How Housing Benefit is calculated
Last Updated: 23 August 2023
The amount of Housing Benefit you receive depends on four things:
- the amount of your savings
- how much money you have coming in (your income)
- your personal circumstances, including:
- your age
- whether you have a partner
- how many children you have
- whether you are disabled
- whether you have other people living with you who do not depend on you for support
- the amount of your rent
We will then compare the money you have coming in each week with the amount of money the Government says you need to live on each week. This is called the applicable amount and varies according to individual needs.
Applicable amounts 2020 to 2021
If you are on Income Support, Job Seekers Allowance (Income Based), Guarantee Pension Credit or Employment and Support Allowance (income related), or if your income is below the applicable amount it is likely that you will receive 100% Benefit on your eligible rent.
The rent that can be used in the calculation may be lower than the rent you are charged. Further information is available regarding Housing Benefit for private tenants.
If your income is above the applicable amount then you will have to pay:
- 65p per week rent for every £1 of your income that is above the applicable amount
- 20p per week Council Tax for every £1 of your income that is above the applicable amount
Housing Association tenant claims
If you rent from a Housing Association your benefit will normally be calculated using your full rent charge, unless you have services included in your rent such as care and support, heating, lighting etc.
If you are working age (under the age to claim State Pension Credit) and you have more bedrooms than you need, the rent used to calculate your Housing Benefit will be reduced by 14% if you have one extra bedroom too many or 25% if you have two or more extra bedrooms. The number of bedrooms you are allowed are the same as for private tenants.
Private tenant claims
If you pay rent to a private landlord it will be necessary for you to provide proof of your rent and to show that you have entered into a legally binding agreement with your landlord. We will be checking this carefully and will need to see your original tenancy agreement and/or rent card.
If the arrangements with your landlord are not on a proper commercial basis or we feel that you and your landlord have created an arrangement to take advantage of the Housing Benefit scheme you will not be entitled to Benefit.
You will not be entitled to Housing Benefit if you:
- rent a former joint home from your ex-partner
- are responsible for a child of your landlord
- rent your accommodation from a company of which you are a director or employee
- rent your home from a trust of which you are a trustee or beneficiary
- rent your accommodation from a trust of which your child is a beneficiary
- rent specific accommodation as a condition of your employment
- live with your landlord, who is a close relative
Service charges
Heating, lighting, hot water, cooking, water charges and meals etc
On the application form you are required to show whether your rent includes any of the above charges. If your Housing Benefit is assessed using the rules in place prior to 7 April 2008 the Housing Benefit scheme does not cover these items and the Rent Officer will decide how much will be deducted from your rent for these charges irrespective of the amount you actually pay. You must pay the difference to your landlord.
Savings
Savings include:
- money in Banks and Building Societies, for example ISAs, TESSAs and PEPs, stocks and shares, premium bonds and national savings certificates
- any cash you hold
The value of any property you own but do not live in and any land you own will normally need to be included.
If we find that you have disposed of some or all of your capital with the intention of increasing your entitlement to Housing Benefit and/or help under the Council Tax Reduction Scheme the amount you disposed of will still be used to calculate your entitlement.
How savings are worked out
Savings are worked out differently for two categories of claimant:
Scheme for those who have reached the qualifying age to claim Pension Credit
Your savings will be added together with those of your partner (if applicable). If you and your partner have combined savings of over £16,000 you will not be entitled to Housing Benefit of a Council Tax Reduction unless you are in receipt of Guarantee Pension Credit.
If you have savings of less than £10,000 these will not be counted when calculating your entitlement. However you must still provide full details of these amounts.
If you have savings between £10,000 and £16,000 it will be assumed you have an income of £1 per week for every £500 (or part of £500) above £10,000.
This means that if you have savings of £12,100 it is assumed you have an income of £5 per week.
Scheme for those who have not reached the qualifying age to claim Pension Credit
Your savings will be added together with those of your partner (if applicable). If you and your partner have combined savings of over £16,000 you will not be entitled to any Housing Benefit or Council Tax Reduction.
If you have savings of less than £6,000 these will not be counted when calculating your entitlement. However you must still provide details of these amounts.
If you have savings between £6,000 and £16,000 it will be assumed you have an income of £1 per week for every £250 (or part of £250) above £6,000. This means that if you have savings of £8,100 it is assumed you have an income of £9 per week.
Income
How income is worked out
To work out your total income we add together any earnings, any other unearned income you have coming in together with income from your savings.
Earnings include your take home pay or if you are self-employed your business profits after any allowable expenses are taken off.
You will need to provide details of your income and can do this as follows:
- provide your original payslips (not photocopies). If you are paid weekly you should provide your last five payslips or if you are paid monthly you should provide your last two monthly payslips, or
- ask us to send an earnings certificate to your employer which he/she will be asked to complete detailing your earnings, or
- provide your latest set of trading accounts if you are self-employed. If you wish to claim but have no accounts please ask us to send you a questionnaire for completion. You will be asked about the income and expenses of your businesses and you must be able to show that you are maintaining adequate accounting procedures
You do not need to wait until you have all the payslips before sending in your claim form. The form should be sent in straight away to ensure you receive Benefit from the following Monday. The missing information can be sent in up to one calendar month later.
Disregarded earnings
Some of your earnings are not included in the calculation:
| Claimant | Amount of disregarded earning (per week) |
|---|---|
| Single person | £5* |
| Couple | £10* |
| Single parent | £25* |
|
Certain disabled claimants, carers or certain specialist groups (part-time fire fighters and reservists) |
£20* |
|
In some circumstances, working at least 16 hours means an additional disregard is also used |
£17.10 |
|
Childcare costs can be disregarded in some circumstances, in addition to the standard earnings disregards and additional earnings disregard |
Up to £175 for one child Up to £300 for two or more children |
Unearned income
Unearned income is money you receive which is not from employment.
This includes retirement pension, occupational pension (less tax) and all Social Security Benefits.
Some benefits and payments are not included as income in the assessment of your entitlement. You must still notify us if you have any of these payments as they can affect your claim in other ways.
| Income | Amount disregarded per week |
|---|---|
| War Pensions, War Widow's Pensions, Armed Forces Compensation Scheme Payments | 100% of the payment |
| Disability Living Allowance/Personal Independence Payments/Attendance Allowance | 100% of the payment |
| Widowed Parent's Allowance/Widowed Mother's Allowance | £15 |
| Child Benefit | 100% of the payment |
| Maintenance payments in respect of a child | 100% of the payment |
| Maintenance payments in respect of an adult | £15 |
Further information is available about claiming Housing Benefit. This includes how to make a claim, backdating a claim, change in circumstances and the appeals process.