Housing Benefit

Housing Benefit

Housing Benefit is a means tested social security benefit in the UK that is intended to help meet Housing costs for rented accommodation. The primary legislation governing Housing Benefit is the Social Security Contributions and Benefits Act 1992.[1] Operationally, the governing Regulations are statutory instruments arising from that Act. It is governed by one of two sets of regulations. For working age claimants it is governed by the "Housing Benefit Regulations 2006", but for those who have reached the qualifying age for Pension Credit (regardless of whether it has been claimed) it is governed by the "Housing Benefit (Persons who have attained the qualifying age for state pension credit) Regulations 2006". It is normally administered, along with council tax benefit, by the local authority in whose area the property being rented lies. In some circumstances, normally council tenants in "out of Borough properties", some claimants may be required to obtain Housing Benefit from the borough that placed them and Council Tax Benefit from their Local Council. For those areas where there is two or more tier local government structure, Housing Benefit is administered by the District or Borough council layer of local government. This is generally the Council responsible for the billing of Council Tax.

Council tenants' housing benefit is awarded as a rebate; reducing the level of rent payable by the tenant. Private tenants' benefit is normally paid to the claimant, who has the right to decide to whom payments are made, and in some cases to the landlord. Local authorities reclaim the housing benefit that they have paid from the Department for Work and Pensions (DWP) by means of submitting heavily audited subsidy claims. Three subsidy claims must be completed each year, an initial estimate, a mid year estimate and a final claim. The final claim must be submitted to the DWP by 31 May. The final audited claim must be submitted by 30 November. The Department for Work and Pensions pays local councils an administration grant based on the numbers of new claims and overall case-load; as well as various other cost factor adjustments to take into account the relative staff and accommodation costs. The level of Administration Grant awarded is announced annually by the Department for Work and Pensions. Some elements of the subsidy claim are subject to penalty, to encourage Local Authorities to control that element of expenditure. This includes high rents for care and support homes and the raising of overpayments. Overpayments of benefit are not fully funded in order to ensure that the Local Authority takes recovery action where appropriate.

Regulation 9 of the Housing Benefit Regulations mean that Housing Benefit is normally only available to those who are liable to pay rent and have permanent right to reside in the UK. In some cases, a member of the household who is not the claimant or tenant may be treated as liable (such as where the person is unable to look after the own affairs). Some tenants who are liable may also be treated as not liable for the purposes of housing benefit (e.g. most full time Higher Education Students and those who live with a closely relative landlord). If a person who does not have permanent right submits a claim, the Home Office may be informed, which could result in deportation. Due to the operation of the Data Protection Act this would be unusual. Housing Benefit requires both the claimant and any partner to have a valid national insurance number.

New or re-entrants in to the Country, claiming within two years of entering the Country may also be excluded from Housing Benefit.

Since April 2008, new private sector benefit claimants receive housing benefit under revised rent restriction rules called Local Housing Allowance.



Housing benefit was transferred from the Department of Social Security to Local Authorities in 1982. This was to coincide with increasing deregulation of the Private Rented Sector Rental market as it was felt at the time that Local Authorities would have a better understanding of local rental market conditions than the DWP. Its full transfer took place in 1989 as part of a major reform of Social Security legislation which also saw the introduction of Income Support.

Concepts and terminology

Housing Benefit will only meet the pure rent costs of any liability. Central to benefit decisions is an assessment of eligible rent and ineligible services. Eligible rent is that part of the rent paid by a person which can legally be covered by housing benefit. Ineligible services are the parts of the claimant's rent liability that he must meet himself. Ineligible services include such things as the cost of heating, lighting, water rates, meals and any general counselling and support that may be included in the rent charged but will not be met by Housing Benefit.

The payment of the benefit is centred on the concept of a benefit week, which is a seven day period running from a Monday to a Sunday. Housing Benefit may be paid on a weekly, fortnightly, lunar monthly or calendar monthly basis. Housing Benefit paid to landlords is usually paid four weeks in arrears. Regulations require local authorities to take into account the needs of the claimant when deciding on the frequency of benefit payments, however due to the complexity of calculating a calendar monthly payment and especially any overpayments that arise, most local authorities pay benefit fortnightly to claimants and four weekly to landlords.

For claimants not on a "passported benefit", the concept of a benefit week is particularly important as benefit will only be paid from the start of a tenancy if the form is requested on the same benefit week as moving in. In all other cases for tenants not on a passported benefit, Housing and Council Tax Benefit will start only from the Monday after the form was requested. If the form is returned within a month of request, otherwise benefit is payable from the Monday after the council receives it.

Applicants who successfully apply for a passported benefit along with their Housing Benefit have a calendar month to return the Housing Benefit form, from the date of application to the passported benefit. If the form is returned within one month of that date benefit starts from the Monday after the start date of the passported benefit - even if that benefit is backdated.

