The Housing Benefit Regulations

Background:

Housing Benefit (HB) is available to help people on low income with their rent and about 750,000 private tenants currently receive help in this way.  Substantial changes were  made to the system in 1996 and 1997 in an effort to reduce the spiralling social security costs and the incidence of fraudulent claims.  The amendments restrict the amount of benefit available to claimants who rent accommodation in the private rented sector and restrict further the amount of benefit that young, single people may claim.

Rent Restriction:

On 2 January, 1996 the Housing Benefit (General) Amendment Regulations were introduced.  These Regulations require that each new claim for housing benefit for private sector tenants be referred to the rent officer in order that an assessment for benefit purposes be made.  Tenants who were in receipt of benefit prior to 2nd January, 1996 will not normally be subject to the changes provided certain criteria are met (see 'exclusions' below).  There is also protection in certain cases where one member of a couple dies or leaves the household or where a claimant's home is made uninhabitable (e.g. fire or flood) - see 'Special Cases'

EXCLUSIONS:  The above rent restrictions under the Regulations do not apply to the following:

• tenants of deregulated private sector accommodation who were receiving housing benefit up to the date of changes on 2 January 1996, unless they subsequently change their address or cease to receive HB for a period of more than 4 weeks.

• claimants who could afford the rent when the liability was first acquired. A period of 13 weeks from the first day of entitlement will be allowed to elapse before applying any restriction on the housing benefit.

• people who rent their home from a registered Housing Association, unless the local authority considers the rent to be unreasonably high or the accommodation over-large, and therefore makes a referral to the rent officer.

• claimants residing in property where some level of care, support or supervision is provided, the property may not be affected by the changes. This only applies to accommodation provided by a Housing Association, registered charity, or voluntary organisation, or to those hostels for the homeless which are funded by the Resettlement Agency. Again, the Housing Benefit office can tell you more about this.

• people who rent their home from the local authority

• all other cases where there is no duty to refer to the Rent Officer Service.

Pre-Tenancy Determinations:

Also from 2 January 1996, the Rent Officer Service has been able to provide prospective claimants who are thinking of moving, and existing housing benefit claimants who are thinking of renewing their tenancies, with an indication of the maximum rent which has been used to calculate housing benefit for a particular property.   This is called a pre-tenancy determination.

A pre-tenancy determination  (PTD) can only be provided before a tenancy is taken up or renewed and before a new or renewed claim is made for housing benefit.  Tenants must apply for a PTD through their local authority (not direct to the Rent Officer Service) and the application form must carry the written consent of the landlord in the event that a Rent Officer needs to visit the property for determination.  The authority will forward the application form to the Rent Officer Service for determination.

Appropriate Rent:

All parties - the tenant, the landlord and the local authority - will be notified of the Rent Officer's determination.  The service is provided without charge and each PTD is valid for 12 months from the date it is made, and for the terms of the tenancy for which it is issued.  The PTD does not guarantee entitlement to housing benefit or that housing benefit will meet the maximum rent figure.  This is because the normal conditions of entitlement must first be met, and income such as earnings, may reduce the level of benefit.  But the PTD will show the maximum eligible rent for housing benefit before any calculations connected with the claimant's personal circumstances are taken into consideration.

Local authorities are required to refer private sector tenancies to the Rent Officer Service.  If the Rent Officer considers that the rent being asked by the landlord is reasonable, he will confirm this to the local authority.  In this case, the contractual rent (i.e. the rent agreed in the contract between landlord and tenant) less any ineligible charges will be known as the Appropriate Rent. (AR)

If however, the rent is not reasonable, the Rent Officer will determine:

a rent which the landlord could reasonably expect to obtain for the accommodation; and

if the accommodation is too large for the household's needs, a notional rent for accommodation of a suitable size; and

if the rent is exceptionally high, a notional high rent figure.

The lowest of these determinations (less any ineligible charges) will then be the Appropriate Rent.

Local Reference Rent:

A local reference rent (LRR) will be established by the Rent Officer for each individual case by determining the mid-point of a range of rents for properties with the same number of rooms in the locality.  Studios, bedsits and 'bed and breakfast' accommodation form separate categories of their own.  The 'locality' will be determined by the Rent Officer based on expert judgement and the housing market in the area.  Locality is specific to each property, is flexible, reflects the local property markets and adapts to any changes that may take place.

