Housing Benefit Changes – Are You Ready?

Monday, August 20th, 2012

As many will be aware, recent changes to housing benefit regulation puts caps on the maximum Housing Benefit paid for various sized properties (based on the number of bedrooms).

Further changes to Housing Benefit regulations will be coming into force next year further to the Housing Benefit (amendment) Regulations 2012. These will limit the amount of Housing Benefit payable where a property is deemed to be under occupied.

The regulations, that come into force on 1st April 2013, apply to tenants in the social sector (chiefly local authorities and registered housing associations) and reduce the amount of Housing Benefit payable where it is considered that the property has more bedrooms than the household requires.

The calculation involved is based on one bedroom being required for the following:

• A couple
• A person aged 16 or over
• Two same sex children
• Two children under 10
• Any other child
• Someone providing overnight care

The definition of a child for these purposes does not include a foster child. However, a lodger will be taken into account.

The reductions to be applied are 14% of “eligible rent” for under occupation by one bedroom and 25% for two or more. It should be noted that there is no definition of the minimum size of a bedroom.

The benefits agency are likely to request information from both the landlord and the tenant / claimant and they have the power to suspend Housing Benefit should a claimant fail to respond to a request for information.

Clearly, claimants will need to consider how to react to these changes. One option would be to downsize, another to take in a lodger.

With regard to the latter, the first £20.00 received from the lodger will have no effect on the tenants’ benefits and furthermore, the first £4,250.00 per annum is tax exempt.

Another alternative would be to apply for a discretionary housing payment (DHP). These are available to anyone in receipt of Housing Benefit who is affected by the new restrictions but are, of course, awarded at the discretion of the local authority concerned.

In this regard, the government has made an additional £30 million available for DHP for 2013/14 specifically for foster carers (see above) and those living in adapted accommodation.

Should any tenant or landlord have any concerns over how the new regulations will affect them they can contact Hanne & Co’s Housing Department who specialise in all aspects of Housing Law.

By Housing Solicitor Ian Butler.
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