Housing Benefit and Council Tax Benefit

For the new Local Housing Allowance of Housing Benefit see this page.

• Housing Benefit helps people pay their rent

• It is paid by the local authority

• It is means tested

• You need to be liable for rent

• You can qualify in benefit or in employment

Qualifying Conditions

• Claimant/Partner are liable to pay rent

• Live in dwelling as normal home

• Claimant is not in an excluded group – full time students are excluded except lone parents or disabled students

• It is a cost that can be met by HB

• Savings/capital must be under £16000 (but remember Pension Credit exception – aged 60+ in receipt of “Pension Credit Guarantee Credit”, then no capital limit.)

• You are not subject to immigration control.

Liability

• Liable for rent through a legally enforceable agreement - need proof in a paper contract, a tenancy agreement, or a rent book.

• 16/17 year olds – unlike many other benefits (including Council Tax Benefit), 16 and 17 year olds are eligible for Housing Benefit, as long as they are liable for rent.

• Single/couple – a person who is the partner of a liable person can make the claim for Housing Benefit despite not being signatory to the tenancy as long as their partner is a signatory.

• Couples are counted as liable even when the rent is only in one name.

• Joint occupiers – liability is apportioned between joint occupiers by the Housing Benefit office.

• Someone else's rent can be treated as liable (e.g. a tenancy agreement in father's name, where father is actually living elsewhere. The son could be treated as liable for HB purposes).

Temporary Absence

• You are allowed to be absent for up to 13 weeks from the house, provided:

• your absence is unlikely to exceed 13 weeks

• you intend to return

• there is no sub letting

• Special groups are allowed 52 weeks rather than 13: hospital patients, drug/alcohol rehab, remand prisoners (normal prisoners are 13 weeks).

HB on two homes

Is allowed in certain circumstances, although often have to appeal this to a tribunal

• Absent from former home due to fear of violence

• Can include neighbour violence as well as domestic violence, although need evidence such as police reports for neighbour violence.

• Is allowed for 4 weeks – if you are not intending to go back

• Or for 52 weeks – if you are intending to go back (or at least say you are intending to go back)

• Couple, one a student (who can get HB) or in training, and unavoidably need 2 separate dwellings.

• Large family housed by housing authority across two separate dwellings.

• Moved into new building and could not avoid liability for two homes – e.g. 4 weeks notice to quit old home

• Was unable to moved into new home caused by need for adaptations. Painting and decorating does not count as adaptations, has to be more substantial.

HB paid for one property only for a period before moving in

Liable for rent on new home before moving in and delay moving in because

• Awaiting adaptations because of a disability, or

• Applied for a Social Fund payment to help move or set up home and

• are aged 60+, or

• have a child under 6, or

• someone in family is entitled to disability premium or disabled child premium.

Eligible for up to 4 weeks for pre moving in period as long as delay reasonable.

Tenancies where HB will not be paid

• Tenancy is not on commercial basis – very low rents could raise suspicion

• Landlord is a close relative and they reside in the dwelling

• You are responsible for a child of the landlord

• Landlord is your ex-partner

• Tied accommodation

• Contrived tenancies – although HB office have the burden of proof on them. They have to show the tenancy was contrived to claim HB.

The maximum housing benefit payable is

• your eligible rent (for old style housing benefit and for all social rented housing), or

• your eligible rent plus up to £5 bonus (for new style local housing allowance housing benefit)

• minus any non dependent deductions

Eligible Rent

Eligible rent is the amount of the rental charge which can be taken into account for the purpose of calculating housing benefit.

It is the actual rent charged minus ineligible chargers and rent restrictions

Ineligible Charges

• Water charges

• Fuel (unless for communal areas)

• Meals

• Window Cleaning

• Day to day living expenses

• Rent supplements to clear areas

Tactic – If your landlord is amenable, you can have the lease drawn up in such a way as to make any ineligible charges disappear, and all the charges instead appear as eligible rent.

Eligible Charges

• Management costs

• communal entry phones, gardens, communal cleaning

• Communal laundry facilities

• Furniture (landlords)

• Exterior window cleaning if you have a disability

Rent restrictions

• For private landlord tenancies before April 2008 housing benefit rent restrictions could be applied

• For social landlords rent restrictions do not apply.

• For new (post April 2008) private landlord tenancies, local housing allowance rules are used instead.

• Rent restrictions are put in place where a 'rent officer' has decided that the rent for the property is too high. Are a major cause of severe financial problems for benefit claimants.

• Tactic – Write to the local authority and ask for a re-determination by the rent officer. Worth doing especially where the original determination was made years ago in the past. Beware that rent restrictions can go up as well as down.

• Tactic – Check to see if local housing allowance rules are more generous than the rent restriction. If so consider moving in order to start a new HB claim under the new rules. Even a temporary move out and back in with a new tenancy agreement should be enough to trigger a new claim and move you to the local housing allowance rules.

Non Dependent Deductions

These are one of the biggest causes of rent arrears and evictions.

If you have someone over 18 living with you (e.g. a grown up son or daughter), a deduction may be made from maximum housing benefit.

The idea may be that they are meant to contribute towards the rent of the household. Although in reality that often doesn't happen, the HB deduction goes ahead anyway.

Deduction rates for 2009/10 are:

Note that the first deduction rate means that if you have a grown up son or daughter aged 18-24 who is on jobseekers allowance, then if they sign themselves off for a while to do nothing, or if they get sanctioned – then you (not them) are punished with an immediate cut of £7.40 in you housing benefit.

No Non Dependent deductions if

You or your partner are:

• on disability living allowance care component or

• on attendance allowance, or

• are registered blind

Or if your non dependant is

• full time student/youth training

• in hospital for over 52 weeks

• in prison

• is under 18

• in 18-25 and on Income Support, income-based JSA, or income based ESA

• on pension credit

You may need to fill in a “change of circumstances” form with HB office to get this corrected.

