Housing benefit changes and welfare reform
Over the past few years there have been a number of changes to the benefit system, including the bedroom tax and the benefit cap. These changes may have affected the amount of help you get to pay your rent.
You will need to make up any shortfall in your rent from your other income or savings.
For a summary of the changes see our fact sheet.
The benefit cap
In Wales, from 7th November 2016, the total amount of benefits that can be received by any individual or family is capped at:
- £384.62 per week for single parents and couples with children (£20,000 per year)
- £257.69 per week for single people (£13,400 per year).
You won’t get anything above these limits, even if you’re assessed as needing more. There are some exemptions, however. For example, if you or anyone else in your household qualifies for working tax credits, the benefits cap won’t apply to you.
You are most likely to be affected by the benefit cap if you have a large family, particularly if you live in an area with high rents and you need a large home because of the number of children you have.
More information on the benefit cap
The bedroom tax
Since April 2013, council tenants and housing association tenants have had their housing benefit entitlement reduced if the council decides their home is too big for their needs. This is sometimes called the ‘under-occupancy rule’ or ‘bedroom tax’.
The amount of the reduction increases depending upon how many bedrooms the claimant has that they do not need and could be as much as a 25% deduction.
The size of the home you can rent without being affected by this cut will be:
- one bedroom for a couple
- one bedroom for a person aged 16 or over
- one bedroom for two children aged under 16 of the same sex
- one bedroom for two children aged under 10 (boys and girls are expected to share a room)
- one extra bedroom if you or your partner needs an overnight carer to stay.
The ‘bedroom tax’ will apply to council and housing association tenants of ‘working age’. At present, ‘working age’ people become ‘pension age’ people when they reach the state retirement age for women. This is increasing from 60 to 65 between April 2010 and April 2020.
See our page on the bedroom tax for more details.
Under 35s and the Shared Accommodation Rate
If your housing benefit claim falls under the local housing allowance rules and you are under 35, single and childless the amount of help you can get with paying your rent will be limited.
You are generally only entitled to the standard rate for a single bedroom in shared accommodation (the ‘shared accommodation rate’). This is lower than the rate for a one bedroom property and applies even if you cannot find shared accommodation in your area and are living alone.
There are some circumstances where the shared accommodation rate does not apply even if you are under 35. These include:
- you are under the age of 22 and have been in care since the age of 16
- you are severely disabled (qualifying for a severe disability premium)
- you need overnight care
- you are 25 or over and have lived in a homeless hostel for 3 months and received resettlement or rehabilitation support during that time
- you are 25 or over, an ex-offender and your housing has been arranged under a multi-agency (MAPPA) agreement
- you share with another adult who is a member of your family (known as a non-dependant).
Universal credit (UC) is a new monthly benefit for people of working age who are either out of work or on a low income, and will eventually replace some benefits including income-based jobseeker’s allowance, income support and housing benefit.
Under UC, payments of housing benefit for new single claimants will be replaced by a ‘housing costs element’ included in their UC award. It will be the claimant’s responsibility to pay the rent to their landlord from this award.
UC is being introduced in stages across the UK. Single jobseekers can claim UC in any Jobcentre in Great Britain. If you live with your partner, or have children, you will only be able to claim UC in certain areas. To find out if you can claim UC, click here.
From 6 April 2017 UC will be limited to 2 children. This means that if you are already claiming UC and have 2 children you will not get any extra money for any subsequent children born on or after 6 April. If you are claiming UC for the first time after 6 April and have more than 2 children, you will be told to claim tax credits and housing benefit instead. See the Gov.UK guide for Universal Credit and families with more than 2 children.
From the 1st April 2017, if you are aged between 18 and 21 years, you may not be entitled to housing costs in your UC claim unless you:
- are responsible for one or more children;
- fall into certain ‘vulnerable groups’, for example, you receive certain disability benefits; are in temporary homelessness accommodation provided by the council, or have been a victim of domestic violence; or
- have been assessed as expected to work less than 35 hours per week due to caring responsibilities or physical
or mental ill health.
There are certain other exemptions, so if you think you might not be entitled to housing costs in your UC, get advice.
For more information on Universal Credit, and to see if it will apply to you, click here.
What if I can’t pay the shortfall?
Many tenants are struggling as a result of these changes. It could be difficult to make up the shortfall between the reduced amount of benefit you receive, and the rent you have to pay. If you are in this situation, you will need to take action to avoid rent arrears and the risk of eviction. It may be possible to:
- talk to your landlord to see if they will consider reducing the rent
- apply for a discretionary housing payment (DHP) to help make up the shortfall
- ask non-dependants to increase their contributions to the rent.
To find your local council and how to claim a DHP in your area, enter your postcode in the box below and click the find button.
If you do not know your postcode, click here.
If you are worried about not being able to afford your rent then get advice as soon as possible. Call Shelter Cymru’s expert housing advice helpline on 0345 075 5005. You could also email our housing advice team, or, if you prefer, visit advice near you to find a local Shelter Cymru advice surgery where you can talk to someone in person.
Will I have to move?
If you cannot afford to pay the shortfall you may have to consider moving to a more affordable home.
There is a benefits checker on the Turn2Us website which can help you find out how you will be affected and help you decide whether you will be able to continue to afford to pay for your home. Note that you will need to have information about your income and outgoings to hand to answer the questions you will be asked. You should answer fully to get a real picture of how you will be affected and if you are still unclear you should seek further advice as soon as possible.
You could find that moving to a more affordable property may be the only way to ensure that your rent is affordable in the long-term. This may even involve moving to a cheaper area.
Make sure you allow plenty of time to move, particularly if you are looking for somewhere adapted for use by a disabled person. A lot of people may have to move because of these changes, so there could be less choice available.