Changes to Housing Benefit

Introduction

Housing Benefit is changing. If you are renting privately and are claiming Local housing allowance (LHA), you may already be getting less, or your benefit may be affected in the future.

Find out about the changes that started in April 2011 and how they may affect you over time.

New rules apply to new claims made after 1 April 2011. More changes are expected in 2012 and 2013.

Who is affected by the changes?

If you are renting from a private landlord and you made your claim for housing benefit at your current address on or after 7 April 2008, the changes probably affect you. Single People under 35 and larger households are usually affected more than others.

You will usually not be affected until 1st January 2012 if you made your claim before 7 April 2008 have not moved since, or had a change in your household size, or there has been no break in your claim.

If you have had one of the changes before 1st January 2012 you will probably be affected earlier.

When will the changes affect me?

New claims for Housing Benefit claims for those who privately rent from 1 April 2011 onwards are covered by the new rules.

If you were claiming Housing Benefit and rent privately before 1 April 2011, some changes may apply from 1 April 2011, while others may be delayed.

From 1 April 2011 onwards, if your circumstances change so that you are entitled to housing benefit for a smaller home (for example, someone in your family leaves home) or you move to a different property, the new rules apply and your LHA will be reassessed at the lower rates.

Many of the changes take effect on the anniversary of your claim, when your entitlement is reassessed. For example, for a claim made on 2 September 2010, the anniversary will be a year later on 2 September 2011.

However, in some cases, if you are worse off as a result of the changes, the reduction to your Housing Benefit will be delayed for a further nine months. After this time, your Housing Benefit will be recalculated and your benefit may be reduced.

For example:

• If your claim was made in October 2010, the anniversary of your claim is October 2011. Any reduction in your benefit could be delayed for a further nine months – until July 2012.
• If your claim was made in March 2011, it will be due for review in March 2012. Any reduction in your benefit could be delayed for a further nine months – until December 2012.

Changes from 1 April 2011

‘Excess’ payments end

Before April 2011, you could be paid Housing Benefit of up to £15 a week more than your rent – and keep the difference. This happened only if your rent was lower than the amount allowed under local housing allowance. From 1 April 2011, maximum Housing Benefit is limited to the level of your rent. Excess payments stop on the anniversary of a claim, or sometimes sooner if there is a change in household circumstances.

Only 30 per cent of properties are affordable

In April 2011, maximum Housing Benefit rates in all areas were reduced – only three out of ten properties for rent in any area are now affordable for people making a new claim. Unless your rent is already one of the lowest 30 per cent in your area, the maximum Housing Benefit you can be paid will be less than your rent. To avoid rent arrears, you will have to make up the difference.

If you were Housing Benefit before April 2011, this change affects you up to nine months after the anniversary of your claim. This is an important time to consider your options and seek advice. Unless you can make up any shortfall, you may have to consider moving somewhere more affordable.

Local Housing Allowance maximum rates for Bristol can be found using on our Local Housing Allowance page.

Housing Benefit payments for a new maximum of four bedrooms

Housing Benefit rates for larger households used to include a maximum payment for up to five bedroom properties. From 1 April 2011, the rates are limited to a maximum of four bedrooms.

• For new claims made since 1 April 2011, the four bedroom rate is the maximum.
• If you received the five-bedroom rate before 1 April 2011, your benefit will be reduced up to nine months after the anniversary of your claim.
• If your circumstances change, e.g. your household becomes smaller, your benefit will be reassessed under the new rules.

If you need a larger property, you can still look for properties with more than four bedrooms, or other rooms that can be used as bedrooms. However, your maximum benefit will be based on the four bedroom rate, so a shortfall is likely unless the property is cheaper than usual for the area. You can use the Local Housing Allowance Calculator to work out how many bedrooms your household is entitled to claim for.

Reduced Housing Benefit and Council Tax Benefit if you have non-dependants

The council may reduce your local housing allowance if you share your home with adults who are not dependant on you – for example, adult sons or daughters, parents, relatives or friends. It is assumed that they should pay something towards your rent, whether they do so or not.

Non-dependant deductions (pdf, 22 KB) were increased in April 2011, and local housing allowance reduced as a result.

Increased payments for disabled people who need overnight care

If you or your partner are disabled and need a carer who doesn’t normally live with you to stay overnight, you may qualify for help with paying for an extra bedroom. This change applies to all private tenants. You will need to show that:

• you have the extra bedroom in your home available for the carer to use
• care is required
• care is provided.

Make sure that we know you have an overnight carer, so that they can review your claim.

Changes from 2012

Reductions in housing benefit if you are under 35 - from January 1

Currently, if you are under 25 and renting in the private sector, you are probably only entitled to Housing Benefit at the same rate as someone renting a single room in a shared house, even if you live in self-contained accommodation.

From January 2012, this rule – the ‘shared accommodation rate’ – will also apply to people aged up to 35 years. If you are aged under 35, you are likely to see a cut to your LHA payment and may no longer be able to afford your current property as a result.

There are some exceptions – these changes don’t apply in some cases. More about housing benefit changes if you are under 35 (pdf, 31 KB).

Freezing local housing allowance rates - from April 2012

This will end the monthly uprating of local housing allowance rates and bring the system in line with the uprating of other pensions and benefits.

Changes from 2013

Capping overall benefits - from April 2013

No non-working household will be entitled to more in benefits than the average working household receives in wages. Overall benefit payments to households will be capped from 2013 and this will be achieved through cuts to Housing Benefit.

Families with three or more children are likely to be among those facing significant reductions in the amount of Housing Benefit awarded.

Under occupation in the social sector- from April 2013

Housing Benefit will be restricted for some people who are living in a property that is larger than their household size. This will apply to all working-age customers renting from a social landlord.

Annual increases in local housing allowance rates - from April 2013

Local Housing Allowance rates will be uprated in line with the Consumer Price Index (CPI). CPI measures the average changes in the prices of consumer and services in the UK from month to month. Any increase will be based on the September 2012 CPI.

Will I have to move?

You could find that moving to a cheaper property may be the only way to keep your rent affordable in the long-term. This may even involve moving area.
Make sure you allow plenty of time to move, particularly if you are looking for somewhere adapted for use by a disabled person. A local advice centre may be able to help you find somewhere suitable – use our directory to find one.

What if I can’t pay the shortfall?

Many private tenants will struggle as a result of these changes. It could be difficult to make up the shortfall between the reduced amount of benefit you receive, and the rent you have to pay. Some will fall into rent arrears. If you are in this situation, you will need to take action to avoid the risk of eviction. It may be possible to:

• talk to your landlord to see if your landlord will consider reducing the rent
• apply for a discretionary housing payment (pdf, 99 KB) to help make up the shortfall
• ask non-dependants to increase their contributions to the rent.

A local advice service may be able to help you to:

• negotiate with your landlord
• apply for a discretionary housing payment
• find somewhere more affordable.