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How Housing Benefit is calculated

Income, benefits and disregards

Your (and your partner’s) total income is added together in order to calculate your Housing Benefit award. This includes all earned income (such as wages) and all unearned income (such as Child Tax Credit).

Employed earnings

We can only deduct the following from your gross earnings regardless of what is actually deducted:

  • Income Tax
  • National Insurance contributions
  • half of any pension contributions

We try to use an average of your income. For example, if you're paid monthly we'll deduct the above and work out the average of 2 monthly payslips. The average is then converted into a weekly figure.

We require 2 monthly payslips, 2 four-weekly payslips, 3 fortnightly payslips or 5 weekly payslips. All payslips provided must consecutively follow each other.

If you have just started work, and have not yet received the number of payslips we have asked for, you can provide:

  • one payslip
  • your contract of employment
  • a letter from your employer confirming the number of hours you're due to work each week and your hourly pay, or the number of hours you're due to work each week and your annual salary
  • a Certificate of Earned Income form which must be completed and stamped by your employer. These forms are available on request

You'll still need to provide your 2 monthly payslips, 2 four-weekly payslips, 3 fortnightly payslips or 5 weekly payslips once received.

Self-employed earnings

If you're self-employed we'll require your self-employed accounts. Your self-employed accounts should be for a recent trading period (for example the most recent financial year, or the last 6 or 12 months).

You will also need to supply evidence of your income and expenses by providing invoices and receipts for the relevant trading period.

We'll then work out your profit for the trading period and disregard any income tax, National Insurance contributions and half of any pension contributions. The remaining profit is then converted into a weekly figure.

If you have just started self-employment you can:

  • provide a self-employed account for the last 3 months with proof of income and expenses
  • provide a projected self-employed account for 3 months from the start of your self-employment

If you don't have your self-employed accounts already prepared, you can print the self-employed declaration form and complete it as fully as possible.

You should ensure your trading period on the self-employed declaration form does not exceed 52 weeks.

Self employed declaration form (PDF, 156.32 KB)

If you're self-employed you will also need to provide a letter from HMRC confirming your Unique Tax Payers Reference Number (UTR Number).

Benefits

If you're in receipt of other welfare benefits these will be added to your claim as they are paid and no amounts will be deducted. You'll need to provide a recent letter from the relevant benefits department to confirm your entitlement.

Disregarded monies

Some incomes are completely disregarded for the calculation of Housing Benefit, for example Child Benefit, Disability Living Allowance and money received from an ex-partner towards child maintenance.

Disregarded earnings

We disregard a small amount from your earnings if you are working. These disregards vary depending on your household composition and the number of weekly hours worked by you and/or your partner.

Student income and Housing Benefit

Student loans, grants and bursaries are treated as income for Housing Benefit purposes.

If you're entitled to a student loan (via student finance) and choose not to take the loan, then the amount you were entitled to will still be treated as your income.

Similarly if you take a lower amount than you're entitled to, we will still treat the amount you were entitled to as your income.

However the following forms of loans, grants and bursaries are disregarded for Housing Benefit purposes:

  • Child Care Grant
  • Parent’s Learning Allowance
  • some bursaries which are for course-related costs and/or childcare
  • Special Support Grant
  • student grant for tuition fees
  • student loan for tuition fees

We will need to see all pages of your Student Finance award letter, clearly showing the breakdown of your loans, grants and bursaries.

We will also need to see an original Council Tax exemption certificate or a student registration letter confirming your weekly hours of study and the length of your course.

Childcare costs and Housing Benefit

An amount for childcare costs can be disregarded from your earnings if any of the following apply to you:

  • a lone parent in remunerative work for 16 hours per week or more
  • a couple where both work at least 16 hours per week
  • a couple where one works at least 16 hours per week and the other is incapacitated, in hospital or in prison

In order to deduct childcare costs from your earnings, the childminder must be one of the following:

  • a registered domiciliary care worker
  • foster carer (but not for their foster child)
  • Ofsted registered
  • someone approved under the Homecare Providers Scheme
  • the local authority (either at or by a school, or by the local authority at any other suitable site)

You will need to provide evidence of your childcare costs. This could be a recent letter from your childminder or a recent agreement/contract. The proof should also show their Ofsted registration number, or proof of their status if they're not Ofsted registered, such as proof they're approved under the Homecare Providers Scheme.