It should be noted an increasing number of local authorities have scrapped or are scrapping paper claim forms.

The process for claiming from these local authorities therefore differs. For claimants who are applying for a benefit administered by the Department for Works and Pensions, details for claiming Housing and Council Tax Benefit will be taken over the phone by the Department for Work and Pensions. These details will then be forwarded to the Local Authority. The date of claim will be the date you first contacted the Department for Works and Pensions.

For claimants not applying to the Department for Work and Pensions, the details will be taken by the local authority. The claimant will need to call for an appointment and the date of claim will be treated as the date he contacted the Local Authority.

Local Housing Allowance

The Government has introduced a new rent restriction policy for the calculation of Housing Benefit for private tenants called Local Housing Allowance. The scheme replaces two previous methods of controlling high rents for most new tenancies. Old scheme cases where the Local Authority decided the level of restriction based on the cost of suitable alternative accommodation (in operation from 15 January 1989 to 1 January 1996), Reference Rent cases, where the level of eligible rent was decided by the Rent Service based on the lower of what a landlord would have been able to obtain had a landlord not been renting to a tenant on Housing Benefit (the claim related rent) and the average cost of similar properties in that area (the local reference rent). For LHA cases the eligible rent is decided in part by the size of property a claimant needs. This figure is published monthly by the Council and the Rent Service. The scheme provides for an incentive to encourage tenants on Housing Benefit to seek cheaper properties because if the tenant moves into cheaper accommodation, the tenant gets to keep the difference (up to a maximum of £15 per week). By publicising how much Housing Benefit a tenant can get for the need for Pre-Tenancy Determinations is removed.

The Local Housing Allowance is the median level for rents in the Broad Market Rental Area. The Broad Market Rental areas are similar in geographic size to Counties. This has led to a number of Counties such as Cambridge criticising the scheme because market rents inside of the County City are considerably higher than those in the Shire areas of the County. The House of Lords ruled against the concept of very large Broad Market Rental areas in the Heffernan case (R(Heffernan) v The Rent Service [2008] UKHL 58 ). The DWP re-introduced legislation to overturn this decision, restoring its intention to use very large broad market rental areas to draw down the cost of the scheme.

Local Housing Allowance was introduced across all Local Authority areas on 7 April 2008. The legislation to enable the scheme is contained in the Welfare Reform Act which received Royal Assent in May 2007. The local authorities that trialled the new system were known as Pathfinder Authorities. They were Argyll and Bute, Blackpool, Brighton and Hove, Conwy county borough, Coventry, East Riding of Yorkshire, City of Edinburgh, Guildford, City of Leeds, London Borough of Lewisham, North East Lincolnshire, Norwich, Pembrokeshire, City of Salford, South Norfolk, Metropolitan Borough of St Helens, Teignbridge, London Borough of Wandsworth

The final scheme was different in that there is a £15 cap between any rent payable and the maximum eligible rent and in some pilot authorities all tenants whose rent had been assessed according to reference rent rules were transferred to LHA, with the national scheme only those who make a new claim or move will go on to LHA.

From April 2009, the maximum LHA that can be awarded will be restricted to the rate payable for five rooms.

Reference Rent Cases

This scheme will remain in operation for existing claimants who do not have a break in their Housing Benefit claim or do not move property. It was introduced with effect from 2 January 1996. The level of eligible rent is decided by the Rent Service. Either on application by the Local Authority on an annual basis or if the tenant had taken out a Pre Tenancy Determination.

Northern Ireland

In Northern Ireland, the Northern Ireland Housing Executive are responsible for administering housing benefits - not the local council.

Non-LHA Housing Benefit Claims

For housing benefit claims made before (or still existing at) the roll-out of Local Housing Allowance scheme on 7 April 2008, different rent restriction rules apply.

The earlier system for calculation of eligible rent is specific to the individual property.

The maximum Housing Benefit will be based on:-

  • the tenant's actual rent less services if the rent is "reasonable";
  • the rent that would be "reasonable" in the area for the size of premises the tenant occupies in comparison to what would have been obtained by the landlord had the property not been rented to someone on Housing Benefit (the claim related rent) or
  • the average level of rent that would have been "reasonable" for that type of accommodation in the area (the Local Reference Rent)

or where the tenant has a home too large for the needs

  • the average level of rent that would be payable for the type of accommodation reasonable in the area for the actual size of accommodation that the tenant needs for his/her household. (Exceptionally large determination)

Further restrictions can be imposed if the tenant is occupying accommodation in the luxury end of the market.

These restrictions are decided either by the Council, if the property is exempt from the Reference Rent rules and the LHA, or the Rent Service if the benefit being paid is subject to Reference Rent rules.

