Residents of the west London tower block who are given bigger homes could be subject to the removal of the spare room subsidy, branded a bedroom tax by critics, the Department of Work and Pensions (DWP) said in an urgent bulletin.
Although the bedroom tax does not apply to people in temporary accommodation, it may to victims housed in permanent accommodation.
“We would advise that in these circumstances any requests for a DHP (discretionary housing payment) to meet rent shortfalls should be treated as a priority,” the DWP said.
It is understood that the Government has identified DHPs as the quickest way to help those affected, but there is no guarantee that those moved into bigger housing will receive them for the duration of their tenancy.
Victims may also be forced to apply to their local authority for a payment, but councils are being encouraged to take into account whether they are placing victims in bigger homes and should be able to allocate them DHPs in those circumstances.
Giles Peaker, a solicitor specialising in housing law, told Inside Housing, which first uncovered the DWP bulletin, that the Government will eventually have to find a longer-term solution.
“In the first place people should not be being put into properties where they would be subject to the bedroom tax,” he said.
“Any re-housing ought to be suitable, which would include affordability and the number of rooms.
“They would have a clear case for DHPs... but it’s not a permanent solution.”
The DWP has placed three specialist welfare advisers at the Westway Centre, near the tower in north Kensington, to help victims and to try and ensure they do not unnecessarily lose any payments in the wake of the disaster.
A DWP spokeswoman said: “We have already relaxed benefit rules for anyone affected by the Grenfell Tower fire and our staff are handling people’s claims with sensitivity, understanding and flexibility.
“As part of this, our recent guidance to local authorities is that they should treat these residents as a priority for extra payments to help with their rent if they are rehoused in a larger property.”