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New Claim: Housing Benefit

• Who can Claim Housing Benefit?.
• How Benefit is Paid.
• Documentary Evidence.
• Income Disregards.
• Non-dependant Deductions.
• Local Housing Allowance.
• Rent and Tenancy Details.
• How Tax Credits affect Benefit.
• How Pension Credits affect Benefit.
• Self-employed.
• Students.

Who can Claim Housing Benefit?
You can apply for Housing Benefit if you have capital/savings of £16,000 or less, or if you have more than this and are receiving Guarantee Pension Credit. Applicants who receive Income Support, Income Based Job Seekers Allowance or the Guarantee Pension Credit are entitled to maximum Housing Benefit. Applicants with all other types of income will have their claim assessed based on their income, savings and household members. It will be necessary to supply up-to-date proof of all income and savings to comply with Verification Framework. For couples, the total amount of savings/capital that the claimant and their partner have between them is taken into account. By partner we mean someone of the opposite sex you are married to or live with as if you were married; or a person of the same sex you have entered into a civil partnership with or live with as if you are civil partners.

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How Benefit is Paid
No matter what frequency you pay rent to your landlord Housing Benefit is normally paid two weeks in arrears to the claimant or four weeks in arrears if paid to the landlord.  Housing Benefit is normally paid directly to a claimants bank/building society account by BACS.  Where a person requests for Housing Benefit to be sent direct to the landlord, a form must be completed by the landlord to confirm their acceptance to receive the payments and repay any overpayment, should one occur. Online forms: Direct Payment to Landlord form.

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• Single Claimants: £5.00 can be deducted from weekly earnings
• Couples: £10.00 can be deducted from total weekly earnings
• Disabled/Long-Term Sick: £20.00 can be deducted from total weekly earnings
• Lone Parents: £25.00 can be deducted from weekly earnings
• Maintenance Payments: £15.00 can be deducted from the total weekly amount of maintenance payments received for dependant children

• Disability Living Allowance
• Attendance Allowance
• Mobility Allowance
• War Disablement Pension
• War Widows Pension

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• receiving Pension Credit, either Guarantee Credit, Savings Credit or both
• registered blind; or
• receiving the care component of the Disability Living Allowance at any rate;
• receiving Attendance Allowance;

• staying with the claimant but their normal home is elsewhere;
• receiving a Youth Training Allowance paid in connection with a Youth Training Scheme;
• a full-time student;
• aged 16 or 17 years;
• a prisoner;
• a hospital in-patient for more than 6 weeks;
• aged less than 25 years and receives Income Support or Income Based Job Seekers Allowance. As shown in the Non-dependant deductions table there is still no non-dependant deduction for Council Tax Benefit where the non dependant receives Income Support or Income Based Job Seekers Allowance, regardless of their age.

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In order to apply the correct Non-Dependant Deduction, Benefit Services will need proof of all the income of a Non-Dependant, including income received from savings. If no proof or inadequate proof of the Non-Dependant's income is provided, the highest deduction will be made. The following are accepted as sufficient proof :

Earnings from an employer (including Statutory Sick Pay and Statutory Maternity Pay) - last 5 consecutive payslips (if paid weekly), last 2 consecutive payslips (if paid monthly or four weekly) and last 6 consecutive payslips (if paid fortnightly). Handwritten payslips cannot be accepted and therefore, if printed payslips are not available, a certificate of earned income must be completed by the employer. This form is available from the link at the bottom of this page. Alternatively, contact Benefit Services at Ryedale House, either in person or by telephone to request the form. 