The Rent Officer may visit the property (or may have done so already) although this is not a requirement. If a property is visited and the Rent Officer is not given access, the Council may terminate the claim, unless access is granted. If there are services included in the rent (such as fuel bills, water charges, laundry or room cleaning), the rent officer will deduct the value of these as Housing Benefit cannot pay for them.

The Rent Officer decision is the maximum that the Council can pay for Reference Rent cases, for cases that are treated under the Pre 1996 rules, the figure is used to decide how much the DWP awards the Local Authority in subsidy and is purely indicative. This decision is made annually, although the Local Council may be late in making the application. If the decision is higher the effective date of the increase will be the Monday of the week of the referral; if the decision is lower, the effective date is the Monday after the new decision is received by the Local Council. This is to avoid overpayments arising as a result of the Rent Service decision. If the decision is lower, any overpayment is LA Error and may only be recovered if it is reasonable to expect that the claimant knew that the decision was going to be lower.

The rent officer makes the following valuations.

Claim-related rent (This has three parts)

Significantly High Rent The rent officer will have decided if the rent your landlord has asked for is reasonable compared with other properties in the vicinity. If it is too high, the rent officer will set a reasonable figure. The "vicinity" means the immediate area around the property. If the property is in a town or city, this could mean just the street the property is in or a few adjoining streets. If the property is in the country, the "vicinity" could be a small village.

The "vicinity" is much smaller than the Broad Market Rental Area used to decide LHA Rates.

Number of rooms (size criteria) The rent officer will consider whether the property has more rooms than the Housing Benefit rules say are needed. If the property has too many rooms, the rent officer will decide what the eligible rent used would be for a similar property with the right number of rooms.

The rules are strict and the rent officer is not able to alter them. If an extra room is needed (for example if the claimant has special disability needs), the claimant should apply to the Council for a DHP.

Exceptionally high rent After having made these decisions, the rent officer decides if the lowest figure is still much higher than most rents for properties in the neighbourhood with the right number of rooms. This might be because of the property is in the luxury end of the market, or because of the services or amenities provided. If it is much higher, the rent officer will decide a figure that is in keeping with the general level of rents. ‘Services’ are things that the landlord does or supplies beyond providing the basic accommodation, such as doing the laundry or cleaning the property. ‘Amenities’ are the physical things at the property, such as a swimming pool or tennis court.

Claim-related rent The lowest of these three figures is called the claim-related rent and is shown on the pre-tenancy determination decision.

Local reference rent The rent officer will also decide how much is generally paid for property with the right number of rooms in the ‘locality’. This is called the local reference rent and will be shown if it is lower than the claim-related rent.

The local reference rent is the midpoint of the range of rents for all types of property with a similar number of rooms in the same ‘locality’ as the claimants home. The ‘locality’ is an area with at least two neighbourhoods. Within this area there will be a mix of property types and alternative places to live within a reasonable travelling distance of similar public amenities. The range of rents used will not include any rent that is unusually high or low.

Single room rent If the claimant is single and under 25, with no non-dependants or children living with the claimant, the rent officer will also decide how much is generally paid in the locality for a single room with a shared living room, kitchen, bathroom and toilet, but without any food or fuel bills included. This is called the single room rent and will be shown if it is lower than the claim-related rent. If the claimant is severely disabled, the Single Room Rent will not be applied.

A more generous rent restriction scheme applies to tenants of charities, voluntary organisations or registered social landlords, whose tenancy includes care support and supervision provided directly by the landlord. These tenants fall under the rules in operation prior to 2 January 1996. Under this scheme rents may only be restricted to the cost of suitable alternative accommodation and in the case of claimants with children, or claimants who are elderly or disabled, the rent can only then be restricted if it is reasonable to expect the claimant to move and if there is accommodation available.

Exemptions from Rent Restrictions

No Rent Restriction applies in the following circumstances:

In a case where the claimant occupies a dwelling and a family member dies, the maximum rent shall be either— (a) the maximum rent which applied before the death occurred; (no further size restriction will be applied) or (b) in a case where there was no maximum rent set by the Rent Service, the full rent less services for a period of 12 months from the date of such a death.

Where the claimant was able to meet the full rent for the dwelling when the tenancy was entered into, (there is no minimum period for this) no restriction can be applied during the first 13 weeks of the claimant's award of housing benefit. This rule does not apply if the claimant or the claimant's partner was paid Housing Benefit within 52 weeks of the start date of the current benefit award.

Housing Benefit Payments for Private Tenants

Housing Benefit can only be paid to the landlord where the tenant is more than eight weeks in arrears.

Any decision to pay the landlord in an LHA case must be decided by reference to a vulnerability policy which is available from the local council.

Rent Restrictions for Council and Housing Association tenants

For those who rent from the Local Authority, direct rent restrictions do not apply. As a result of this, the eligible rent for tenants of Local Authority properties will be full rent, minus ineligible services and any non-dependant deductions.

