Housing Benefit
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Housing Benefit is a means tested social security benefit in the UK that is intended to help towards Housing costs for rented accommodation. The Primary legislation governing Housing Benefit is The Social Security Contributions and Benefits Act 1992 . 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 the landlord. Local authorities reclaim the housing benefit they've paid from the Department of 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 of 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 (eg where the person is unable to look after their own affairs). Some tenants who are liable may also be treated as not liable for the purposes of housing benefit (eg 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.
[edit] History
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.
[edit] 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 claimants rent liability that they must meet themselves.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 in to 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 only start from the Monday after the form was requested*.
Applicants who successfully apply for a passported benefit along with their Housing Benefit, have a calendar month to return their 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.
- If the form is returned within a month of request, otherwise benefit is payable from the Monday after the Council receives it.
[edit] 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). 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 Cambridgecriticising 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 their intention ot 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. Several local authorities that have trialled the new system were known as Pathfinder Authorities.
Local Housing Allowance has been trialled in the following local authority areas: 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 6 rooms.
[edit] 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.
[edit] Northern Ireland
In Northern Ireland, the Northern Ireland Housing Executive are responsible for administering housing benefits - not the local council.
[edit] Benefit restrictions for private tenants
Under the more recent Local Housing Allowance(LHA) scheme, for all new private sector tenancies after April 2008, the eligible rent will be determined by the room requirement of the resident family and the area in which they live, rather than the cost of their property.
The room requirement is calculated in the same way as for Reference Rent cases under the previous rent restriction rules of Housing Benefit. It is calculated as follows:
Bedrooms:
- one bedroom for each single adult (over 16) in the property and/or
- one bedroom for each adult couple (over 16 - including same sex couples)
- all children are considered to share one bedroom except in the following circumstances:
- a bedroom each for children of different sexes once the eldest reaches the age of 10 and/or
- a bedroom each for children of the same sex once the eldest reaches the age of 16.
Living Rooms:
- one living room where there are 1-3 people resident in the property
- two living rooms where there are 4-6 people resident in the property
- three living rooms where there are 7 or more people resident in the property
Joint Tenants and single people who who are under the age of 25 are restricted to the cost of a room in shared house without self contained facilities. A self contained room is very badly defined in law by the Department of Works and Pensions. A self contained room is a room where the tenant has exclusive use of one room, a bathroom, a toilet, a kitchen or facilities for cooking.
Therefore a hotel style bedroom with a kettle and toaster may be considered to be self contained, but a studio flat, with a communal toilet would not be considered to be self contained.
Reserve powers do however remain to restrict the LHA rate to a lower level in circumstances such as this, or where a landlord and family have agreed to take on a property that is far too small for their needs.
In the Pathfinder and Second Wave Group of Local Authorities (those detailed in the Local Housing Allowance section above), any tenant who would have received less Housing Benefit under the LHA rules than under their previous scheme had their prior eligible rent protected until their LHA figure is higher than the benefit allowed under the previous scheme, after which time their eligible rent switches to that set under the LHA rules.
Initially, where the LHA amount was more than the actual rent paid, the claimant was permitted to keep any excess Housing Benefit paid over and above their rental liability. The rules have been amended for the national roll out of LHA so that claimants will only be awarded a maximum LHA of £15 per week over and above their eligible rent. Any existing claimant in the Pathfinder/Second Wave Group authorities who receives more than this amount under the existing rules will also have this extra protected for 52 weeks, after which time the £15 maximum excess will apply.
All new claims for most tenants of Private Landlords and any existing claimants who have moved after 7 April 2008 to a new deregulated assured shorthold private sector tenancy will fall under the new LHA scheme.
[edit] 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 their 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, they 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 you are planning to move into has more rooms than the Housing Benefit rules say you need. 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 them, 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.
[edit] 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.
[edit] Housing Benefit Payments for Private Tenants
Housing benefit for private tenants is only paid directly to the landlord or another third party, if the tenant has requested this. In the case of LHA, Housing Benefit may only be paid to the landlord if the tenant is very unlikely to pay their rent because of an inability to handle their finances. In all cases Housing Benefit must be paid to the landlord where the tenant is more than 8 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.
[edit] Rent Restrictions for Council and Housing Association tenants
For those who rent from their Local Authority, direct rent restrictions do not apply. As a result of this, the eligible rent for tenants of Local Authority properties will be their full rent, minus ineligible services and any non dependent 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.
[edit] Housing Benefit Taper
The income of the claimant is compared to their "applicable amount". This is an assessment of the minimum level of income a claimant and their 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 their income is no higher than their applicable amount - then their housing benefit will normally be their full eligible rent. This is the maximum housing benefit they can get. 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 their maximum housing benefit entitlement based on how high their eligible income is. Housing benefit is reduced at a rate of 65p for each £1 of excess income. The calculated income will also include an assumed rate of income generated from any savings held by the claimant.
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. If there is more than £6000 in savings each £500 of savings (or part thereof) will result in an extra £1 a week in income being assumed in the calculation of income, if the claimant is treated as a Pensioner, if the claimant is of working age £1 of income will be calculated each £250 of savings (or part thereof).
Claimants are automatically excluded from benefit if they have more than £16,000 of capital (unless they qualify 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.