We can disregard:

  • up to £175 per week from your earnings where one child is of the relevant age
  • up to £300 per week from your earnings if there are 2 or more children of the relevant age

Relevant age means:

  • a child up until the 1st Monday in September following their 15th birthday
  • a disabled child up until the 1st Monday in September following their 16th birthday

You must be in receipt of Child Benefit for the child in order for us to deduct any childcare costs for that child from your earnings.

If your earnings are lower than your childcare costs, any remaining balance can be deducted from your Working Tax Credits to reduce your income for Housing Benefit purposes.

Online benefits calculator

You can use an independent benefits calculator to find out how your benefits will be affected if you have a change in your circumstances and what benefits you could be entitled to.

Benefits calculators

Housing Benefit and your capital Toggle accordion

Capital is anything that has a monetary value, such as land and property, investments and savings, but which is not received on a regular basis or with reference to a specific period, like earnings.

You will not be entitled to Housing Benefit if your (and your partners) combined capital exceeds £16,000, unless you and/or your partner are in receipt of the Guarantee Credit element of Pension Credit.

The following are some of the most common items counted as capital:

  • cash
  • Individual Savings Accounts (ISAs)
  • land
  • lump sums such as redundancy payments, insurance payments and back payments of social security benefits
  • Premium Bonds and Income Bonds
  • properties you or your partner own or jointly own
  • money invested in a business and business assets
  • money held or jointly held in banks, building societies and the Post Office
  • money held or jointly held in any current accounts or pre-paid cards
  • money held in trust
  • money you have borrowed
  • stocks, shares, unit trust holdings, government securities and bonds
  • Tax Exempt Special Savings Accounts (TESSAs)
  • tax refunds
  • Tessa only ISAs (TOISAs)
  • National Savings Certificate

You should note that this is not a full list. Other forms of investments, properties, savings, or anything that has monetary value could be counted as capital.

Your total capital affects your Housing Benefit as follows:

  • total capital of £6000 or less does not affect your Housing Benefit if you are below the State Pension Age
  • total capital of £10,000 or less does not affect your Housing Benefit if you are above the State Pension Age
  • total capital between £6,000 and £16,000 can affect your Housing Benefit. The regulations say we must assume that you earn income from your capital. See the table below to work out how much is added to your weekly income depending on how much capital you have
  • total capital over £16,000 means that you cannot get Housing Benefit unless you and/or your partner have reached the State Pension Age, and one of you gets the Guarantee Credit element of Pension Credit

Check your State Pension age

The table below shows how much is added to your weekly income depending on how much capital you have.

Total amount of capital in poundsWeekly amount added to your total weekly income if you are below the State Pension AgeWeekly amount added to your total weekly income if you are above the State Pension Age
£6,000.01 to £6,250£1£0
£6,250.01 to £6,500£2£0
£6,500.01 to £6,750£3£0
£6,750.01 to £7,000£4£0
£7,000.01 to £7,250£5£0
£7,250.01 to £7,500£6£0
£7,500.01 to £7,750£7£0
£7,750.01 to £8,000£8£0
£8,000.01 to £8,250£9£0
£8.250.01 to £8,500£10£0
£8,500.01 to £8,750£11£0
£8,750.01 to £9,000£12£0
£9,000.01 to £9,250£13£0
£9,250.01 to £9,500£14£0
£9,500.01 to £9,750£15£0
£9,750.01 to £10,00£16£0
£10,000.01 to £10,250£17£1
£10,250.01 to £10,500£18£1
£10,500.01 to £10,750£19£2
£10,750.01 to £11,000£20£2
£11,000.01 to £11,250£21£3
£11,250.01 to £11,500£22£3
£11,500.01 to £11,750£23£4
£11,750.01 to £12,000£24£4
£12,000.01 to £12,250£25£5
£12,250.01 to £12,500£26£5
£12,500.01 to £12,750£27£6
£12,750.01 to £13,000£28£6
£13,000.01 to £13,250£29£7
£13,250.01 to £13,500£30£7
£13,500.01 to £13,750£31£8
£13,750.01 to £14,000£32£8
£14,000.01 to £14,250£33£9
£14,250.01 to £14,500£34£9
£14,500.01 to £14,750£35£10
£14,750.01 to £15,000£36£10
£15,000.01 to £15,250£37£11
£15,250.01 to £15,500£38£11
£15,500.01 to £15,750£39£12
£15,750.01 to £15,999.99£39£12

 

Applicable amount Toggle accordion

Housing Benefit is calculated using an applicable amount. This is a part of the means test.