Where Council Tenant Rents are high in comparison to guidelines issued by the Department of Communities and Local Government, the restriction applies the subsidy payable to Local Authorities and not the individual claimant. This is done through the Rent Rebate Subsidy Limitation Percentage. Rent Rebate is normally paid at a subsidy rate of 100%. Where rents are high the amount payable by the DWP is the percentage derived from dividing the average rent for the Authority by the target rent figure. The cost of this is then met by Housing Revenue Account (the total Borough funds for Council Tenants).

Tenants of Registered Social Landlords (Housing Associations) do not normally face restrictions but where a local authority considers the rent to be unreasonably high, or if the property is "unreasonably large" for the circumstances of the claimant it may be referred to The Rent Service and a restriction may be applied.

The important point is that the rent, or under occupancy must be unreasonable. So a couple in a two bedroom house will not necessarily be referred to the Rent Service.

Housing Benefit Taper

The income of the claimant is compared to the "applicable amount". This is an assessment of the minimum level of income a claimant and household need to live on. This is broadly similar to the amount that such a person would be paid as Income Support / Job Seekers Allowance. If a claimant is receiving a "Passported Benefit" income support, income-based Jobseeker's Allowance, or Pension Credit Guarantee or if the income is no higher than the applicable amount, the claimant's housing benefit will normally be the full eligible rent. This is the maximum housing benefit possible. However, deductions can be made where there are non-dependants living in the household (except where the claimant is blind or in receipt of the higher rate of the Care component of Disability Living Allowance).

If a claimant's income is higher than applicable amount then a deduction is made from the maximum housing benefit entitlement based on how high the eligible income is. Housing benefit is reduced at a rate of 65p for each £1 of excess income. (For Council Tax benefit the amount is reduced by 20p for each £1). The calculated income will also include an assumed rate of income generated from any savings held by the claimant.

For example, assume that the maximum permitted housing benefit that could be paid for an individual who attracted the full rate of benefit were £100. Assume further that this claimant is not entitled to the full amount because his income exceeds the applicable amount by £60; that is, he has excess income of £60. The maximum possible benefit will be reduced by 65% of £60 to a value of £100 - (65% X £60) = £100 - £39 = £61; his award of housing benefit using the current taper is thus £61 instead of the maximum possible amount of £100.

Actual rates of interest are ignored when calculating income from Capital. When calculating income from capital the first £6000 of savings are disregarded. The Council may still require proof of any savings that are held below this amount. Undeclared savings and income are often picked up through data matching. This matching process is compulsory for all Local Authorities. Not declaring savings or income is likely to lead to the claimant being prosecuted for fraud. Since 2009, if there is more than £10000 in savings each £500 of savings (or part thereof) results in an extra £1 a week in income being assumed in the calculation of income. This is termed notional income, but in any case housing benefits cannot be paid if the total savings reach £16000. (See below)

Claimants are automatically excluded from benefit with more than £16,000 of capital (unless qualifying for Pension Credit Guarantee). Certain types of capital, such as personal injury compensation payments and the value of capital that is no longer available to the claimant are disregarded.

This deduction is known as the taper, and in this way, housing benefit is means tested.

Non-Dependant Deductions

A Non-Dependant is a person that the claimant is sharing accommodation with excluding a partner and dependent children (generally someone the claimant is getting Child Benefit for) Boarders or Joint Tenants. Normally non-dependants are adult children still residing at home. Deductions are made from housing benefit for non-dependants. The principle of non-dependant deductions is that other adults living in the home should contribute towards their housing costs and should not be covered by housing benefit. The amount of the non-dependant deduction is set in the benefit regulations and is based on the gross income of the non-dependant.

No deduction is applied where the non-dependant is aged under 25 and is on a passported benefit. The lowest deduction applies in all other cases except where the non-dependant is in full time (above 16 hours) remunerative work. If the non-dependant is in full time remunerative work, a tiered level applies, climbing to as high as £47.75 per deduction per week.

As a general rule, a person's Housing Benefit entitlement will be eligible rent, minus the taper, minus the non-dependant deduction.

Rates of Deduction

The applicable deductions for 2009/10 and 2010/2011 are as follows:-

Non-Dependant aged over 18, working 16 hours a week or more with gross income of:- (Weekly)

  • Less than £120.00 £7.40
  • £120.00 to £177.99 £17.00
  • £178.00 to £230.99 £23.35
  • £231.00 to £305.99 £38.20
  • £306.00 to £381.99 £43.50
  • £382.00 or more £47.75
  • In receipt of Pension Credit NIL
  • Aged 25 or over and receiving Income Support or Income Based Job Seekers Allowance

or aged 18, or over and not in remunerative work £7.40

  • In receipt of Main Phase Income Related Employment and Support Allowance (any age) £7.40
  • In receipt of Contributions-Based Employment and Support Allowance at any phase (any age). £7.40
  • Aged less than 25 and receiving Income Support, Income Based Job Seekers Allowance

or Assessment Phase of Income Related Employment and Support Allowance. NIL

Council Tax Benefit Non-Dependant aged over 18, working 16 hours a week or more with gross income of:- Weekly

