Housing benefit: How does it work?

Letter box
Image caption Quite a lot of paperwork is involved in claiming housing benefit

Housing benefit is an important means-tested benefit for people on low incomes which helps them to pay their rent.

That can be rent paid to a council, housing association or a private landlord.

The rules are set by the government and the benefit itself is administered by local councils.

The rules changed on 1 April 2011 and there are more changes in the pipeline.

Who is housing benefit aimed at?

Those who struggle to pay their rent because they have a low income are the target of housing benefit.

It does not matter if these people are earning a wage or not, but their income and their savings are relevant.

People can get help for many different types of accommodation, such as furnished or unfurnished flats, bedsits, rented houses or hostels or lodgings, as long as they pay rent to a landlord or landlady.

But they cannot get the benefit to buy a home, for mortgage payments, or for day-to-day living expenses.

Some service costs are covered by the benefit, but water and heating bills are not.

How do I know if I am eligible and how is it calculated?

This is quite complicated but there is help available from local councils.

Generally, those with low incomes, and also savings below £16,000 a year, can claim.

The amount they receive depends on various factors.

So, local authorities will calculate so-called eligible rent by considering income, age, the size of family and disabilities of people living in a council property.

This means people must keep the council up to date with any change of circumstances.

Housing benefit is often connected with other benefits - many claim together with benefits such as Income Support - and it depends on income, as well as levels of savings and investments.

Those not on other benefits can fill in a claim form.

An online benefits calculator can help estimate how much a claimant might be due.

Perhaps it is easier to say who does not get it?

Indeed. Those who have savings of more than £16,000 are not eligible, unless they are also receiving the guarantee credit part of Pensions Credit.

Most full-time students, those who live in the home of a close relative, and asylum seekers are also blocked from the benefit.

Only one of a couple living together can claim.

And single people aged under 25 can only get the benefit for a bedsit or a room in shared accommodation, although this is set to change to people aged under 35.

How is it paid?

Council tenants will have it paid straight into their rent accounts.

Private tenants will usually be paid by cheque or by direct debit into a bank or building society account.

Claims can be submitted 13 weeks before moving in, or 17 weeks for those aged 60 and over. Sometimes it can be backdated.

What are the changes that have caused a political rumpus?

The coalition government cut the value of new housing benefit claims from 1 April 2011.

These new upper limits now range from £250 a week for those in a one-bedroom property to £400 a week for those in a four-bedroom property, which is the new maximum payment.

The Local Housing Allowance is based on the 30th percentile of local rented accommodation, so only 30% of all rented property on the market will cost less and 70% will cost more than housing benefit payments.

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