HOUSING BENEFIT,
LOCAL HOUSING ALLOWANCE
&
COUNCIL TAX REDUCTION
Objectives
When you are finished this unit you should:
1. Be able to identify who may be entitled to
Housing Benefit (HB) Local Housing allowance
(LHA) and Council Tax Reduction (CTR)
2. Be able to calculate HB and CTR using the
calculation sheets and/or the quick benefit
calculator
Types of Housing Benefit
• People on Income Support or Income Based
Jobseekers Allowance AND income related ESA
will have 100% of HB calculated on their eligible
rent less deductions for any non-dependants and
under-occupancy (bedroom tax)
• People not on income based benefits will have
theirs calculated on the basis of their eligible rent,
deductions for any non-dependants living in the
house and their income
Calculating HB & CTR
• The calculation is done by comparing applicable
amount with income
• Applicable amount- This is the amount the
government states that you can live on each
week depending on your circumstances
• If Income is less or equal to the applicable
amount maximum housing benefit is paid. This is
100% of eligible rent minus any deductions for
non-dependants or under-occupancy (bedroom
tax)
• If income is greater than the applicable amount
the difference is calculated and 65% of this figure
is then taken from the maximum Housing Benefit,
20% from CTR
Who can claim
Claimants can be anyone who:
1.
2.
3.
Are responsible for paying housing costs for
example rent or lodgings
Occupy a dwelling as their home such as
tenants or lodgers
Have capital below £16000 or in receipt of
Pension Guarantee Credit
Items Not Counted As Rent
Items not counted as rent for example - charges
for fuel, heating, lighting, hot water, water charges
or charges for meals will be deducted from the
payment before HB is calculated on the remainder
of the eligible rent
Rent Restrictions
• A rent restriction is applied if the rent is deemed
too high or the property too large
• Under occupancy applies from April 2013 14%
reduction if one bedroom over two or more lose
25% of HB if under pension age
Non-Dependants
• A Non-Dependant is anyone staying in the home
over the age of 18
• Claimants or their partners who are blind or
receiving Disability Living Allowance care
component (any rate) or Attendance Allowance
will have no non-dependant deductions made
Payments for non-dependants
working 16 hours or more per week
18+ less than £136.00
18+ £136 to £199.99
18+ £200 to £258.99
18+ £259 to £345.99
18+ £346 to £429.99
18+ £430 or more
£14.80
£34.00
£46.65
£76.35
£86.95
£95.45
Non-Dependants not working or
working less than 16 hrs per week
• 18+ not on IS/ibJSA (or a government training
scheme other than YT) £14.80
• 25+ and on IS or ibJSA £14.80
• 25+ and entitled to universal credit
• There is no non-dep deductions for anyone under
the age of 25 on IS/ibJSA or 16/17 years old
• Full time students (except in the summer
holidays if they work)
Problem Areas
• Claiming /Starting dates
• Two different forms, one for Local Authority
Housing and one for Private landlords/Registered
Social Landlords
Rent Restrictions (cont)
• The local authority, not the rent officer, will
determine rent for an exempted property
• Claimants whose rent is restricted will find that
their LHA does not meet their housing costs. If
they cannot negotiate a lower rent, they will have
to pay the difference themselves
Backdating Claims
• In “exceptional circumstances” where a claimant
can show good cause a claim MAY be backdated
for up to 6 months
• Pension credit claimants 3 months good cause
need not be shown
• Good cause has it’s own legal meaning and it is
extremely difficult to get backdated payments
Discretionary Housing Payment
Local Authorities have the discretion to make
additional payments if they believe someone
needs further financial assistance with their
housing costs (either rent or council tax). Local
authorities do not have to make these
payments and a refusal cannot be taken to
appeal
Appealing a HB,LHA or CTR
Appealing a benefit decision on HB,LHA or CTR is
similar to appealing other welfare benefits. Your
client should ask for a written explanation of the
decision. The client has 1 month to appeal against
the decision giving reasons why they disagree.
Any time taken by the local authority to reply to
any request for a written decision is not counted in
the 1 month period
COUNCIL TAX
• Council tax is a domestic property based tax paid
to the local authority to help pay for the services
they provide
• Some dwellings are exempt from council tax
these exemptions are available on Advisernet but
some examples are as follows
Exemptions
• Severe Mental Impairment
• Properties left empty (unfurnished and
unoccupied) for up to 6 months
• Properties left empty by certain groups (for
example, prisoners or people in care)
• Properties occupied by certain groups of people
such as students or people under the age of 18
Water and Sewerage
• In Scotland water and sewerage is included in
the council tax bill. These will also vary according
to the band
• Everyone needs to pay water and sewerage
regardless if they are on council tax reduction or
not unless they are exempt
• Water sewage goes from Band A- £5.05pwk to
Band D £7.56 pwk
Reductions for Council Tax
• Council Tax Reduction
• Reduction for disabled people
• If only 1 person living in the property a 25%
discount applies
• Second adult rebate
• Property both unoccupied and unfurnished
Second Adult Rebate
A liable person may claim second adult rebate
as an ALTERNATIVE to main CTR it may be
applicable if the other person who is not jointly
and severally liable living with them, and that
person is on a low income or benefit and does
not pay rent
Calculating SAR
• 2ND Adult (or all 2nd adults) on IS/ibJSA - 25% of
CT
• 2nd Adult total gross income under £196.00 - 15%
of CT
• £196.00 or over a week but not over £254.99 per
week -7.5% of CT
• £255 per week or more - Nil
Council Tax Reduction (CTR)
• Entitlement to CTR is based on the claimants
circumstances including
• The amount of council tax they have to pay after
any discount or reduction has been made
• Any non-dep living in the house
• The applicable amount
• Income
• Assumed income from capital
Who Can Claim
• Claimants can be people who
• Are liable to pay council tax for a house in which
they live
• Have no more than £16000 in savings
• On Guarantee element of Pension Credit no
savings limit.
Calculation
• People on IS or ibJSA will get 100% of weekly
liability less any deduction for a non-dependant
• People not on IS or ibJSA will have their benefit
calculated on the basis of their Council Tax minus
any band reductions, deductions for non-deps
living in the house and their income
• There is NO benefit for water & sewerage
Types of Non- Dependants
• Non Dependants in work of 16 + hours
• 18+ less than £200.00
£3.95
• 18+ £200 to £345.99
£7.85
• 18+ £346 to £429.99
£9.95
• £430 OR MORE
£11.90
• Not working or working less than 16 hrs
• 18+ not on IS/ibJSA (or on a government training
scheme)
£3.95
• Under 25 on IS/ibJSA
NIL
Non-Dependent Deduction
As in Housing Benefit there is no nondependent deduction for claimants or their
partners who are blind, receive the care
component of Disability Living Allowance or
Attendance Allowance
Calculation
• Like HB the reduction is worked out by
comparing income levels with the applicable
amount. If the income is less than or equal to the
applicable amount maximum CTR is payable
• If income is greater than applicable amount the
CTR is the maximum benefit less 20% of the
difference between the income and the
applicable amount