How is Housing Benefit calculated?
Housing Benefit is paid by local councils to help people pay their rent.
The rules about how much Housing Benefit you may get are complicated. Eligibility for Housing Benefit is decided by looking at your rent, income and capital. The amount you will get will be the maximum rent that can be paid for your home, minus the amount that the UK Government calculation claims that you can afford to pay.
Please note that this page looks at the rules for council and housing association tenants. If you rent from a private landlord, local housing allowance rules usually apply.
How much can you afford to pay?
There are specific rules that the council have to look at when they are deciding how much you should be able to pay towards your rent.
They should first look at how much money your household needs to live on each week, taking into account:
- the number of people in your house
- the ages of the people in your house
- anyone in the house is sick or disabled
- whether anyone is a full-time carer.
They will then look at how much money there is coming in. This can include:
- benefits and tax credits
- maintenance payments
- grants, bursaries and student loans.
Savings and investments
If you have any savings or investments these can be counted as income too. This includes redundancy payments. The rules for the assessment of savings are different for ‘working age’ (under pensionable age) claims and ‘pension age’ claims:
Working age (under pensionable age)
If you have savings of £16,000 or more you will not be entitled to any Housing Benefit. If you have savings of over £6,000 this will affect the amount of Housing Benefit you will get.
If you get the means tested Pension Credit then there is no upper capital limit. Otherwise the upper capital limit is £16,000. If you don’t get the means tested Pension Credit, the first £10,000 of capital is ignored and thereafter income is calculated at £1 for every £500 band of capital up to £16,000.
From April 2010 the pensionable age for women will be gradually raised, ending in April 2020 when the pensionable age for both men and women will be equal at 65. Use the state pension age calculator on the Directgov website to work out when you will be of pensionable age.
The maximum rent that can be paid for your home
Housing benefit calculations are based on the rent and other charges you pay to your landlord. Not all types of charges are counted, and some may be limited.
To work out the amount of rent you can get help with – your ‘eligible rent’ – the council looks at the amount of rent you pay, but this is reduced if:
- you pay service charges or other charges in with your rent
- you have other adults living with you who could contribute to the rent (known as ‘non-dependents’)
- your home is considered too large for your needs.
Service charges that cannot be paid by Housing Benefit
There are some service charges that may be included in your rent charge that cannot be paid by Housing Benefit. Service charges that cannot be paid by Housing Benefit can include:
- provision of meals
- personal laundry service
- personal alarm system
- personal support and care
- water rates included in your rent (if you are a Council or Housing Association tenant)
- most fuel charges.
Your Housing Benefit may be reduced if you have someone living in your house who is:
- not your husband, wife, civil partner or partner (including same sex partners), and
- someone you do not claim Child Benefit for, and
- over the age of 18.
It is assumed that these people can pay something towards your rent, whether they actually do or not.
The reduction of your Housing Benefit will depend on the other person’s gross income. If they are not willing to give their income details to you, ask them to contact the Housing Benefit department directly. If no income details are given there is a risk that the Housing Benefit department may simply deduct the maximum amount from your benefit. If you are in this situation, seek advice.
No deduction will be made if:
- you, or your partner, are registered blind
- you, or your partner, receive Attendance Allowance or the care component of Disability Living Allowance
- you, or your partner, receive the daily living component of Personal Independence Payment
- the person living with you is a full-time student (unless they have full-time work during the holidays)
- the person living with you is under 25 and receiving Income based Jobseeker’s Allowance, Income Support, Employment Support Allowance (Income Related) or Universal Credit
- the person living with you is receiving Pension Credit, or
- the person living with you is in prison or has been in hospital for 52 weeks or more.
The benefit cap
There is a maximum amount of combined benefit that your household can claim if you are of working age. This is known as the ‘benefit cap‘ and includes housing benefit. Where your benefits total more than the cap amount, your housing benefit will be reduced.
The benefit cap does not apply to people of pension age.
Help and advice
If you do not know how much Housing Benefit you will get, or you are already claiming Housing Benefit and are not sure if you are getting the right amount, it would be a good idea to contact an adviser who may be able to tell you how much you should get.
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.