The applicable amount is the amount of money the government believes you (and your partner) need to meet your necessary weekly costs. The actual amount is dependent on the size and circumstances of your family.

We subtract your applicable amount away from your total weekly income, and any remaining income is known as your excess income.

Applicable amounts are set by adding the following:

  • your personal allowance
  • personal allowance for any children you have
  • any family or disability premium

Check your State Pension age

Eligible rent - council and housing association tenants Toggle accordion

This does not apply to housing association tenants on a market rent rate. Housing association tenants on market rent rates are considered private tenants.

Eligible rent is the maximum amount of Housing Benefit we can pay you regardless how much your rent is.

If you are renting from a local council or from a housing association then eligible rent equals gross rent minus ineligible service charges (service charges you pay that are not towards communal costs).

However, if you are under-occupying your property, meaning if you have a spare bedroom, then an amount is deducted from your eligible rent as follows:

  • 14% of the eligible rent is deducted for one spare bedroom
  • 25% of the eligible rent is deducted for two or more spare bedrooms

Depending on the composition of your household you will have a ‘bedroom requirement’. This is the number of bedrooms you need based on Housing Benefit regulations. If the amount of bedrooms your tenancy agreement shows exceeds the amount of bedrooms required, then a deduction will be taken as shown above.

Bedroom requirements

The bedroom requirements state that you should have one room for each:

  • adult couple
  • two children under 16 of the same sex
  • two children under 10 (regardless of sex)

The following can have their own bedroom:

  • a single adult (aged 16 or over)
  • a child that would normally share but shared bedrooms are already taken; for example you have three children and two already share
  • couples who can’t share a bedroom because of a disability or medical condition (you will need to provide proof of the disability or medical condition, and you will need to prove how the disability or medical condition prevents the couple from sharing a room)
  • children who can’t share a bedroom because of a disability or medical condition (you will need to provide proof of the disability or medical condition, and you will need to prove how the disability or medical condition prevents the child from sharing a room)
  • a non-resident overnight carer for you or your partner, but only if they must stay overnight (you will need to provide medical proof that an overnight carer is required and that regular overnight care is provided)

One spare bedroom is also allowed for:

  • an approved foster carer who is between placements but only for up to 52 weeks from the end of the last placement
  • a newly approved foster carer for up to 52 weeks from the date of approval if no child is placed with them during that time

Only one extra room can be allowed for a foster carer per household.

Rooms used by students and members of the armed or reserve forces will not be counted as spare if they’re temporarily away and intend to return home.

Eligible rent - private tenants Toggle accordion

If you are a private tenant, the Local Housing Allowance (LHA) is used to work out your eligible rent. This also applies to housing association tenants on a market rent rate tenancy.

Eligible rent is the maximum amount of Housing Benefit we can pay you regardless of how much your rent is.

Eligible rent equals your LHA rate (unless your rent is lower, in which case your eligible rent will be your actual rent cost). The LHA does not apply to council tenants and housing association tenants, unless they are market rent rate tenants.

The LHA rate is calculated by identifying:

  • your age
  • how many people in the property require a bedroom
  • which rate applies due to the geographic location of your property

LHA rates are dependent on the number of bedrooms you require, with a maximum of 4 bedrooms.

Depending on the composition of your household you will have a bedroom requirement. This is the number of bedrooms you require based on Housing Benefit regulations. Each number of bedrooms required has its own LHA Rate.

If you are under the age of 35, living on your own, you will only be entitled to a shared room rate.

If you are renting a bedroom in a shared accommodation and are living on your own, you will also only be entitled to a shared room rate.

