Housing benefit changes and welfare reform
Over the past few years there have been a number of changes to the benefit system, including the introduction of universal credit, 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.
The benefit cap
The total amount of benefits that can be received by any individual or family living in Wales is capped at:
- £423.46 per week for single parents and couples with children
- £283.71 per week for single people
You won’t get anything above these limits, even if you’re assessed as needing more.
There are some exemptions, for example, if you or anyone else in your household qualifies for working tax credits, the benefits cap won’t apply.
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.
Find out more information about the benefit cap here.
The bedroom tax
If you rent your home from a community landlord, your housing benefit or universal credit housing costs will be reduced if the council decides your home is too big for your needs. This is sometimes called the ‘under-occupancy rule’ or ‘bedroom tax’.
The amount of the reduction depends on how many bedrooms you have that you 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.
See our page on the bedroom tax for more details.
Under 35s and the Shared Accommodation Rate
If your housing benefit or universal credit 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 25 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 aged between 16-34 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 monthly payment for people of working age who are either out of work or on a low income, and replaces other benefits including income-based jobseeker’s allowance, income support and housing benefit.
Under UC, payments of housing benefit are replaced by a ‘housing costs element’ included in your UC award. It is your responsibility to pay the rent to your landlord from this award.
Since 6 April 2017 UC has been limited to 2 children. This means that if you already had 2 children and were claiming UC before this date, you will not get any extra money for any subsequent children born on or after 6 April 2017. There are some exceptions, for example children from multiple births, or adopted children. See the Gov.UK guide for Universal Credit and families with more than 2 children.
For more information on UC, and to see if it will apply to you, click here.
What if I can’t pay the shortfall?
Many renters 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.