  • Less than £178.00 £2.30
  • £178.00 to £305.99 £4.60
  • £306.00 to £381.99 £5.80
  • £382.00 or more £6.95
  • Others aged 18 or over £2.30
  • In receipt of Contributions-Based Employment and Support Allowance at any phase. £2.30
  • In receipt of Pension Credit and in remunerative work NIL
  • In receipt of Pension Credit and not in remunerative work, or receiving Income Support,

Income Based Job Seekers Allowance or Income Related Employment and Support Allowance NIL

For Council Tenants or tenants of Registered Social Landlords the weekly deduction may appear higher as the amount is recalculated to take into account rent free weeks. If the deduction applied is £7.40, this figure will be multiplied by 52 (or 53 in a leap year) and divided by the number of weeks that you are liable to pay. Many Local Authorities have 4 rent free weeks, on a 52 week year this would produce the following calculation

£7.40 x 52 = £384.80 £384.80 / 48 = £8.02

Exemptions to Non-Dependant Deductions

No deduction applies for any non-dependant whatsoever if the Housing Benefit claimant or any partner is:

  • Registered Blind
  • In receipt of Severe Disablement Allowance
  • In receipt of the Care Component (any rate) of Disability Living Allowance
  • In receipt of Exceptionally Severe Disablement Allowance

or if the non-dependant:

  • Is under 18
  • Is under 25 and on Income Support / Job Seekers Allowance (Income Based)
  • Is on a Youth Training Scheme
  • Is a full time student
  • Normally lives elsewhere

Pre-tenancy Determinations

No DSS. Advertisement for a house in Bungay, Suffolk. Some private landlords will not rent property to claimants.

Prior to the introduction of the Local Housing Allowance the only way of finding out whether the benefit for the property would be restricted would have been to obtain a Pre Tenancy Determination. These had to be requested through the local authority and The Rent Service decision was treated by the Local Authority in the same way as any other referral to the Rent Service. Requests needed to be made by a prospective tenant and the landlord of the property. If the circumstances of the individual claimant were broadly the same as that of the prospective tenant who made the request for the PTD the decision remained valid for a year.

Delays in Processing leading to "No-DSS"

Many larger councils suffered from delays in processing Housing Benefit claims. Delays of up to a year were reported. Delays and rent restrictions were so endemic in the system that it became common to see classified advertisements for lettings stating No DSS. (That is the Department of Social Security, now called the Department for Work and Pensions (DWP), but still widely known under its old name.) It usually meant that the landlord was not willing to consider letting to a tenant who would be dependent on housing benefit to pay the rent.

Performance of councils has improved after millions of pounds in public money were poured in to support the worst performing councils. The DWP requires councils to process claims within an average of thirty days from receipt to payment. Changes in the circumstances of claimants must be decided on within a target of twelve days. After a review of performance indicators, the DWP combined these targets into one indicator - the right time indicator.

Very few councils are now reporting backlogs, although the recession has seen an increase in case-load which has resulted in the Government granting Local Authorities an additional £45 million for 2009/10 in order to ensure continued good performance.

In practice, lettings agencies will usually obtain credit references on prospective tenants and, once the tenants have moved in, they are ambivalent as to whether tenants claim housing benefit or not, as long as the rent is paid on time.

Local Housing Allowance is designed to ensure that landlords do not have a reason to discriminate against tenants on Housing Benefit, as in most cases there will be no need for a landlord to know that the tenant is on Housing Benefit, and the tenant can know in advance if rent will be met in full.

Some landlord organizations have raised concerns about Local Housing Allowance as they believe it has made rents more difficult to collect from those on Housing Benefit.

Council Tax Benefit

Council Tax Benefit is assessed in a similar manner to housing benefit, with a few differences. Whereas housing benefit uses the weekly rent as a basis for assessment, council tax benefit uses the annual amount from the claimant's council tax account, calculated on a weekly basis by dividing the number of days in the year and multiplying the figure by 7. Any discounts awarded to the account are taken into account (so that the claimant's council tax benefit award will never exceed the actual liability).

Excess income and non-dependant deductions are calculated in broadly the same way as housing benefit, except that the taper is 20p, and non-dependant deductions are significantly lower

Council Tax Benefit is paid as a rebate against the Council Tax Account for the remainder of the financial year benefit was first applied for - the claimant does not normally receive the money directly. Where a claimant has paid Council Tax, the Local Authority would normally refund the credit on the bill. Both benefits, although following the same principles are quite separate legally. Usually, a separate application for council tax benefit is not required, as most Councils have a combined claim form and the council tax benefit would be assessed at the same time as housing benefit, if the claimant is eligible for both. Where one benefit ends and the other is still in payment a new claim will be required for the benefit that has ended if the circumstances of the claimant change.

