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How housing benefit is calculated

If you get one of the following:

  • Income Support
  • Job Seeker's Allowance (Income Based)
  • Employment and Support Allowance (Income Related)
  • Pension Guarantee Credit

you will get the full amount of your eligible rent/maximum Housing Benefit. This will be minus any non-dependant deductions.

If you live in a Housing Association property, your eligible rent will be your rent, less any ineligible service, and fuel deductions. From 1 April 2013:

  • if you have more bedrooms than the rules allow, your eligible rent will be further reduced by 14%. This is for one spare bedroom
  • it will be reduced by 25% for two or more spare bedrooms

If you live in a privately rented property and:

  • have been continuously on Housing Benefit at the same address since before 7 April 2008. Our maximum Housing Benefit is a figure set by the Rent Service
  • have claimed after 7 April 2008, or have changed address since this date, you will be subject to the Local Housing Allowance.

If you do not get one of the following:

  • Income Support
  • Job Seeker's Allowance (Income Based)
  • Employment and Support Allowance (Income Related)
  • Pension Guarantee Credit

we work out your Housing Benefit. We do this by comparing the money you get each week with your 'Applicable Amount'. Your applicable amount is what the Government says you and your family need to live on each week. The applicable amount will be higher for some people. For example, if you are a pensioner, disabled, or you are a one-parent family.

If your weekly income is less than, or the same as your Applicable Amount, you will get the full amount of Housing Benefit. If this happens, you should claim Income Support, as you may get more help.

Use the online benefit calculator to see if you qualify for benefit. If your weekly income is more than your Applicable Amount, you are entitled to receive Housing Benefit. This will be equal to the weekly Eligible Rent. This income over your Applicable Amount is called 'Excess Income'. This will be less 65% of the weekly Excess Income figure, and less any non-dependant deductions.

How is my weekly income calculated?

We count the money that you and your partner earn from work after money has been taken out. This is for Tax, National Insurance and half of any money paid into a pension fund. To this figure we add any other income that you might have. For example, state retirement pension, a pension from a former employer, tax credits, or other state benefits.

Some types of income are disregarded and are not taken into account:

  • Disability Living Allowance
  • Personal Independence Payments
  • Attendance Allowance, and
  • Child Benefit.

Even though they are not taken into account, it is still important that you tell us about them.

A 'Tariff Income' may also be calculated from any capital/savings that you or your partner have. This is added to the above figures. Please see the 'What counts as capital and how does it affect my benefit?' section below for more information.

For the purposes of working out your benefit, your weekly income is:

  • the total of any earned income
  • the unearned income and Tariff Income

as detailed above.

What counts as capital and how does it affect my benefit?

For Housing Benefit purposes, most savings, investments and assets owned by you and your partner are treated as 'capital'. Examples of the most likely sources are:

  • cash savings
  • current accounts. Even if you only use it to get things paid into it, like:
    • wages
    • a pension
    • or you just use it to pay bills
  • money in a bank, post office or building society account
  • money in savings schemes
  • National Savings Certificates
  • Premium Bonds
  • stocks and shares, bonds and other investments
  • property or land

The following do not count as capital:

  • personal possessions
  • certain business assets, if you are still working in the business
  • surrender values of Life Policies
  • sale proceeds of your home. This is for up to six months if you intend to purchase another home
  • money from insurance claims in respect of loss or damage to home or personal possessions. This is for up to six months if used to replace or repair)
  • any Social Fund payment

The above lists are not exhaustive. Enquiries should be made to clarify the situation if you are doubtful about anything.

How your capital tariff is calculated

Once we have worked out what your capital amounts to, Government rules say that:

  • if you, and your partner if you are a couple, or
  • have savings or capital of more than £16,000

you cannot get Housing Benefit.

If you, and your partner, if you are a couple, have £6,000 or less. This will not affect your claim. If you have reached the qualifying age to claim State Pension Credit, this figure is £10,000.

If you or your partner are old enough to claim Pension Credit and have between £10,000 and £16,000. This affects how much Housing Benefit you will get. For every £500 (or part of £500) you have over £10,000, we add £1 to the money we count each week. We do this when working out benefit.

If you and your partner are working age and have between £6,000 and £16,000. This affects how much Housing Benefit you will get. For every £250 (or part of £250) you have over £6,000, we add £1 to the money we count each week. We do this when working out your benefit. The money that is counted from your capital is called Tariff Income. We do not count any actual interest you get from savings and capital.

What is an applicable amount?

See the applicable amounts. This is a weekly figure set, usually annually, by the Government. This represents the basic living needs of the claimant and family.

An applicable amount is made up of:

  • a claimant's personal allowance
  • personal allowances for a partner and/or dependant children
  • premiums. For example, a family premium or disability premium

If your weekly income is less than, or the same as your Applicable Amount, you will get the full amount of Housing Benefit. If this happens, you should claim Income Support. You may get more help.

If your weekly income is more than your Applicable Amount, you are entitled to receive Housing Benefit equal to the weekly Eligible Rent. This income over your Applicable Amount is called "Excess Income". This will be less 65% of the weekly Excess Income figure, and less any non-dependant deductions.

What if there is a shortfall between the amounts of benefit awarded and the full rent?

Anyone receiving Housing Benefit where there is:

  • a shortfall between the amount of rent payable and the amount of Housing Benefit awarded
  • which isn't due to a deduction for a non-dependant person who lives with you can apply.

See Discretionary Housing Payment

The amount that we can spend is limited to the amount specified by the Government. These payments are not part of the Housing Benefit schemes. To be considered, you will need to download and complete our Application for Discretionary Housing Payments form.