How Housing Benefit Works

Low Income Families & Those Made Redundant Can Get Help to Pay Rent

Apr 5, 2009 Asa Ghaffar

Low income families and those made redundant may find it hard to pay rent because of financial difficulties. Find out how housing benefit can help manage household bills.

Vulnerable groups are far more likely to struggle to pay rent because of financial difficulties. Housing benefit is designed to help low income families pay rent and avoid financial difficulties. It can even help prevent house eviction. The most likely beneficiaries of housing benefit are likely to be those on Job Seekers Allowance (JSA) or pension credit.

Housing Benefit Entitlement for Low Income Families

The amount of housing benefit low income families are entitled to depends primarily on locality, income and the average cost of renting accommodation. Housing benefit may help to pay rent in full, but a full assessment will be conducted before a decision is made. Whilst housing benefit can cover the cost of a caretaker, it doesn't cover other household bills, such as food, light or heating.

Housing Benefit Prior to 7th April 2008:

A standard Local Housing Allowance figure is calculated by a rent officer. The figure that the rent officer produces will be based on the area the claimant lives in and number of rooms the rules state are required. This figure can be up to £15 per week more than is needed to pay rent, but is often less. It is difficult to challenge a decision.

Housing Benefit After 7th April 2008:

Figures aren't provided by a rent officer as Local Housing Allowance rules aren't used. Instead an assessment is made regarding whether it is reasonable for housing benefit to pay rent in-full. The decision is based upon a comparison of how much is paid relative to comparable properties in the area.

Backdated Housing Benefit to Help Cover Household Bills

It is possible for low income families to receive backdated housing benefit payments for up to 6 months prior to making a claim. However, the claimant will need to prove that there is good reason for not making a claim earlier. Not knowing that a claim for housing benefit could be made is unlikely to be sufficient, except for over-60's.

Who is Not Entitled to Housing Benefit?

Housing benefit is designed to help low income families, including those made redundant, cope with a shortfall in household bills. However, the following groups are not entitled to claim housing benefit:

Personal savings over £16,000. Unless over 60 years of age and in receipt of pension credits, housing benefit isn't available to people with personal savings in excess of £16,000;
Home owners. Housing benefit cannot be claimed to pay the mortgage or for secured loans;
Asylum seekers. Both asylum seekers and those sponsored to be in the UK cannot claim housing benefit;
Full-time students. People in full-time education aren't eligible for housing benefit, unless registered disabled.

Other Housing Benefit Restrictions:

Living with a partner. Only one partner can claim housing benefit, not both;
Single under-25's. Housing benefit can only be claimed for bed-sit accommodation or a room in shared accommodation.

How is Housing Benefit Paid?

Local authority tenants. Benefit will be deducted from rental payments;
Housing Association tenants. Housing benefit can either be paid directly to the Housing Association or the claimant.

Housing benefit is normally paid by bank transfer, although it is sometimes sent by cheque. This is normally a monthly transfer, although it can be every 2 weeks provided the payment is greater than £2 per week. Housing benefit helps people to pay rent for an indefinite period, although those moving to a new are may have to re-apply. Changes in personal savings or employment status will also affect claimants.

Those that found this article useful may be interested in a re-assessment of council tax payments or finding out what to do if council tax arrears are an issue. Should personal debt be causing sleepless nights, find out how this can be negotiated through improved personal budgeting or the right debt solution.

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