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Local Housing Allowance

Rent and Tenancy Details which Need to be Provided
In order to assess a claim for Housing Benefit, the applicant will need to provide the following information in connection with their claim :

• written confirmation of the actual date they moved into the property
• proof of the date the tenancy started (either a signed tenancy agreement or letter from the landlord)
• proof of the amount and frequency of the rent payable (either a signed tenancy agreement or letter from the landlord confirming the amount of rent payable and details of any services included in the rent such as heating, lighting, fuel for cooking, hot water, laundry, cleaning, gardening, water rates, meals etc)
• the name and address of the landlord
• details of all the rooms in the whole property, which rooms are for the tenant's sole use and which rooms he/she shares with someone else (other than members of their family)
• the type of property, e.g. detached/semi-detached/terraced house or bungalow, flat in a block/house/over a shop, caravan etc
• confirmation of whether the property has any of the following, central heating, a garden, parking space or garage

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Ineligible Service Charges
Housing Benefit cannot be paid in respect of service charges included in the rent such as fuel costs, laundry, cleaning, gardening, water rates and meals. Amounts for any ineligible service charges are deducted from the rent charged in the calculation of Housing Benefit and as a result, the remaining figure is the eligible rent. The eligible rent is the amount used in the calculation of the claim for Housing Benefit.

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How Tax Credits affect Housing/Council Tax Benefit
For Housing and Council Tax Benefit purposes, Working Tax Credits and Child Tax Credits are taken fully into account as income. However, arrears of Working Tax Credits and Child Tax Credits (which are paid as a lump sum) are treated as capital, not income and where the arrears are paid as a result of a change in circumstances, they can be disregarded for 52 weeks. Changes to the amounts of Tax Credits, following annual uprating, can be ignored for 30 weeks. If you are already receiving Housing and/or Council Tax Benefit or if you have recently made a claim, you should send any Tax Credit award letter you receive, to Benefit Services at Ryedale House, as soon as possible. To find out more about Tax Credits see - Benefits and bills.

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How Pension Credits affect Housing/Council Tax Benefit
People who receive the Guarantee Pension Credit will be entitled to maximum Housing and Council Tax Benefit. Where there is no entitlement to the Guarantee Pension Credit but there is entitlement to Savings Credit, Housing/Council Tax Benefit will be assessed in the normal way, based on all the income and savings. In the same way, a claim for Housing/Council Tax Benefit for a person aged 60 or over, who does not receive a Pension Credit, will be assessed under the normal rules, again, based on all the income and savings. To find out more about Pension Credits see - Benefits and bills.

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Self-employed
When a person states that they are self-employed, this is usually sufficient to accept that their income should be calculated as a self-employed person. However, in cases of doubt, it may be necessary for the person to provide documentation such as records of National Insurance contributions or tax records in order to establish whether they are employed or self-employed.

The period of trading used to calculate income in the assessment of Housing and/or Council Tax Benefit is usually the period of the last full year’s accounts. However, where a person has only just become self-employed and therefore, has not been trading for a full year, the income is calculated based on whatever information is available and Benefit Services will request further details after 3 months, 6 months, 9 months and a full year. Sometimes it is more appropriate to use a period of trading which is more representative of the current trading position or reflects fluctuations in business activity. In some cases, further information may be requested, for example, receipts, bank statements and invoices. A Self-employed Earnings Declaration Form is available from the Document Links at the foot of the page.

Benefit Services will calculate the net profit over the period of trading. There are only certain business expenses which can be deducted from the gross profit and these must be wholly and exclusively incurred with the purposes of the business - any expenses which are for personal/private use will not be allowed. Some examples of allowable expenses are given below:

• the repayment of capital on any loan used for replacing existing business assets such as tools, plant equipment or machinery or the repair of an existing business asset but only to the extent that no insurance policy covers the cost of repair;
• income spent on the repair of an existing business asset except to the extent that any sum is payable under an insurance policy for its repair;
• interest paid on loans, including hire purchase agreements taken out for business purposes;
• VAT paid in excess of VAT received;
• expenses that have to be met in order to conduct the business, including employees’ wages;
• proven bad debts (where default has occurred);
• advertising costs;
• telephone, telex, fax costs;
• legal/accountancy charges connected with the business;
• stationery;
• transport costs (not including petrol costs from home to work);
• rent, rates, water charges and insurance premiums on business premises.

The following expenditure items cannot be deducted from the gross profit:

• capital expenditure (expenditure on a capital item for example fixtures and fittings, vehicles etc);
• money used to set up or expand a business;
• depreciation or write-off of equipment etc;
• money spent on business entertainment or meals, including promotional events;
• compensation for losses incurred before the beginning of the assessment period or for other losses;
• losses suffered in running other businesses;
• domestic or personal expenses, such as drawings, and any expenses that are not essential in running the business, for example, personal use of a vehicle.

