There are a number of reasons why Housing Benefit does not cover the full rent as a result of the various welfare reforms since 2010. These include
- Bedroom Tax
- Benefit cap
- Local Housing Allowance rates (see below)
- Single room restriction for under 35s (see below)
All of these restrictions will also be applied to the housing costs element paid under Universal Credit if you receive this rather than Housing Benefit.
There is also a restriction in Housing costs to under 21s who claim Universal Credit which does not apply on Housing Benefit (see below)
What is Local Housing Allowance?
Local Housing Allowance is the standard rate of Housing Benefit or Universal Credit housing costs element paid to people who rent a home from a private landlord. It does not apply to people who are in social housing or who are in a shared ownership scheme. It also does not apply if you have claimed Housing Benefit at the address since before 7th April 2008.
If Local Housing Allowance applies to you, the rate you are allowed depends on where you live, your income and savings and who else lives in your household including non-dependents. The figure is used even if your rent is much higher than the local housing allowance rate.
To find out how much your local housing allowance is you can check this website Local Housing Allowance
The Local Housing Allowance rates are based on the cheapest 30% of privately rented properties in your local area. This means that 70% of rents charged are higher than the Local Housing Allowance rate.
Changes to Local Housing Allowance rates
If the Local Housing Allowance applies to you, the rate of your Housing Benefit or Universal Credit housing costs element will be reassessed every 12 months. It can be reassessed earlier if your circumstances change. It is important to check carefully the wording of the decision notice about the level of Housing Benefit or Universal Credit housing costs element you are being paid and the list of changes in circumstance you should declare. If you do not tell the council or DWP about any of these changes that happen you may have an overpayment of benefit.
Local Housing Allowance room calculation
You are accepted as needing a bedroom for each of the following people in your house:
- An adult or couple
- Any other adult over 16
- Any two children of the same sex who are under 16
- Any two children under 10 regardless of sex
- Any other child
- An extra bedroom if you have a foster child or children
- An extra bedroom if you have a disabled child who cannot share a bedroom because of their disability
- A non-resident overnight carer (for yourself or your partner)
- A child or stepchild away on duty with the armed forces who is planning to return home
You cannot be allowed more than 4 bedrooms if the Local Housing Allowance rules apply to you.
Rent restrictions if you are under 35
Most people who rent from a private landlord and are aged under 35 are only entitled to be paid Local Housing Allowance at the reduced shared accommodation rate. This means that the maximum level of your Housing Benefit or Universal Credit housing costs element will be the rate that applies for a single room in a shared house. This rate will be applied even if you are living in a flat or other property unless you come into an exempt group.
You can find the figures for the shared room rates for your area from this website Local Housing Allowance
When the shared accommodation rate does not apply
The shared accommodation rate does not apply if:
- You live in a Housing Association property
- You could afford the rent when you moved in and have not claimed Housing Benefit or Universal Credit housing costs element in the last year. In this situation there will be a delay of 13 weeks before the shared room rate is applied.
- You are not living on your own ie if you have a partner or a child or an adult dependent or if you are a foster carer
- You are under 22 and have been in care since your 16th birthday
- You are aged 25 to 34 and have lived in hostels for homeless people for 3 months or more and while there you were given rehabilitation or support to help you to settle back into the community
- You are aged 25 to 34 and have left prison and your accommodation has been arranged under the Multi Agency Public Protection Arrangements (MAPPA)
- If you have a disability the shared accommodation rate will not apply if you need overnight care or if you qualify for the severe disability premium (Housing Benefit only) or if you are getting the middle or higher rate of Disability Living Allowance care component of the daily living component of Personal Independence Payment or the armed forces independence payment
Universal Credit housing costs for under 21s
There is a restriction in the level of housing costs paid under Universal Credit for young people aged 18 to 21 who make new claims in full service areas after 1st April 2017. This does not apply to those who are not yet in full service areas and does not apply to those whose claim for Universal Credit housing costs was made before 1st April 2017.
Areas in Birmingham will become full service from November and December 2017 and Coventry will become full service from March 2018.
People who are aged 18 to 21 will not be able to claim help with their housing costs unless they are accepted as vulnerable.
What does vulnerable mean?
The definition of vulnerable includes:
- people who are threatened with domestic violence by their partner, former partner or a family member
- People who have to live away form their parents due to a serious risk to physical or mental health. The Government has produced detailed guidance for UC staff explaining who is covered under this. It should be possible for many young people who are living alone to argue that they come under this category. If you think you may be covered by this heading you can get further advice from an advice agency or support worker
- People who have a child living with them
- People who could previously afford their rent and who earned more than their UC earnings threshold for 6 months (they will get 6 months protection). For a single person the earnings threshold is likely to be 16 times the national minimum wage or £89.60 per week.
- People who left care before they were 18
- People who receive middle or highest rate Disability Living Allowance care component or daily living component of Personal Independence Payment
- People who earn more than £89.60 (16 hours at National Minimum wage for someone aged 18 to 20)
It is important that all young people who are refused housing costs because of this policy should seek advice from an advice agency as soon as possible so that they can explore whether they have grounds to challenge the decision.