Second Adult Rebate

In some cases, where the account holder would not normally be entitled to council tax benefit due to income, but is living with a second adult who has a low income or is in receipt of Income Support Jobseeker's Allowance or another benefit, second adult rebate could be granted. The second adult should not be jointly responsible for paying the council tax and should not pay rent to the council tax payer. The application process for this is the same as for council tax benefit. Where a claimant is entitled to both a second adult rebate and Main Council Tax Benefit, the benefit that is the higher amount of the two benefits will be awarded.

2009-10 and 2010/2011 Second Adult Rebate Rates For claimants with one second adult

  • If the second adult is in receipt of Income Support, Pension Credit, Income Based Jobseekers Allowance or Income Related Employment and Support Allowance, 25%
  • If the second adult is not in receipt of the above Benefits and the gross income is under £175.00 per week (if any of the second adults are a couple, the income is added together) 15%
  • If the second adult is not in receipt of the above Benefits and the gross income is between £175.00 and £227.99 per week (if any of the second adults are a couple, the income is added together) 7.5%
  • If the second adult not in receipt of the above Benefits and the gross income is £228.00 per week or more (if any of the second adults are a couple, the income is added together) nil

For claimants with two or more second adults

  • If all the second adults are in receipt of Income Support, Pension Credit, Income Based Jobseekers Allowance or Income Related Employment and Support Allowance 25%
  • If at least one of the second adults is not in receipt of the above Benefits and the combined gross income of all the second adults is under £175.00 per week 15%
  • If at least one of the second adults is not in receipt of the above Benefits and the combined gross income of all the second adults is between £175.00 and £227.99 per week 7.5%
  • If at least one of the second adults is not in receipt of the above Benefits and the combined gross income of all the second adults is £228.00 per week or more nil

Changes in circumstances

Local authorities advise tenants that if their circumstances change, they must notify the housing benefit office "immediately".

In the event that a tenant's circumstances change such that the tenant might become entitled to more housing benefit (for example, a fall in income), the tenant must notify the local authority within one month, or the increase will take place from the Monday following the date the notification takes place (unless the claimant can show a good enough reason for the delay).

If a tenant's circumstances change so that the tenant becomes entitled to less housing benefit, the tenant will be overpaid. In some circumstances the tenant and/or landlord, will be charged with fraud if the local authority is not informed within a reasonable amount of time. Recovery of overpaid Housing Benefit is governed by the Housing Benefit Regulations. All overpayments are recoverable, except those caused by official error where claimants could not at the time of receiving payment have known that they were being overpaid.

In practice, this means that tenants who do contingent work, have fluctuating income, or whose circumstances change frequently for other reasons, must report to the housing benefit office on a regular basis. There are no standard forms for such reporting, and each week's income may be treated as a separate change in circumstance. As a result, it can be very complicated to check that housing benefit taper deductions are correct if a tenant's income fluctuates wildly. The Local Authority is allowed to take a reasonable average over a longer or shorter period of time in order to minimise the impact of this. Critics of the system contend that this is a powerful disincentive for unemployed people to find work, particularly if they suffer from mild disabilities or learning difficulties.

In order to minimise the impact of heavily fluctuating incomes further, changes that used to require a new claim, such as the award of extended payments, stopping of Incomes Based Job Seekers Allowance or Income Support are now treated as a change of circumstances. Reducing the amount of paperwork needed by the Claimant and Council.

Treatment of overpayments

The local authority can deduct overpayment debts from ongoing entitlement to housing benefit. As of April 2010, this rate is a maximum of £9.90 per week, plus half of any 'earned income disregard' which applies to the claimant's income. In addition, a local authority can increase deductions by half (50%) of certain disregards, if applicable for earnings regular charitable income or voluntary payments War Disablement Pension or War Widows Pension

This means that the maximum standard deduction from April 2010 could be £22.40 per week, if an earned income disregard of £25.00 would normally apply. The only exception to this is in overpayments where the claimant has been convicted or has admitted to fraud, at which point the overpayment can be recovered at a maximum of £13.20 per week plus half the earned income disregard. However, the recovery amount may be reduced at the Local Authority's discretion if the claimant is suffering hardship.

The recovery amount from ongoing entitlement is affected by the amount of weekly normal entitlement. The minimum housing benefit that can be paid, regardless of overpayment recovery, is 50p per week. For example, if the entitlement is £7.50 and the overpayment recovery level is £9.90, the claimant will receive 50p every week until recovery is complete with £7.00 going towards the overpayment.