Once the net profit for benefit purposes has been established, the net income is calculated by deducting the following:

• notional tax;
• national insurance contributions (class 2 and/or 4);
• half of any contributions payable in respect of a retirement annuity contract or personal pension.

The net income figure is then converted to a weekly figure according to the period of trading used and this figure is used as weekly income in the benefit calculation. Many self-employed people draw money from their business for everyday living expenses.

These ‘drawings’ are not an allowable business expense. If the gross profit figure has been reduced by the amount of ‘drawings’, these will be added back to the gross profit. In the same way, where there is a loss and ‘drawings’ have been taken, these will be added back to the gross profit. Where ‘drawings’ are shown in the capital account, these are ignored.

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Self-employed Childminders:  Only one-third of the gross profit is used when calculating the income of self-employed childminders. No business expenses are deducted. Notional tax, national insurance contributions (class 2 and/or 4) and half of any contributions payable in respect of a retirement annuity contract or personal pension are deducted from the remaining one-third of the gross profit in the normal way.

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Self-employed Partnerships:  Income from self-employed partnerships is calculated according to how the share of profits has been calculated. Where there is a deed of partnership, this will contain details of this calculation and where there is no deed, the profits will be regarded as shared equally among the partners, unless there is any other express or implied agreement between them.

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Students who are Eligible to Claim Housing/Council Tax Benefit
Most students are excluded from being eligible to claim Housing/Council Tax Benefit. However, students who are in one of the prescribed vulnerable groups listed below eligible to make a claim.

• You are registered/certified blind.
• You have an invalid vehicle supplied by the NHS.
• You are a lone parent.
• You are aged 60 years or over.
• You are aged under 19 years and following a course of further (not higher) education, for example 'A' levels or similar.
• You are in receipt of a Disabled Students Allowance due to deafness.
• You and your partner are both students and receive Child Benefit for your children.
• You are single and responsible for a child boarded out by a local authority or voluntary organisation.
• You have had to interrupt your studies due to illness or caring responsibilities and are prevented by the educational establishment from returning to your studies - in this case you may claim from the date you recover or cease caring, until you return to your studies.

Partners of students who are students themselves able to make a claim for the couple and in this case, the non-student partner must make the claim.

Student grants and loans are taken into account as income. Grant income means any kind of educational award or grant, from whatever source, including a scholarship, studentship, exhibition, allowance, bursary, awards/grants from public funds and any assessed parental or spouse’s contribution whether or not it is actually paid. Student loans are taken fully into account as income for any student who is eligible to receive one, whether they choose to borrow a lesser amount than is available or indeed, whether they choose not to take out a loan at all. A weekly income disregard of £10.00 applies to loan income. A student may have several other sources of income which are treated in the normal way for Housing/Council Tax Benefit.

For Housing/Council Tax Benefit purposes, some of the elements included in a student's grant/loan are disregarded when calculating the income to be taken into account. These are as follows.

• Expenses for term-time residential study away from the student's educational establishment.
• 'Two Homes' grant - awarded where the student maintains a separate home because of the location of the course.
• Additions for a person residing outside the UK where the student's applicable amount does not account for that person.
• Free School Meals.
• Tuition/Exam Fees - this allowance is paid directly to the educational establishment.
• Loans to part-time students - up to £500.
• Disabled Students Grant.
• Hardship Fund payments.
• The Childcare Package.
• Books/Equipment (statutory amount - currently £370).
• Travel (statutory amount - currently £290).

A Student Details Form will need to be completed and proof of any student income will need to be supplied, for example, the grant/loan financial assessment. A Student Details form is available from the Document Links at the bottom of this page or you can contact Benefit Services at Ryedale House to request one.

If you are the only liable person for Council Tax and there are other adults living with you, you may be able to claim help with the Council Tax based on the income of the other adults (Second Adult Rebate) - see Benefits and bills for details on Second Adult Rebate (Alternative Council Tax Benefit).

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