June we had 140 tenants not making the additional payments due to under occupancy, which is adding an average £5,866 to our rent arrears on a monthly basis.”
The figures are drawn from a council report on the impact of welfare reform on the borough, which also reveals that 3,592 people have been summonsed to court for non payment of council tax since the changes to council tax benefits were introduced. Of those, 3,098 were issued with liability orders by the courts.
So far just 102 affected tenants have moved out of the area or into accommodation without spare rooms.
That leaves 548 families still affected by the under-occupancy rules.
The £500 a week household benefit cap – which applies a household limit to the amount of benefit recipients can now receive – was implemented across Hyndburn on Tuesday.
It is estimated to affect at least 36 families who will have money deducted from their housing benefit awards.
Deputy council leader Claire Pritchard said the bedroom tax was “absolutely senseless”.
She said: “It’s just catastrophic for housing association business plans.
“The amount it’s going to cost to get the rent arrears will have a devastating effect.
“They will have to evict someone eventually and it will drive people out into privately rented accommodation.
“We will be lobbying hard for a change of policy.
“These welfare reforms have all come at once, which is unfortunate and it's had a massive impact on a lot of people.”
But Conservative group leader Peter Britcliffe said the council should make better use of the £20,000 Exceptional Hardship Fund, which has been specifically set up to help local people struggling through benefit reform. He said: “Hyndburn Council are slow at pointing out that you can apply for the hardship fund which is available for anyone finding it difficult. Nobody wants to see the poorest people hardest hit.
“As for the benefit cap, most people seem to think this is fair and quite generous because it is capped at a national average wage level and most wages in Hyndburn are below the national level.
“The fact is Hyndburn Council can’t affect this, it’s a national government decision.”
Since April, five people have met the strict criteria to be handed payments from the exceptional hardship fund.