Housing & Council Tax Benefit

As part of the Welfare Reform brought in by the Coalition Government Housing and Council Tax benefit is to change along with DLA and the introduction of the new disability allowance which is called Personal Independence Payment and this is to replace DLA for people of working age.

Changes from April 2013

Under occupation in the social sector

Who is affected?

All working age Housing Benefit claimants living in council tenancies and registered provider tenancies are potentially affected.  Registered providers are more commonly known as housing associations or registered social landlords.

How are they affected?

A claimant who has more than the required number of bedrooms will have their Housing Benefit reduced.  The bedroom requirement is calculated using the same rules as for Local Housing Allowance.

• The eligible rent for claimants with one additional bedroom will reduce by 14%.
• The eligible rent for claimants with two or more additional bedrooms will reduce by 25%.

Eligible rent is the core rent plus any eligible service charges.

Example

Mr & Mrs Jones live in a three bedroom council house with one child and the eligible rent is £95.00 per week.  They have one additional bedroom so their eligible rent would be reduced by 14%:

95.00 x 14%    = 13.30

95.00 – 13.30   = 81.70

Housing Benefit would be calculated using the figure of £81.70 per week.

When are they affected?

All claimants affected will see their Housing Benefit reduce from April 2013

Exemptions/protections

• Pensioners, based on oldest member of a couple – Appendix A, timetable for pensioner equalisation.
• Supported registered provider tenancies – not supported council tenancies
• Temporary homeless accommodation
• Shared ownership
• Site rent
• 13 week protection if claimant could afford the rent prior to claiming Housing Benefit
• 52 week protection following the death of a family member living in the same household

Options

• Pay the shortfall
• Find work
• Move to smaller accommodation
• Take in a non dependant, sub-tenant or boarder

Taking in a non dependant

If a non dependant moves in, weekly deductions will be made from Housing Benefit.  The rates from April 2013 are not yet available, but the amounts from April 2012 are shown in the table on page 4.

The claimant would need to balance out:

• The money the non dependant will pay them
• Additional costs of having an additional person in the house e.g. gas & electricity
• The increase in Housing Benefit because they now need an extra bedroom &
• Any decrease in Housing Benefit due to the non dependant deduction

They can then decide whether it is financially advantageous to move a non dependant in.

Taking in a sub-tenant

A sub-tenant is someone who lives with the claimant and pays rent on a commercial basis.  If the claimant is on Income Support, Jobseekers Allowance (Income based) or Employment Support Allowance (Income related) the income from the sub-tenant will affect that benefit.  The DWP should disregard £20.00 per week of the income from the sub-tenant but the rest will be taken into account as income

Example

Miss Gregg lives alone in a two bedroom house rented from a Housing Association.  She is in receipt of Income Support of £71.00 per week and her rent is £100.00 per week.  In 2012/13 Housing Benefit covers her full rent but she is informed her Housing Benefit will reduce to £86.00 per week from April 2013 because of her additional bedroom.

She decides to take in a sub-tenant from April 2013 and charges them £60.00 per week.  The DWP would disregard £20.00 of this income and take the remaining £40.00 as income in the calculation of Income Support.  As such, her Income Support would reduce to £31.00 but she would continue to receive Housing Benefit of £100.00 per week.  She would be financially better off with the sub-tenant:

With sub-tenant           Without sub-tenant

Housing Benefit                                 100.00                              86.00

Income Support                                  31.00                                71.00

Income from sub-tenant                      60.00                                00.00

191.00                              157.00

If the claimant is not in receipt of a passported benefit then the council will take the income from the sub-tenant into account less a £20.00 per week disregard.  The claimant should ask the council for a trial calculation to see how the sub-tenant would affect their Housing Benefit.

Example

In the above example Miss Gregg is in receipt of £71.00 per week contribution based Jobseeker’s Allowance instead of Income Support.  The calculation of Housing Benefit is as follows:

Income

Jobseeker’s Allowance             71.00

Income from sub-tenant          40.00 (60.00- 20.00 disregard)

111.00

Applicable amount                  71.00

Excess                                      40.00

Eligible rent                             100.00

Less 65% of excess                  26.00

Housing Benefit                       74.00

With sub-tenant           Without sub-tenant

Housing Benefit                                          74.00                                  86.00

Jobseeker’s Allowance                                71.00                                  71.00

Income from sub-tenant                              60.00                                 00.00

205.00                                157.00

Taking in a boarder

A boarder is someone who lives with the claimant on a commercial basis and pays rent which includes meals.  If the claimant is on Income Support, Jobseekers Allowance (Income based) or Employment Support Allowance (Income related) the income from the sub-tenant will affect that benefit.  The DWP should disregard £20.00 per week of the income from the boarder plus half of the remainder.  The rest will be taken into account as income.

Example

Mr Allen lives alone in a two bedroom house rented from the council.  He is in receipt of Income Support of £71.00 per week and his rent is £90.00 per week.  In 2012/13 Housing Benefit covers his full rent but he is informed his Housing Benefit will reduce to £77.40 per week from April 2013 because of his additional bedroom.