Tactic – The first thing to do to stop an eviction is to stop arrears growing. If you can move claimants into one of the above categories – such as into DLA care component – the deductions will be stopped.

How much Housing Benefit is actually paid?

If you are on:

• Income Support

• Income based Job Seekers Allowance

• Income based Employment and Support Allowance

• Pension Credit Guarantee Credit

Then you will automatically receive the maximum housing benefit as described above (that is, your rent minus ineligible charges, rent restrictions, and non dependent deductions).

But otherwise you can be paid less housing benefit than the maximum, because of extra deductions for your income.

Steps to calculate this are:

1. Work out the maximum housing benefit (as above – rent minus ineligible charges, rent restrictions, and non dependent deductions)

2. Work out the applicable amount (below)

3. Work out the total income

4. If total income is less than or equal to the applicable amount, then the maximum housing benefit is paid

5. But if total income is more than the applicable amount, then HB is paid at maximum HB less 65% of the excess. And council tax benefit is similarly reduced by 20% of the same excess. So in total 85% of your total income above the applicable amount is lost to HB and CTB deductions.

Work out the Applicable Amount

The Applicable Amount is a figure set by government which is used to see how much help you need with your rent.

In HB it is made up of two components:

• Personal Allowance, plus

• Premiums (if applicable)

Personal Allowance

Is a basic amount awarded for claimant and any other members of benefit family

depends on

• relationship status

• age

• dependant children

The personal allowance is always set to the same rates as Jobseekers Allowance/Income Support. So £50.95 for 18-24 and £64.30 for 25+ (2009/10 rates).

Remember – people on JSA/IS are automatically excluded from Applicable Amount calculations since they automatically qualify for maximum housing benefit.

Premiums

Extra applicable amount is awarded if the claimant has children, is disabled, or is a carer.

Most important to welfare rights advisers are the disability premiums. The easiest tactic in preventing eviction is to stop arrears increasing. Gaining a disability premium means a higher applicable amount,.potentially resulting in full housing benefit being paid. Disability premiums are awarded automatically (including backdate) when a Disability Living Allowance claim succeeds.

Also important is the Carers Premium. Pensioner couples where both qualify as disabled could qualify for the Carers Premium for caring for each other and yet still receive Severe Disability Premiums. Carers Premium is awarded automatically (including backdate) when a Carers Allowance claim succeeds (even in those cases where no Carers Allowance is paid due to income circumstances). But beware – Severe Disability Premium (which is worth more money) can be lost as a result of claiming Carers Allowance/Carers Premium.

The list of premiums amounts is here.

Full information on the premiums and how to qualify for them is at these course notes.

Also see course notes on Carers Allowance and To Claim or Not To Claim.

Full Calculation Scenarios – use online calculator at entitledto

A 65% rate of deduction is applied for Housing Benefit for income above the applicable amount, plus a 20% reduction in council tax benefit, for a total reduction of 85%. That is an effective marginal tax rate far higher than the rate that is considered to be an unbearable disincentive for the rich.

Although it is possible to use spreadsheets and so on to precisely calculate Housing Benefit and Council Tax Benefit in these situations, it is normally safer, quicker, and easier to use the online calculator here. That can be rerun again and again for different scenarios.

What if you're NOT renting? – Owner Occupiers

Benefit claimants who are owner occupiers should claim for “Help with Housing Costs” as an additional top up to their Job Seekers Allowance or Income Support or Employment Support Allowance. That will pay for their mortgage interest costs and their factors fees. It will not help pay for repayment of mortgage principal, meaning interest only mortgages would be paid but full mortgages would only partially be paid.

Owner occupiers should also claim Council Tax Benefit, which is administered by the same department as Housing Benefit and is processed through the same application form.

Related Tips

1) Many people who do not receive full Housing Benefit because they are in receipt of a works pension, would get the full Housing Benefit if they could only qualify for the disabled or carers premiums. For the disabled premiums that requires applying for Disability Living Allowance. Note that Housing Benefit Carers Premium is paid even if Carers Allowance is not paid (because of means testing of it) – it is enough simply to show you have an underlying entitlement to Carers Premium, by filling out a Carers Allowance application form.

2) For all Housing Benefit claims, but perhaps especially relevant for Local Housing Allowance issues, the Local Authority can make extra payments to top up Housing Benefit through its Discretionary Housing Payments scheme. In Glasgow the form for that is available online, but not as far as I can see for Edinburgh, so to get the form, contact The City of Edinburgh Council, Revenues and Benefits, Chesser House, 500 Gorgie Road, Edinburgh, EH11 3YR, Tel: 0131 469 5000, E-mail: revenuesbenefits@edinburgh.gov.uk

3) Complaints should go in the first instance to The Director of Finance of The City of Edinbugh Council, Donald McGougan, Waverley Court, 4 East Market Street, Edinburgh, EH8 8BG Telephone: 0131 200 2000, email donald.mcgougan@edinburgh.gov.uk. Thereafter to the public services ombudsman. Also, because Housing Benefit and Council Tax Benefit are (uniquely) administered by local councils, intervention by an elected Councillor is often effective in achieving results. These benefits were transferred to the administration of local authorities by Margaret Thatcher in order to fake an election promise to reduce the number of civil servants.

4) Interim Payments – you must be paid within 14days of receipt of your claim if you are a private sector tenant. This is not discretionary, although HB offices sometimes try to treat it that way. You cannot appeal interim payments, but you can argue maladministration, ultimately to the ombudsman. Interim Payments can only be refused if the HB office has reasonable grounds to believe you will not have an entitlement to Housing Benefit.