From 1 April 2013 the way Housing Benefit is calculated for claimants living in accommodation rented to them by a local authority, registered housing association or other registered provider of social housing has changed.
This means there are restrictions on the size of property Housing Benefit will pay for, based on who lives in the property. If someone is assessed as having more bedrooms in their accommodation that is necessary according to the new rules, they will be considered to be under-occupying that property and a percentage reduction will be applied to their eligible rent and service charges. Please see this DWP leaflet for more information.
How will this be worked out?
We rules will (for benefit assessment purposes) allow one bedroom for:
every adult couple (married or unmarried)
any other adult aged 16 or over
any two children of the same sex aged under 16
any two children aged under 10
any other child (other than a foster child or child whose main home is elsewhere)
a carer (or team of carers) who do not live with the claimant but provide them or their partner with overnight care
What does this mean for people claiming Housing Benefit for the first time?
Anyone who claims Housing Benefit for the first time on or after 1 April 2013 will only be entitled to Housing Benefit that covers the size of property calculated as appropriate for the size of their household using the above rules.
Stuart and Isabel have three children, Jenny who is 12, Max who is 9 and Alice who is 6.
Under the size criteria rules Stuart and Isabel would be entitled to Housing Benefit for three bedroom accommodation:
One bedroom for themselves, one for Jenny and Alice and one for Max.
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What does this mean for people who already receive Housing Benefit?
For those people who currently claim Housing Benefit, the local authority will compare how many bedrooms there are in their property with the number of people living there. They will then use the above rules to assess whether they are under-occupying their accommodation.
If someone is considered to be under-occupying their accommodation there will be a reduction in the amount allowed for rent and any service charges of:
Prima and Rajesh have two children, Priya who is 8 and Krish who is 6.
They live in a three bedroom apartment and currently receive £85 Housing Benefit a week to cover the full rent.
Under the new size limit rules they would only be entitled to Housing Benefit for two bedroom accommodation, one bedroom for themselves and one for Priya and Krish who would be expected to share a room because they are both under 10.
The local authority would consider Prima and Rajesh to be under-occupying their current accommodation by one room and would apply a 14% reduction.
Sonia is a single parent with two children, Rachel who is 11 and Peter who is 9
She lives in a three bedroom flat and currently receives £100 Housing Benefit a week to cover the full rent.
Under the size criteria rules Sonia would be entitled to Housing Benefit for a three bedroom house. As Rachel is over 10 she and Peter would not be expected to share a room. Sonia would therefore not see any reduction in her Housing Benefit.
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The size limit rules will take into account everyone living in the property when calculating how many bedrooms Housing Benefit should be paid for. If it is decided that the accommodation is under-occupied, a percentage reduction will be taken off the rent for the household and Housing Benefit will be paid on the basis of the proportion of the rent the claimant is liable to pay.
Stewart lives in a three bedroom flat which he shares with Eusebio. The rent is £100 a week and they split the rent 50/50. Stewart currently receives Housing Benefit to cover his share of the rent.
Under the size limit rules Stewart would be considered to be under occupying as him and Eusebio would only require two rooms.
As he is under-occupying by one room a 14% reduction would be applied to the full rent making it £86, as Stewart is liable for half the rent he would then receive £43 Housing Benefit a week.
If Stewart decided to remain in the flat he would need to make up the remaining £7 himself.
Ella is a lone parent with one child, Laura. She lives in a four bedroom flat as a joint tenant with her friend Jane and pays half of the £130 weekly rent. Jane’s earnings take her above Housing Benefit eligibility, but Ella is unemployed and entitled to Housing Benefit of the full eligible rent (half of £130 = £65).
Under the size limit rules, the accommodation is under-occupied by 1 room. Total rent = £130, minus the 14% reduction of £18.20 = £111.80. Ella’s eligible rent is half of this – that is, £55.90.
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There are certain circumstances where the size limit rules will not be applied.
State Pension credit age – The size limit rules will only apply to claimants of working age. Any claimant over state pension credit age or with a partner over state pension credit age will be exempt from the size limit rules from April 2013.
Non-Mainstream accommodation – These are mooring charges for house boats and site charges for caravans and mobile homes as well as various “excluded tenancies” within schedule 2 to the Housing Benefit Regulations, such as regulated tenancies.
Temporary accommodation – Any claimant who is accepted as homeless under Homelessness legislation of the Housing Act 1996 and placed in temporary accommodation by the local authority, as described in regulation A13(3), because they are homeless or to prevent homelessness
Exempt accommodation – The size limit rules will not be applied to those in supported ‘exempt’ accommodation. This is a particular type of supported accommodation defined for Housing Benefit purposes as accommodation provided by a non-metropolitan county council in England, a housing association, a registered charity or voluntary organisation where that body or a person acting on its behalf also provides the claimant with care, support or supervision as set out in paragraph 4 of Schedule 3 to the Consequential Provisions Regulations 2006.
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Shared accommodation rate
There is no shared accommodation rate in the social rented sector. A person living on their own will require one bedroom, whether the property is self contained or not regardless of their age.
How will existing Housing Benefit claimants be contacted?
Local authorities will assess who may be under-occupying their accommodation. If someone is identified as under-occupying the local authority will get in touch with them to notify them of this and to highlight what options they have.
The local authority will contact claimants in plenty of time before the implementation of the size limit rules to allow time for people to make alternative arrangements.
It is important that as soon as a claimant receives notification they start to consider their options and seek appropriate advice.
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What options do people have?
If someone is assessed as under-occupying their accommodation and experience a reduction in Housing Benefit, there are a number of courses of action open to them. They may wish to find more appropriately sized accommodation or stay where they are and make up the shortfall in rent themselves.
Move – Someone may decide that it would be sensible to move to appropriately sized accommodation in the social rented sector. Their landlord will be able to talk this through with them and advise them as to whether this is a viable option.
They may decide that moving to the private rented sector would be appropriate. Again their landlord or the local authority will be able to advise them about this.
It may be possible to claim a Discretionary Housing Payment for help with moving costs.
Ask non dependants to contribute – If someone decides to stay in their current accommodation and make up the shortfall in rent themselves they may wish to ask other non dependants living with them to contribute to the additional rent.
Take in a lodger – Taking in a lodger to fill an extra bedroom may be a good option for some claimants. The lodger would be assessed as part of the household, meaning they would not necessarily be considered to be under-occupying and may have more income due to the extra rent. See factsheets on Taking in a lodger and treatment of other income for more details on this. These calculations may be complicated and you may wish to seek further advice. (See other support and advice at the end of this factsheet).
Increase hours of work – If a claimant is in employment they may consider increasing their working hours if possible to make up the shortfall in rent. See factsheet on treatment of other income for more details on this.
Take a job – If a claimant is not currently in employment, finding a job could help them pay the additional rent. See factsheet on treatment of other income for more details on this. These calculations may be complicated and you may wish to seek further advice. (See other support and advice at the end of this factsheet).
Apply for a DHP – In certain circumstances a claimant may be entitled to a payment from the Discretionary Housing Payment Fund. This is a fund administered by the local authority for those they consider in real need of additional help with their housing costs.
You can apply for a DHP when you receive your letter confirming your new award. We will send the letter to you in March 2013.
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