4. Amount of benefit

CPAG

The amount of housing benefit (HB) you get depends on the maximum rent the local authority is prepared to pay, and on your income compared with the amount the law says you need to live on. The amount you get may be reduced if your total income from benefits and tax credits is above a certain level (see here). To work out your HB, go through the following steps.

Step 1: capital

If your capital is over £16,000, you cannot get HB unless you are over pension age and get pension credit (PC) guarantee credit (see here). Some kinds of capital are ignored. For details, see CPAG’s Welfare Benefits and Tax Credits Handbook (for subscribers).

Step 2: maximum rent

There is a maximum amount of rent the local authority is prepared to cover. This might be less than the actual amount of rent you pay - eg, if you pay service charges that are not covered by HB (see below), or if your rent for HB purposes is reduced because you have a spare bedroom (see below).

HB does not cover some items included in rent, such as charges for:

•water or sewerage;

•fuel. Either the actual charge specified in the rental agreement or a fixed rate is deducted;

•meals. If these are included in your rent, the local authority may deduct a fixed rate;

•services. Some are included (eg, cleaning communal areas, provision of a laundry room and TV signal relay, including free-to-view TV but not an individual satellite dish or set-top box) and others are not – eg, sports facilities and TV rental.

See CPAG’s Welfare Benefits and Tax Credits Handbook (for subscribers) for details of the deductions.

If you rent from a private landlord (including a hall of residence), your HB is based on a ‘standard local housing allowance’ for the size of property that applies to you, even if your rent is higher than this amount. If your rent is lower, HB is based on the amount of your actual rent. Each local authority has its own rates for properties of different sizes. Check your local authority’s rates at .

Generally, unless you are a single person aged under 35, you are allowed one bedroom for:

•an adult couple;

•another single adult aged 16 or over;

•two children under 16 of the same sex;

•two children under 10;

•any other child.

You are allowed a maximum of four bedrooms. If you are a single person under 35, you usually only get a lower, shared-accommodation rate. If you are disabled and need overnight care, you may qualify for an additional bedroom for a carer. See CPAG’s Welfare Benefits and Tax Credits Handbook (for subscribers) for details.

If you rent from a local authority or housing association, your maximum rent is usually the same as the weekly rent due less any of the above ineligible charges. However, your HB is reduced if you are considered to have a spare bedroom (known as the ‘bedroom tax’). The rules about how many bedrooms you can have are similar to the local housing allowance rules, but see CPAG’s Welfare Benefits and Tax Credits Handbook (for subscribers) for more information. If you are considered to have one spare bedroom, your maximum rent is reduced by 14 per cent and by 25 per cent if you have two spare bedrooms. If your HB is reduced in this way, you should apply for a discretionary housing payment (DHP) from the local authority. The Scottish government has agreed to always make up HB reductions due to the bedroom tax by way of a DHP.

Discretionary housing payments

If your HB does not cover your full rent, you may be able to get a DHP from your local authority. These can be paid if you get HB and need additional help with your housing costs – eg, to make up the shortfall in rent due to HB being reduced because you have a spare bedroom, or because of financial hardship. They are usually awarded for a temporary period, beyond which you have to reapply.

Step 3: deductions for non-dependants

An amount is deducted from your maximum rent if you have a ‘non-dependant’ living with you.

A ‘non-dependant’ is someone, usually a friend or adult relative, who lives with you but not on a commercial basis. A deduction is made to reflect an assumed contribution from them to the household, whether or not they pay anything. There is no deduction for:1Regs 3 and 74 HB Regs

•a full-time student during the academic year (whether or not they work);

•a full-time student during the summer vacation (but there is a deduction if they start working 16 hours or more a week, unless their student support covers the summer vacation);

•a full-time student at any time if you or your partner have reached pension age;

•a joint occupier or joint tenant;

•a resident landlord;

•a sub-tenant;

•your partner or dependent child;

•anyone under 18;

•anyone under 25 if they get universal credit (UC), provided they do not have any earned income for UC purposes, or if they get income support (IS), income-based jobseeker’s allowance (JSA), income-related employment and support allowance (ESA) without a work-related activity component (or who is not in the ‘work-related activity group’) or support component (this usually only applies in the first 13 weeks of an ESA claim);

•someone who gets a youth training allowance;

•someone who normally lives elsewhere;

•someone in hospital for more than 52 weeks, or in prison;

•a live-in paid carer from a voluntary organisation;

•someone on PC.

