The leader of the Party of Wales has warned of the “catastrophic” impact the bedroom tax will have on the 40,000 people in Wales affected by the changes to housing benefit.
According to calculations made by the Welsh Local Government Association, this will see £26.7 million of income being sucked out of the Welsh economy in the next financial year.
Leanne Wood AM, the Plaid Cymru Leader, said the changes will have a huge impact on the most vulnerable in society and a knock-on effect on the local businesses they use.
The Westminster Coalition Government’s changes to occupancy rules regarding Housing Benefit will see payments reduced by 14% if there's one extra bedroom and 25% if the person has two or more extra bedrooms.
Under the scheme, one bedroom is allowed for each adult couple, two children of the same sex under 16, two children aged under 10 and any other child.
Ms Wood said: “As things stand, there are a lot of families in Wales struggling to keep their heads above water with the cost of living and daily essentials rising year-on-year while incomes and social security payments remain static or increase very little.
“We have seen phenomenal growth in the demand for food banks in Wales which provide emergency food packages to those who cannot afford to feed themselves. This is a significant barometer of how tough life is for a significant proportion of the population.
“The hunger crisis in Wales will only get significantly worse following the benefit changes on the horizon this April. The bedroom tax, affecting 40,000 people in Wales and taking an estimated £26 million from their pockets will be one of the most devastating changes to social security payments.
“We also expect to see an increase in homelessness, more people in arrears and further economic decline in those areas where there is a high proportion of people reliant on social security.
“Around a fifth of all Welsh households will have seen significant cuts in their income due to direct and deliberate actions of a Westminster government that has no mandate in Wales.
“Most of the people affected by the bedroom tax are in employment. It will not just affect those in large houses. Foster parents who keep a spare bedroom for children will be regarded as ‘under-occupying’.
“Parents of children in university who keep their rooms for them will be regarded as ‘under-occupying.’
“The bedroom tax will have a catastrophic effect on household budgets that have already been mercilessly squeezed.”
Ms Wood added: “Devolution has the potential to offer people in Wales some protection, but only if there is political will to do so.
“Plaid Cymru will be pushing for the Welsh government to develop an alternative social protection plan for Wales. We know worse is to come and we cannot afford to wait.
“A Plaid Cymru government would ensure comprehensive provision of advice services for those affected.
“Introduce changes to homelessness legislation that would ensure a preventative approach ends homelessness, similar to the law that the Scottish Government has brought in.
“We would view investment in social housing as an opportunity to tackle fuel poverty and create jobs as well as being part of a wider programme of action designed tackle the cycle of decline so many of our communities have faced.”
Llyr Gruffydd, Plaid Cymru’s AM for North Wales, added: “In North-east Wales alone more than 3,400 households will be affected by this new bedroom tax. Studies have shown that a great many of those affected have children with disabilities who need special adaptations to their homes. The cost of re-housing these families would be entirely disproportionate.”