How benefit is calculated and paid
The benefit calculation
In most cases if a claimant is in receipt of Income Support,
income based Jobseekers Allowance or the Guaranteed Element of
Pension Credit they will be entitled to Maximum
Housing and Council Tax Benefit minus any non-dependant deduction. For other incomes
the calculation is much more complex.
Housing and Council Tax Benefit is calculated on what is
known as the Applicable Amount. This is an amount set by the
Government, which states how much a person needs to live on per
week depending on their circumstances, for example, the number
of people in their household, their age etc. For every
£1 that a person's income exceeds their Applicable Amount, 65 pence
is deducted from the maximum Housing Benefit entitlement for that
week and 20 pence is deducted from the maximum Council Tax
Benefit entitlement for that week. The resulting sum is the
amount of benefit that the person will receive, providing
there is no requirement for a non-dependant deduction to be made.
Please follow this link to the Housing and
Council Tax Benefit calculator if you would like an estimate of
your Housing and Council Tax Benefit entitlement.
Your rent may be restricted
The rent eligible for Housing Benefit is not always the same as
the rent being charged for the property and therefore, even if the
claimant is in receipt of Income Support or has a low wage, there
is no guarantee that all the rent will be met by housing benefit.
Where the full rent cannot be met by Housing Benefit, the tenant is
responsible for paying the difference to the landlord. In most
cases rents charged by landlords are referred to the The Rent Service.
Local Housing Allowance
In October 2002 the Government announced a program of reform to
Housing Benefit, which included a new scheme called the Local
Housing Allowance. The new scheme commenced on 7 April
2008.
The Local Housing Allowance (LHA) is the new name
for Housing Benefit for people living in the private rented
sector and affects the way benefit is worked out and how it is
paid.
Tenants living in the following types of
accommodation are not affected by the scheme:
- Tenancies provided by a registered social
landlord (housing associations)
- Supported tenancies provided by certain
authorities, social landlords, charities and voluntary
organisations
- Tenancies which commenced prior to 1989
- Hostels
- Caravans, houseboats and mobile homes
- Tenancies where the rent officer judges that a
large part of the rent is for board and attendance.
These tenants will continue to have their benefit calculated
under existing rules.
The Local Housing Allowance is based on rent levels for the area
in which a person lives and the number of people living with them.
The Local Housing Allowance rates are decided by the rent
officer and published monthly by the Council so that new
claimants and claimants moving house will know in advance the rate
of Local Housing Allowance on which their benefit will be
based.
In most cases the Local Housing Allowance is
paid to the tenant, usually into a bank account. You can get
advice about opening a bank account from any bank or building
society. However, where the tenant can prove that they will
struggle with the responsibility of making rent payments to their
landlord, the Council will help the tenant to make other
arrangements.
The scheme commenced on 7 April 2008 and only
applies to new claimants, existing claimants who change address and
claimants who reclaim after a break in entitlement.
For confirmation of the maximum amount of
Local Housing Allowance that you can receive in your area,
please see visit the LHA
website.
If you have any further queries please contact
the Council's Benefit Section on: 01900 702650.
How capital affects your benefit entitlement
Generally speaking you will not be entitled to benefit if you
have savings over £16,000, unless you are in receipt of the
Guaranteed Element of Pension Credit.
If you are under 60 years of age, £1 will
be added to your weekly household income for every
£250 that your capital exceeds £6,000. If you
are over 60 years of age, £1 will be
added to your weekly household income but only for every
£500 that your capital exceeds £10,000.
How Housing Benefit is paid
Payments of Housing Benefit are made every four week or
every calendar month in arrears depending upon the frequency that
the rent is charged. Where tenants request that payments are sent
direct to the landlord, the Council will issue notification letters
to the landlord informing them of their tenant's benefit
entitlement. Payment is made by electronic transfer.
Where entitlement cannot be determined and the claimant has
provided all information that they are required to, a payment on
account can be made. Any shortfall between the rental charge
and the Housing Benefit award should be paid by the tenant.
How Local Housing Allowance is paid
Local Housing Allowance is paid four weekly or
calendar monthly in arrears depending upon the frequency that the
rent is charged. In most cases Local Housing Allowance will be paid
by BACS directly into a tenant's bank or building society
account, however in cases where a tenant can prove that they
would struggle with the responsibility of paying their rent the
Council can help to make other arrangements.
How Council Tax Benefit is paid
Council Tax Benefit is paid by crediting the Council Tax account
with the years benefit entitlement, a Council Tax Demand (bill) is
issued for any shortfall
Important notes
Neither tenant or landlord should make any assumptions about
whether benefit will be awarded, or the amount that might be
paid. Only an official notification letter confirms
entitlement.
The Council is committed to making sure that only claimants
entitled to benefit actually receive a payment. Benefit will
therefore only be paid where the Council is satisfied with the
validity of the claim. Details of claims are confidential. The
Council is limited in the amount of information it can disclose to
third parties such as landlords.
Other money you may be entitled to
For information on other money that you may be
entitled to please visit www.turn2us.org.uk
Turn2us is an organisation that
helps people in financial need maximise their income by
accessing the money available to them through welfare
benefits, grants and other financial aid.