Benefit Changes

Housing Benefit changes that occurred in 2013

The Government made some changes to Housing Benefit in 2013. If you want to know more about this you can look at the Gov.uk website. This is the official government website and gives the most up to date information.

Click on the links below to take you to the right sections

Under Occupancy Charge

Benefit Cap

Personal Independance Payment

Universal credit

Under Occupancy Charge/ Bedroom Tax

From April 2013 the Government has introduced the Under Occupancy Charge. This charge reduces the amount of Housing Benefit that Council and Housing Association tenants receive. Tenants are responsible for paying the shortfall in their rent if their Housing Benefit is reduced.

The Under Occupancy Charge will apply to tenants who:

• are in receipt of Housing Benefit,
• are of working age and
• who have one or more spare bedrooms

People are classed as ‘working age’ if:

• they are single and under pension credit qualifying age.
• they are a couple and are both under pension credit qualifying age (you can check the date you will reach pension credit age on www.gov.uk ).

Spare bedrooms are determined by the number of people living in a property together with their age and gender. Two children under 16 years of age and who are of the same gender will be expected to share a bedroom and two children under 10 years of age will be expected to share a bedroom regardless of their gender. If you have a child receiving DLA (middle or high rate care component) that needs their own bedroom, please contact Derby Benefits as you may be exempt from the charge if they meet the criteria and you can provide proof from a health professional.

Exemptions from the charge

If you have household member that lives away (such as an adult child at university or serving in the forces), but their permanent address is still at your home, their bedroom will not be classed as ‘spare’. You will need to inform Derby Benefits of this. However, your benefit may be reduced due to a non-dependent deduction.

Foster carers can be allocated an additional bedroom to their household entitlement even if they are in between placements, but this will only be for a limited period. You will need to advise Derby Benefits that you are a foster carer and need to use your extra bedroom. For any extra bedrooms you have, you will need to pay the shortfall in your rent or apply for Discretionary Housing Payments.

How is it calculated?

The Under Occupancy Charge is calculated by taking a fixed percentage (14% for 1 spare bedroom or 25% for 2 or more spare bedrooms) off the eligible rent. Housing Benefit eligible rent is the total amount of rent that could be eligible for Housing Benefit not necessarily the amount you are in receipt of. If the Under Occupancy Charge is more than the amount of benefit you receive you will no longer receive any Housing Benefit.

For example:

Mr and Mrs Davidson live in a three bedroom house costing £73.85 per week in rent. At the moment Housing Benefit covers the full amount of their rent (Housing Benefit eligible rent is £73.85). As they are under occupying their property by two bedrooms this means that their Housing Benefit will be reduced by £18.46 per week (25% of £73.85).

Mrs Wood lives in a three bedroom house with her two sons who are aged 10 and 12. Her rent is £83.50 per week and she receives £10 in Housing Benefit (Housing Benefit eligible rent is £83.50). Under the new rules her children are expected to share a bedroom and therefore she is under occupying the property by one bedroom. This means that her Housing Benefit will be reduced by £11.69 per week (14% of £83.50).

Derby Homes Offer a range of schemes if you are interested in downsizing so you won't be under occupying your property.

Click here to find out more. Alternatively you may wish to consider taking in a lodger, please view our Lodger Factsheet document on the top right.

Benefit Cap

From 2013 there has been a limit to the amount of benefit that can be claimed. Single people without children have their benefit capped at £350 per week and couples (with or without children) and lone parents have their benefit capped at £500 per week.

Benefits affected by the Benefit Cap will include:

  • Bereavement Allowance
  • Carer’s Allowance
  • Child Benefit
  • Child Tax Credit
  • Employment and Support Allowance (except where it is paid with the support component)
  • Guardian’s Allowance
  • Housing Benefit
  • Incapacity Benefit
  • Income Support
  • Jobseeker's Allowance
  • Maternity Allowance
  • Severe Disablement Allowance
  • Widowed Parent’s Allowance
  • Widowed Mother’s Allowance
  • Widow’s Pension
  • Widow’s Pension (age-related)

Claimants who are entitled to Working Tax Credit, Disability Living Allowance (changing to Personal Independence Payment from April 2013), Attendance Allowance, the support component of Employment and Support Allowance, Industrial Injuries Benefits or War Widows and Widowers pension will be excluded from the benefit cap. People who have been in employment for 52 weeks or more prior to claiming benefit will be exempt from the Benefit Cap for up to 39 weeks.

Personal Independence Payment (PIP)

From April 2013 Personal Independence Payment, has started to replace Disability Living Allowance (DLA) for disabled people aged 16 to 64. However, Disability Living Allowance will continue for children up to the age of 16.

There is no automatic entitlement to Personal Independence Payment. Entitlement is not based on your disability or illness. It is based on your personal circumstances and what help you need to be able to live independently. The only exception is for people who are terminally ill and who are not expected to live for more than six months.

Universal Credit

Universal Credit is a new benefit that will mean one payment covering a number of benefits that may be received. This includes Housing Benefit, Jobseekers Allowance(income based), Income Support, Employment & Support Allowance, Working Tax Credit and Child Tax Credit.

For more information visit our Universal Credit page.

Changes to Non-Dependent Deductions after Universal Credit

When claimants move over onto Universal Credit Housing Cost Contributions will replace Non-Dependant Deductions. There will be one flat rate deducted from the Housing Allowance element of Universal Credit for each non-dependant aged 21 and over. This single flat rate is likely to be around £65 per month.