[edit] Non-Dependant Deductions
A Non-Dependant is a person that the claimant is sharing their accommodation with excluding a partner and dependent children (generally someone they are 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 this 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 their eligible rent, minus the taper, minus the non-dependant deduction.
[edit] Rates of Deduction
The applicable deductions for 2009/10 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. May 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
[edit] Exemptions to Non Dependent 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 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
[edit] Pre-tenancy Determinations
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.
[edit] 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. It usually meant that the landlord was not willing to consider letting to a tenant who will be dependent on housing benefit to pay the rent.
Performance of Councils has improved after milllions of public money were poured in to support the worst performing Councils. The DWP requires Councils to process claims within an average of 30 days from receipt to payment. Changes in the circumstances of claimants must be decided on within a target of 12 days. After a review of Performance indicators the DWP combined these targets in to one indicator - the 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 get a credit reference on prospective tenants, and once they've moved in, they don't care 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 their rent will be met in full.
Some Landlord organisations have raised concernsabout Local Housing Allowance as they believe it has made rents more difficult to collect from those on Housing Benefit.
[edit] Council Tax Benefit
Council Tax Benefit is assessed in the same 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-dependent deductions are calculated in broadly the same way as housing benefit, except that the taper is 20p, and non-dependent 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 their 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.
[edit] 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 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 their gross income is under £175.00 per week (if any of the second adults are a couple, their income is added together) 15%
- If the second adult is not in receipt of the above Benefits and their gross income is between £175.00 and £227.99 per week (if any of the second adults are a couple, their income is added together) 7.5%
- If the second adult not in receipt of the above Benefits and their gross income is £228.00 per week or more (if any of the second adults are a couple, their 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
[edit] 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 they might become entitled to more housing benefit (for example, a fall in income), they 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 such that they become entitled to less housing benefit, they will be overpaid. In some circumstances the tenant (and or landlord) could be charged with fraud if they do not inform the local authority 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 the claimant 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 further minimise the impact of heavily fluctuating incomes, 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.
[edit] Treatment of overpayments
The local authority can deduct overpayment debts from ongoing entitlement to housing benefit. As of 2008, this rate is a maximum of £9.10 per week, plus half of any 'earned income disregard' which applies to the claimant's income. This means that the maximum standard deduction could be £21.60 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 £12.00 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 £8.70, 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 it. If the claimant doesn't 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, sue to system design Local Authorities only post to Rent Accounts at the end of a tenancy and or where there is a credit on the rent account.
[edit] Appeals
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 Lower Tribunals).
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.
[edit] What is a relevant decision?
A relevant decision is any matter concerning a claim for benefit, for example: 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, however, although these do not carry Appeal rights, you may query of they have used the wrong rate (for example if you should be getting a disability premium or if you are over 25, and have been 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 Works 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.
[edit] 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.
[edit] What should someone do if they disagree with the decision of their Council?
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 their 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 they feel 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.
[edit] Will the Council notify 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.
[edit] Statement of Reasons
A person affected can ask the Council to provide a written Statement of Reasons. The Statement of Reasons does not affect your 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.
[edit] How does a person ask the Lower Tribunal to look at the Council's decision?
A person affected by a decision may request that the Lower 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 their case to be considered by the Lower 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 Lower Tribunal to decide.
[edit] Attending the Tribunal?
Tribunals are held locally. The Lower Tribunal will write to the person to tell them of the date, time and place of their hearing. They will also be asked if they want to attend or whether they would prefer the Tribunal to consider their case without them being present, this is called a 'paper hearing'.
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 Lower Tribunal and a representative of the Council may also be present.
[edit] What if I am 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 they can seek leave to appeal to the Upper Appeal Tribunal. The decision made by an Upper Tribunal is binding on both the Appellant and the Council. Decisions of the Upper Court are made by Judges with specialist knowledge, of equivalent rank to a circuit judge Recourse to further appeal rights after this is through the Court of Appeal and the House of Lords.
[edit] Discretionary Housing Payments
If you get some housing benefit or council tax benefit but are having difficulty paying the rest of your your Housing costs, you 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 Borough 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.
[edit] When can a discretionary housing payment be made?
A discretionary housing payment can 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.
[edit] 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 they are 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.
[edit] How do you 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.
[edit] What information should I send with the claim?
You may be asked to give evidence of your expenditure (ie the money you have going out). This could be bills and or bank statements. You many also be asked to provide any information about your circumstances that make things difficult for you financially.
[edit] Appealing a DHP decision?
You can ask the council to have another look at their decision but if they don't change their mind, you can only challenge the decision if the decision process that led to the refusal has been wrong in law. To do so, an applicant would need to seek a judicial review. It is common practice for Councils to use a Panel led by the Benefit Manager of the Local Authority to reconsider DHP refusals.
As the fund is cash limited a Council may agree to award a DHP in principle but may be unable to do so.
[edit] See also
- Section 8 (housing) - analogous U.S. program
- Low-Income Housing Tax Credit - U.S. housing subsidy program for new construction and rehab.
[edit] External links
- Housing Benefit advice from Shelter
- Details about benefits that you may be entitled to from the Department of Work and Pensions