No deductions are made for your non-dependants if you or your partner are registered blind, get the disability living allowance care component, personal independence payment (PIP)/adult disability payment daily living component or attendance allowance.

For anyone else, fixed deductions are made based on the non-dependant’s income. See CPAG’s Welfare Benefits and Tax Credits Handbook (for subscribers) for details and amounts. Note: if your non-dependant is working, you should provide the local authority with evidence of their gross income. If you do not, the local authority may make the highest deduction.

If you or your partner have reached pension age and do not get IS, income-based JSA, income-related ESA or UC, the deduction is not made until 26 weeks after the non-dependant moves in with you. Likewise, if their income goes up, increasing the deduction, the increased deduction does not take effect for 26 weeks.

1 Regs 3 and 74 HB Regs »

Step 4: getting a means-tested benefit

If you get UC, IS, income-based JSA, income-related ESA or PC, HB is the amount worked out at Step 3 – ie, your maximum rent less any amount for non-dependants. In this case, you do not need to continue with the rest of these steps.

Step 5: not getting a means-tested benefit

If you do not get UC, IS, income-based JSA, income-related ESA or PC, you must compare your income with your weekly needs.

Step 6: work out your applicable amount

This is an amount for your basic weekly needs. It is made up of:

•personal allowances;

•premiums;

•a work-related activity or support component if you have limited capability for work.

The applicable amount includes amounts for yourself and for your partner, if you have one. It also includes amounts for any dependent children. The amounts for HB are the same as for IS (see here), but with the following differences. The following rates are from April 2024.

•Personal allowance:

◦a child allowance is included in HB if you have any dependent children;

◦single people under 25 and lone parents under 18 who are entitled to main phase ESA get £90.50 ;

◦young couples get £142.25, unless both are under 18 and the claimant is not entitled to main phase ESA (see here), in which case they get £108.30;

◦single people have a personal allowance of £235.20 if they have reached pension age (£218.15 if they reached pension age on or after 1 April 2021) (see here);

◦couples get £352.00 if one or both has reached pension age (£332.95 if they both reached pension age on or after 1 April 2021) (see here), and they do not get IS, income-based JSA, income-related ESA or UC.

•Premiums:

◦a family premium is included in your HB if you already have an existing claim which includes a child. It is not included in an existing claim if you later have a child, or in new claims from 1 May 2016;

◦a disabled child premium and enhanced disability premium for a child are included in HB;

◦you do not get a disability premium if you have been assessed as having limited capability for work for ESA and you (ie, not your partner) are the HB claimant.

•Components:

◦instead of a disability premium, a work-related activity component of £35.95 is included if you claimed ESA before 3 April 2017 and have limited capability for work, or a support component of £47.70 is included if you have limited capability for work-related activity (see here).

Step 7: work out your weekly income

Chapter 16 explains how your loan, grant or other income is taken into account and how to work out your weekly income.

Step 8: calculate your housing benefit

If your income is less than or the same as your applicable amount, HB is the amount worked out at Step 3 – ie, your maximum rent less any amounts for non-dependants.

If your income is more than your applicable amount, work out 65 per cent of the difference. Your HB is the amount worked out at Step 3 (ie, your maximum rent less any amounts for non-dependants) minus 65 per cent of the difference between your income and applicable amount.

Example

Maria is 25 and studying full time for a National Certificate in animal care. She gets ADP standard rate mobility component and HB. She continues to be eligible for HB as a student because she can get a disability premium in her HB. Her course lasts for one year (40 weeks in total). She shares a private-rented flat with a friend. They each pay £85 a week rent. She has a bursary maintenance allowance of £5,022 per year. She works part time and earns £50 a week. The local housing allowance shared-accommodation rate in her area is £82.85 a week (her maximum rent for HB).

Step	Calculation
Maximum rent	£82.85
Applicable amount (£90.50 + £42.50 disability premium)	£133.00
Income (bursary - £125.55 x 40 weeks)	£5,022
Less (books and equipment)	£390.00
Less (travel)	£303.00
Equals	£4,329
Divided by 40 weeks for weekly income	£108.23
Add earnings £30 (£50 - £20 earnings disregard)	£138.23
Subtract applicable amount from income (£138.23 - £133.00)	£5.23
Calculate 65 per cent of the difference	£3.40
Deduct from maximum rent (£82.85) to give weekly HB	£79.45

Maria can get HB of £79.45 a week during her course. She needs to pay the shortfall in her rent of £5.55 a week from her income.

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