Bedroom requirements

One room for each:

  • adult couple
  • two children under 16 of the same sex
  • two children under 10 (regardless of sex)

These people can have their own bedroom:

  • a single adult (16 or over)
  • a child that would normally share but shared bedrooms are already taken; for example you have three children and two already share
  • couples who can’t share a bedroom because of a disability or medical condition (you will need to provide proof of the disability or medical condition, and will need to prove how the disability or medical condition prevents the couple from sharing a room)
  • children who can’t share because of a disability or medical condition (you will need to provide proof of the disability or medical condition and will need to prove how the disability or medical condition prevents the child from sharing a room)
  • a non-resident overnight carer for you or your partner, but only if they must stay overnight (you will need to provide medical proof that an overnight carer is required and that regular overnight care is provided)

One spare bedroom is also allowed for:

  • an approved foster carer who is between placements but only for up to 52 weeks from the end of the last placement
  • a newly approved foster carer for up to 52 weeks from the date of approval if no child is placed with them during that time

Only one extra room can be allowed for a foster carer per household.

Rooms used by students and members of the armed or reserve forces will not be counted as spare if they’re temporarily away and intend to return home.

Bedroom requirements examples

Example 1
A claimant lives with her 19 year old brother and 2 sons aged 9 and 11. The brother is not a joint-tenant. This results in a requirement of 3 bedrooms:

  • one bedroom for the claimant
  • one bedroom for the brother
  • one bedroom for the sons to share

Example 2
A claimant lives with his partner, his 68 year old mother, 3 daughters (8, 16 and 17) and one son aged 9. The mother is not a joint-tenant. This results in a requirement of four bedrooms:

  • one bedroom for the claimant and partner
  • one bedroom for the mother
  • one bedroom for two under 10s to share
  • one bedroom for the 16 year old
  • one bedroom for the 17 year old

Although it appears that they require 5 bedrooms, the LHA has a maximum of a 4 bedroom rate.

LHA rates

For April 2019 to March 2020

 Weekly amount
Shared accommodation£79.72
1 bedroom£165.05
2 bedroom£204.35
3 bedroom£257.16
4 bedroom£331.81

Eligible rent - private tenants pre-April 2008 Toggle accordion

This only applies to private tenants who have been receiving Housing Benefit before 7 April 2008 and have not changed addresses or have had a break in their claim since.

Eligible rent is the maximum amount of Housing Benefit we can pay you regardless how much your rent is.

If you have been receiving Housing Benefit from before 7 April 2008 and have not changed addresses, nor had a break in your claim then you are under the Local Reference Rent (LRR) scheme. This also applies to new claims in some unconventional accommodation.

The LRR represents the average rent for a property of a size that would meet the claimant’s needs.

The rent officer then carries out an individual valuation of the claimant’s property, and the valuation reflects the property’s own market value and is referred to as the Claim Related Rent.

The Claim Related Rent is compared to the Local Reference Rent and Housing Benefit is based on the lesser figure.

Rent officer’s determination

This means your eligible rent is the rent officer’s determination. The rent officer (via the Valuations Office Agency) will make a series of valuations and reach a determination. The determination is your eligible rent.

Find more information on Housing Benefit – LRR scheme.

Non-dependants - people living with you Toggle accordion

A ‘non-dependant’ is the term used to describe anyone who normally resides with you and is not:

  • a joint-tenant or sub-tenant
  • a resident landlord (or member of their family)
  • someone who lives with you to care for you or your partner, and is employed by a charitable or voluntary body which charges you for the care
  • your child (for whom Child Benefit is paid)
  • your partner

A non-dependant is someone who normally lives with you such as an adult child, relative or friend and is not liable to pay rent.

A non-dependant can be anyone over the age of 16 for whom Child Benefit is no longer in payment.

In most cases, a set amount for each non-dependant is deducted from your maximum Housing Benefit entitlement, such as your eligible rent.

This is to reflect the non-dependant’s assumed contribution to your housing costs. Any actual contribution made by the non-dependant towards the rent is ignored. The amount varies according to the age and income of the non-dependant.

Working out deductions

To work out how much will be deducted for your non-dependant, you can use the table below.

If you have more than one non-dependant, more than one deduction will be taken; deductions are for each non-dependant.

You should note that only one non-dependant applies for non-dependant couples, but this would be based on their combined income.