If the claimant is no longer entitled to housing benefit, the local authority can also send the claimant an invoice for the balance. If the claimant does not pay, the local authority has roughly the same legal means to recover it as other unsecured creditors, such as credit cards and utilities. Unlike council tax debts, the tenant cannot be put in prison for non-fraudulent overpayments. The Council does have the ability to use an accelerated County Court process for the recovery of overpayments.

A Council may also seek to recover Housing Benefit overpayments from other Social Security Benefits or Housing Benefit payments made by other Local Authorities.

If the housing benefit was paid directly to the landlord, and the landlord is expected to have been aware of the overpayment (such as failure to disclose ineligible service charges, benefit exceeding the actual rent, and benefit paid past termination of tenancy or tenant's death), the local authority can hold the landlord liable for the overpayment either instead of or in addition to the claimant.

Housing Benefit overpayments may also be deducted from Housing Benefit paid to another tenant of the same landlord. (Innocent Party Recovery). The law requires that the Landlord treats any deduction made against the innocent party as not having been made.

For council tenants, overpayments may only be posted to a rent account where the Council is able to separately identify re-payments of overpaid benefit to payments of rent. In practice, due to system design and internal procedures, Local Authorities generally post to Rent Accounts only at the end of a tenancy and or where there is a credit on the rent account.


The Housing Benefit (Decision and Appeals) Regulations 2001 state that any 'person affected' by a relevant decision can ask the Council to revise its decision (Look at the decision again). It also states that a person affected can appeal against the decision of a Local Authority to an independent appeal tribunal (the First-tier Tribuanl).

This means that every time a decision is made about Housing benefit, you must be sent a Decision notice, notifying you of the amount of Housing and Council Tax Benefit you have been awarded, if you have been overpaid/underpaid or if your benefit has been terminated. If you disagree with this decision you will have to appeal in writing within one calendar month of the decision, stating your reasons as to why you feel that your calculation has been decided incorrectly.

What is a relevant decision?

A relevant decision is any matter concerning a claim for benefit, such as the amount of benefit payable, the rent eligible for benefit, the calculation of a claimant's income, or the calculation and recovery of an overpayment. Some decisions, mainly administrative, do not carry a right of appeal (such as an applicable amount or the amount of LHA). You will be notified if the matter you are disputing does not carry the right of appeal, but although these do not carry Appeal rights, they may be queried if the wrong rate was used (for example if one should be getting a disability premium or is over 25 and was restricted to the eligible rent for a room with shared facilities).

A request for a revision means that the Local Authority will look again at its decision regarding a claim for benefit and will make sure that it has been assessed correctly.

An appeal means that a Tribunal, independent of the Council and the Department for Work and Pensions (DWP), will consider the Council's decision. It is normally quicker to ask the Council to reconsider its decision than ask for an appeal.

Who is a "Person Affected"?

A person affected is :-

  • A claimant
  • Someone acting on behalf of the claimant who is appointed by the Courts
  • Someone who the Council agrees is appointed to act on behalf of the claimant (An Appointee)
  • A landlord - but only in matters relating to whom payment of Benefit is to be made
  • An agent - but only in matters relating to whom payment of Benefit is to be made
  • Any person from whom it is determined an overpayment is to be recovered

This means that only the claimant can ask the Council to revise a decision concerning the calculation of a claimant's entitlement; and that the landlord or agent can only ask the Council to revise a decision about whether payment should be made to a landlord and whether the decision to recover an overpayment from a landlord or agent has been correctly made.

The law requires that where an overpayment has been appealed both the claimant and any alternative payee (normally the landlord) must have been notified of the decision and the appeal.

What someone who disagrees with the decision of the council should do

A person affected can query the Council decision and request further information (Statement of Reasons) about the decision. The Council must provide an explanation, detailing the legislation used to arrive at the decision. If after you receive your explanation you can appeal or request a revision of the Council's decision.

The affected person must write to the Council within one calendar month of the date on the decision letter. In the request for revision, the person affected must state reasons as to why the decision is wrong.

In exceptional circumstances, the council will extend the time limit for requesting a decision to be revised. The person affected must write to the council giving reasons for not requesting a revision at the appropriate time.

The council will not consider a later request for a revision where the request is made 13 months after the decision notice was first issued.

If the council notifies the person of the outcome of a request for a revision

After reconsidering its decision, the council will write to the person affected stating that the decision has been changed or that it will stay the same. The council may request further information from the person affected before it makes a final decision. The person must provide the information within one month of the request.

Statement of Reasons

A person affected can ask the council to provide a written Statement of Reasons. The Statement of Reasons does not affect the right of an appeal. The statement will explain how the council reached its decision. The time taken for the Council to provide the statement may extend the time limit for requesting a revision or seeking an appeal to the Tribunal.

How does a person ask the first-tier tribunal to look at the council's decision?