He decides to take in a boarder from April 2013 and charges them £80.00 per week.  The DWP would disregard £20.00 of this income and half of the remainder i.e. (80.00 – 20.00) ÷2 = 30.00.  In total £50.00 would be disregarded and the remaining £30.00 would be treated as income in the calculation of Income Support.  As such, his Income Support would reduce to £41.00 but he would continue to receive Housing Benefit of £100.00 per week.  He should be financially better off with the boarder:

With boarder                   Without boarder

Housing Benefit                                     100.00                                86.00

Income Support                                     41.00                                  71.00

Income from sub-tenant                         80.00                                  00.00

221.00                                157.00

Mr Allen would also have to take into account the cost of supplying meals and other extra costs such as increases in gas and electricity bills.

If the claimant is not in receipt of a passported benefit then the council will take the income from the boarder into account less £20.00 per week plus half the difference.  The claimant should ask the council for a trial calculation to see how the boarder would affect their Housing Benefit

Benefit cap

Who is affected?

All working age Housing Benefit claimants whose benefits total more than £500 (for a couple/lone parent) or £350 (for a single person); the benefits taken into account are:

• Housing Benefit
• Child Tax Credit
• Child Benefit
• Income Support
• Jobseekers Allowance
• Employment & Support Allowance (except where the support component has been awarded)
• Incapacity Benefit
• Carer’s Allowance
• Bereavement Allowance
• Guardian’s Allowance
• Maternity Allowance
• Severe Disablement Allowance
• Widow’s Pension

Other benefits, including Council Tax Support, are not taken into account.  There are about 30 families in this area affected by the benefit cap.

How are they affected?

Where total benefits exceed £500/£350 Housing Benefit is reduced by the amount the benefits exceed £500/£350.

Example

Miss Price is a lone parent with six children receiving the following weekly benefits:

Housing Benefit          116.00

Child Benefit                87.30

Income Support            71.00

Child Tax credit           285.00

559.30

Miss Price’s benefits are £59.30 over the cap so her Housing Benefit is reduced by this amount and she is only entitled to £56.70 per week from 1 April 2013.

Example

Mr & Mrs Cragg have four children and Mrs Cragg receives Carer’s Allowance for looking after her elderly father who lives next door.  They receive the following weekly benefits:

Housing Benefit                        98.00

Child Benefit                             60.50

Jobseekers Allowance               111.45

Carers Allowance                      58.45

Child Tax credit                        285.00

613.40

Mr and Mrs Cragg’s benefits are £113.40 over the cap so the Housing Benefit is reduced by this amount.  As his Housing Benefit is less than £113.40 he will still receive £0.50 per week from 1 April 2013.

*A minimum of £0.50 Housing Benefit has to be left in payment to allow these claimants to apply for Discretionary Housing Payments.

When are they affected?

All claimants affected will see their Housing Benefit reduce from April 2013.

Exemptions/protections

• Claimants who are working and entitled to Working Tax Credit.  That is:
  • Lone parents working 16 hours per week or more
  • A couple with children working 24 hours per week or more in total with one working more than 16 hours per week

• Claimants in receipt of:
  • Disability Living Allowance or Personal Independence Payment
  • Support component of Employment & Support Allowance
  • Attendance Allowance
  • Industrial Injuries Benefits
  • War Pensions
  • Armed Forces Compensation Scheme payments

• Claimants who have worked continuously for a year will be given 39 weeks grace before the cap is applied.

Options

• Pay the shortfall
• Find work
• Move to cheaper accommodation
• Apply for Disability Living Allowance if any member of the household may qualify

Council Tax Support

From 1 April 2013 the national Council Tax Benefit scheme will be abolished and each council has to devise its own Council Tax Support scheme.  The Government are only funding the Council Tax Support scheme at 90% of the Council Tax Benefit scheme in 2012/13.

Decisions regarding Lancaster’s scheme will not be available until January 2013.

Local Housing Allowance (LHA) Rates

From April 2013 LHA rates will be set annually at the lower of:

• The previous year’s rate uprated by the Consumer Price Index for the previous September
• The 30th percentile of local market rents in the previous September

A claimant’s LHA will no longer be reviewed on the anniversary of their claim but will be uprated every April at the same date as other upratings.  As such, from 1 April 2013 all claimants’ Housing Benefit will be assessed on the following LHA rates:

Where a claimant’s anniversary date is between 1 January 2013 and 31 March 2013 there is no requirement to review their LHA rate on the anniversary.  The rate will be reviewed on 1 April 2013.  This is to prevent claimants having their LHA rate reviewed twice in a short space of time.

From April 2013 if a claimant’s rent is below the LHA rate, and they have a rent increase mid year, then a new regulation has been introduced to allow the council to supersede their benefit award from the date of the rent increase.  Their award of Housing Benefit would increase to the lower of:

• The new rent charged or
• The previous April’s LHA rate

If  you are on any of the qualifying benefits or on low income and need help you may be entitled to apply for Housing Benefit to help with your rent, whether your in Private, Local Authority Housing or Housing Association.

Thank you to Lancaster City Council Benefit section who provided this up to date information

Please Note

You can’t it if you come under:

• You £16,000, in savaings
• You live in a home that is owned by a relative for example Parents & Siblings
• You’re a full-time student, but if your disabled you may still get it.
• you’re an asylum seeker or are sponsored to be in the UK

You must check with your local council because different councils have different ways of dealing with Housing Benefit.

Rates for Housing Benefit 2010 and 2011