Non-dependent deductions for Housing Benefit
Non-dependant’s incomeWeekly amount to be deducted from your eligible rent
Non-dependant aged 18 or over, whose combined weekly gross income is:
Less than £143£15.60
£143 to £208.99£35.85
£209 to £271.99£49.20
£272 to £362.99£80.55
£363 to £450.99£91.70
£451 or more£100.65
Non-dependant who is:
In receipt of Pension Credit (Guarantee Credit or Savings Credit)£0
Aged less than 25, and in receipt of Income Support, Employment Support Allowance Income Related (ESA IR) and Jobseekers Allowance Income Based (JSA IB)£0
Aged 25 or over, and in receipt of Income Support, ESA IR or JSA IB£15.60
Aged 18 or over, and in receipt of ESA Contributions Based or JSA Contributions Based£15.60
Aged 18 or over and not economically active (not working, studying nor claiming benefits)£15.60
Non-dependant aged 16 or 17, regardless of their income    £0

Weekly income

A non-dependant’s combined weekly income is the total amount of money they have coming in.

Child Benefit, Child Tax Credit and any earnings will be added together to reach their combined weekly income.

When we are unable to establish the income of your non-dependant, we will apply the highest deduction.

This is an assumption that your non-dependant’s gross weekly income is £430 or more.

There are certain scenarios in which we do not take a non-dependant deduction. No deduction applies if the non-dependant:

  • has been in hospital for more than 52 weeks
  • is a full-time student; however we could take a deduction from your Housing Benefit in the summer holidays if the student takes up work, unless you or your partner are aged 65 or more
  • is under 18
  • normally lives elsewhere

There is also no non-dependant deduction if the claimant or their partner:

  • is registered blind or is treated as registered blind
  • receives Attendance Allowance
  • receives the care component of Disability Living Allowance
  • receives the daily living component of Personal Independence Payment

How Housing Benefit is paid Toggle accordion

Housing Benefit payments

The table below shows how Housing Benefit is paid.

Type of tenantPayment frequencyPayment method
Council tenantWeekly in advanceDirectly into your rent account
Private tenant - Housing Benefit paid to youFortnightly in arrearsDirectly into your chosen bank account
Private tenant - Housing Benefit paid to your landlord4 weekly in arrearsDirectly into your landlord's chosen bank account

Housing Benefit is usually paid on a Monday except for Bank Holidays. Some banks can take up to three days to process payments. Bear this in mind before contacting us regarding missing payments.

Housing Benefit paid to your landlord

If you are a private tenant we will normally pay Housing Benefit directly to you, rather than to your landlord.

We can only pay Housing Benefit directly to your landlord if you are in 8 weeks or more rent arrears, if you are unlikely to pay the rent or have difficulty managing your finances, or if you are considered to be vulnerable.

Housing Benefit paid directly into your bank account

We pay Housing Benefit directly into your bank account via BACS (Banker’s Automated Clearing Services). This is a scheme which takes up to 3 working days for the money to appear in your bank account.

You need to provide us with your bank details so we can make payments directly to you via BACS. If we are paying your landlord, we will need their bank details in order to pay them directly via BACS.

If you would like to set up BACS payments on your Housing Benefit claim, or would like us to change the bank account in which we pay you, you will need to complete a BACS form. You can also provide us with these details of the bank account you would like your Housing Benefit to be paid into:

  • name of bank
  • branch address
  • name as it appears on bank card
  • sort code

You will need to provide your BACS information in writing or a letter scanned and sent via e-mail. We can only accept e-mails regarding your BACS details if your email address contains your name. Any written correspondence you send us regarding setting up or changing your BACS details must be signed and dated.

Housing Benefit

Roycraft House, 15 Linton Road, Barking IG11 8HE

benefits@lbbd.gov.uk

When your Housing Benefit will end Toggle accordion

We will end entitlement to Housing Benefit in these circumstances:

  • death of the person claiming Housing Benefit
  • Housing Benefit entitlement reduced to nil, for example by an increase in income
  • Housing Benefit is suspended and you fail to respond to a request for information within one calendar month
  • moving out of the borough

If at any time your claim is suspended or ended, we will tell you what we have done. You can appeal against our decision to end your claim if you disagree with it.

You must tell us about any changes you think might affect your Housing Benefit. If you don’t, you may receive too much or too little benefit, which could result in an overpayment. Don’t wait for us to review your claim.

Any changes in your, your partner’s, or your household’s circumstances, must be notified within one month of the change.