How Housing & Council Tax Benefit is Calculated and
Paid
The Housing & Council Tax
Benefit Calculation
In most cases if a claimant is in receipt of Income Support,
Income Based Job Seekers Allowance or the Guaranteed Element
of Pension Credit they will be entitled to Maximum Housing
& Council Tax Benefit minus any Non-Dependant deduction. For other incomes
the calculation is much more complex.
Housing & 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 Benfit that the person will receive, providing there
is no requirement for a Non-Dependant Deduction to be made.
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 will
commence on 7 April 2008.
The Local Housing Allowance (LHA) is the new name
for Housing Benefit for people living in the de-regulated private
rented sector and affects the way Housing Benefit is worked out and
how it is paid.
Tenants living in the following types of
accommodation will not be 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 will be 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 will be decided by
the rent officer and will be 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 will be
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 commences on 7 April 2008 and will
only apply 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 follow the link below:
http://www.lha-direct.org/
If you have any further queries please contact
the 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.
In all other cases, the first £6,000 of your capital is
ignored when assessing your entitlement. 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 £6,000.
How Benefit Is Paid
Payments of Housing Benefit are made four
weekly or calendar monthly 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 crossed
cheque. Where entitlement cannot be determined and the claimant has
provided all information that they are required, a payment on
account can be made. Any shortfall between the rental charge
and the Housing Benefit award should be paid by the
tenant. 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.
Allerdale Borough Council