A person affected by a decision may request that the first-tier tribunal decides on the case. This is requesting an Appeal. The request must be in writing and must be received by the council within one month of the date on the decision notification letter.

Where the person affected previously requested that the Council revise its decision, and has received a reply from the council regarding the request, the person has one month from the date the Council notified the outcome of the request to ask for the case to be considered by the first-tier tribunal.

In exceptional circumstances, the time limit for requesting an appeal can be extended. The person affected must write to the council giving grounds for not appealing at the appropriate time. A request for an extension of the time limit will not normally be considered if it is made 13 months after the notice of decision was issued. This matter is for the First-tier Tribunal to decide.

Attending the Tribunal

Tribunals are held locally. The Tribunals Service will write to the person to tell of the date, time and place of the hearing. The person will also be asked if attendance is wanted or not.

In most cases, the Tribunal will consist of only one panel member who is a legally qualified person. The maximum panel size is three. If complicated financial matters are to be considered, a financially qualified person will also be present. The Clerk to the Tribunal and a representative of the Council may also be present.

If not happy with the Tribunal's decision

If the council or the person affected feels that the decision of the Lower Appeal Tribunal is wrong in law, one may seek leave to appeal to the Upper Tribunal. The decision made by an Upper Tribunal is binding on both the Appellant and the Council. Decisions of the Upper Tribunal are made by Judges with specialist knowledge, of equivalent rank to a circuit judge. Recourse to challenge the decision further must be made through the Court of Appeal and the Supreme Court of the United Kingdom.

Discretionary Housing Payments

If one gets some housing benefit or council tax benefit but is having difficulty paying the rest of one's housing costs, the person may be able to get a discretionary housing payment. The funds for DHPs are cash limited, although they are not often used in full by Local Authorities. The DWP publishes how much is available to for DHP funding to Local Authorities each year.

The Council may contribute an additional 2.5 times the amount awarded to the Local Authority by the DWP.

Payment of a DHP is dependent on Housing and Council Tax Benefit entitlement but it is not an award of Housing Benefit. A decision as to whether to award a DHP is entirely the discretion of a Local Authority.

When a discretionary housing payment may be made

A discretionary housing payment may be paid if the council believes that a claimant needs further assistance with housing costs. This may include help with paying off arrears in some circumstances.

A discretionary housing payment cannot be paid if the reason for shortfall is that your benefit has been reduced to recover an overpayment.

Who can get a discretionary housing payment

A claimant must be entitled to a minimum of 1p per week Council Tax Benefit, or 50p per week Housing Benefit. Each council is given a pot of money and it is allowed to decide who should be given the payments. The maximum amount that can be awarded is the full eligible rent (a DHP can be used to dis-apply any rent restrictions) or Council Tax liability (after any discounts).

The fund may be used to minimise the impact of rent restrictions for Homeless referral cases or to prevent evictions. In general it is used to ensure that those who claim Housing Benefit do not suffer high levels of hardship.

The housing benefit department will usually take into account any special circumstances that contribute to your financial difficulties, for example, if:

  • you have to pay legal costs
  • you have to pay child maintenance
  • you have extra heating costs because you are sick or have a disability
  • you have additional travel costs because you travel to a doctor or hospital or
  • you care for a relative or friend.

How to claim a DHP

You may request a dhp in writing but you will generally have to fill in a completely separate claim form and undergo a more extensive means test, that covers your outgoings as well as your income. The Council can however use existing information to decide on entitlement to a DHP where it has been given consent to do so, explicitly by its main claim form. It is unusual for a Council to do this.

Information to be sent with the claim?

One may be asked to give evidence of your expenditure (the money you have going out). This could be bills and or bank statements. One many also be asked to provide any information about circumstances that make things difficult financially.

Appealing a DHP decision

One may ask the council to have another look at the decision, but if it does not change its mind, one may challenge the decision only if the decision process that led to the refusal was wrong in law. To challenge a decision, an applicant would need to seek a judicial review. It is common practice for councils to use a Panel led by the Benefit Manager, councillors and even welfare rights groups when reconsidering DHP refusals.

As the fund is cash limited a Local Authority may agree to award a DHP in principle but may be unable to fund the award. This happens very rarely.

Changes to housing benefit in 2011

In the spending review of the 20th October 2010 George Osborne announced a series of changes to housing benefit. From October 2011 claimants will only be able to claim a rent based on the 30th percentile of rent in their area (previously 50th percentile). The age at which single people will be able to claim the full amount rather than the youth shared room rate will be increased to 35 years. Claimants whose claim is attached to a jobseeker's allowance claim will have their claim reduced by 10 percent after one year. These changes will mean significantly lower amounts of benefit will be paid. The government has stated that the purpose of these reductions is to reduce the fiscal deficit and to increase the incentive for people to work. The reduction in benefits will mean that some families will have to leave their existing homes and find cheaper ones.

See also


External links

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