PLANS to penalise tenants living in homes too large could cost hard-up families in Winsford up to £981 per year.

From April 2013, working age families could lose £19 a week in Housing Benefit based on the new social sector ‘size criteria’.

Under the current system, social landlords allocate families a home based on an assessment of their needs.

This may mean teenagers are given their own room and an additional bedroom may be provided to young couples planning to start a family.

Where a family is out of work Housing Benefit covers the rent.

However the Government says the overall cost of Housing Benefit needs to be controlled and tenants must choose whether to occupy appropriately sized accomodation, or pay towards homes which are larger than their needs.

Under the new size criteria a family may be penalised for under-occupying even when a bedroom in the home is in regular use, for example, separated parents will have to pay for keeping a spare room for when their children visit.

Anyone deemed to be under-occupying by one bedroom stands to lose up to 15 per cent of their housing benefit.

Those considered to have two or more spare bedrooms will lose up to 25 per cent of their benefit.

Jon Longden, lead manager for the North West branch of the National Housing Federation, said: “We have been deeply concerned about this bedroom tax for some time but these new figures show the damage will be far worse than previously thought.

“Hard-up families in Cheshire West and Chester face penalties of up to £981 a year simply because the Government have deemed their homes are suddenly too big for their needs.

“This will have disastrous implications for a huge number of people already struggling to make ends in the tough economic climate, including foster parents, grandparents, disabled people and smaller families.

“In the vast majority of cases, people will simply not be able to make up the shortfall themselves and could end up being sucked into poverty and spiralling levels of debt.”

More than 40 per cent of tenants in the social sector have lived in their homes for more than 10 years. The changes are likely to affect around 120,000 nationwide.

WINSFORD’s biggest social landlord has expressed its concern over the new housing benefit cuts.

The trust estimates more than 300 of its customers below retirement age will be affected by the ‘under-occupancy’ legislation and fears it could see an upturn in loan sharks and illegal doorstep lenders.

Steve Jennings, chief executive of the trust, said social landlords are united in calling for a re-think on changes to the Welfare Bill.

He added: “The proposal causes myself and my colleagues within the housing sector more bedrooms causes myself and my colleagues within the housing sector great concern.

“Trust customers have also joined forces with other housing associations to share their concerns.

“This has led to them lobbying for a change and presenting a petition to 10 Downing Street.”

Ken Taylor, from the trust’s tenant consultative committee, said: “As social housing customers we are deeply concerned about the impact that the changes to welfare benefit will have on the most vulnerable in our communities.

“We have put a lot of work in lobbying local MPs and housing ministers on the issue.”

The trust’s Money Matters team will now be working with customers to give advice on all benefits available to them.