Maximum Eligible Rent:

The maximum eligible rent for housing benefit will be calculated by the local authority as follows:

Where the appropriate rent is at or below the local reference rent, the maximum eligible rent for housing benefit will be the appropriate rent. (Note: In this case, the Rent Officer will not advise the local reference rent)

Where the appropriate rent exceeds the local reference rent, the maximum eligible rent for housing benefit will be the local reference rent

There will be an overall maximum eligible rent for housing benefit of twice the local reference rent.

The following examples show how the rents are figured in practice:

Appropriate rent less than local reference rent

Contractual rent         £ 50

Appropriate rent        £ 45

Local reference rent  £ 55

Maximum eligible rent for housing benefit:     £ 45

Appropriate rent equal to local reference rent

Contractual rent         £ 50

Appropriate rent        £ 45

Local reference rent   £ 45

Maximum eligible rent for housing benefit:     £ 45

Appropriate rent more than local reference rent

Contractual rent          £ 55

Appropriate rent         £ 50

Local reference rent    £ 45

Maximum eligible rent for housing benefit:     £ 45

Single Room Rents:

The single room rules were introduced on 7th October, 1996 and relate to housing benefit claims from  'young individuals' (single persons under 25 years old) and require a local authority to limit the amount of housing benefit that a young individual is eligible for to a single room rent (SRR). 

The single room rent is the general level of rent for exclusive use of a single room with shared use or no use of a kitchen and shared toilet.  The single room rent is calculated in a similar way to the local reference rents and is determined as follows:

The Rent Officer will be responsible for determining the single room rent, and in doing so will use the following formula:-

 R = H + L

2

Where:

R  =  the single room rent

H  =  the highest rent that the landlord could reasonably expect to obtain and that is not unreasonably high

L =  the lowest rent that the landlord could reasonably expect to obtain and that is not unreasonably low

Fifty Percent Top-up:

Amendments made which took effect on 7th October, 1997 removed the 50% top up benefit.  Prior to this date, where the appropriate rent exceeded the local reference rent, housing benefit would pay the local reference rent plus 50% of the difference between the LRR and the AR.  Those who were already receiving the top up when the new rules came into force will continue to receive the top up until there is a relevant change in circumstances or a change of address. 

Exceptional Hardship:

The local authority can make extra payments to claimants whose rent is restricted by rules introduced since 2 January, 1996 where their entitlement does not cover their full contractual rent.  This discretionary payment may only be made in cases of exceptional hardship to the claimant or the claimants family and the hardship must be brought about by the restriction in housing benefit. Funding for these extra payments is extremely limited and  once all the funds have been exhausted, additional payments cannot be made regardless of the claimants circumstances.

Ineligible Costs:

The following charges (if included in the rent) shall not be eligible for Housing Benefit:

• Costs involved with heating, lighting, electricity, cleaning and any other fuel costs.

• Costs that include telephone rental, TV licensing, meals, laundry and other such extra services.

How long will it take ?

Where a rent must be referred to the Rent Officer for determination, the local authority must forward the application within two working days of receipt of the form.

Rent Officers are required to turn around pre-tenancy determinations within five working days and other decisions within 25 working days.

Special Cases:

There are also some special cases which may not be affected by the restricted arrangements.  If the claimant has recently taken over the tenancy from a member of the family who has died, or from a partner who has left the household, the changes may not apply or a rent restriction may be deferred. If the claimant has had to move because of damage to the home, there may be protection from the changes if the claimant has been getting benefit before 2 January 1996.  The Housing Benefit office will have more information about this.

"Vulnerable groups" as defined in the 1987 regulations will no longer exist, and there will be substantially less support for these types of claimants.

Appeal Rights:

Housing benefit claimants can ask the local authority for  a statement of reasons to explain their housing benefit determination.  If the claimant disagrees with the benefit determination, the local authority can be asked to look at it again.

Where the claimant makes representations about a Rent Officer's determination, the local authority must ask the Rent Officer Service for a re-determination and provide the Rent Officer with a copy of the claimant's representations.  Ask your local authority for a leaflet about the appeal process.

The determinations of Rent Officers are subject to the re-determination process as outlined above, and neither an authority nor a Review Board can change these figures on review or further review.  Despite this, the tenant still has a right to request such reviews, and the review or further review would check that all calculations based on the rent officer determinations are correct, as well as any other matter determined by the authority.

Anti Fraud Measures:

The Social Security Administration (Fraud) Act 1997 contains provisions aimed at reducing the incidence of landlord and tenant fraud regarding housing benefit claims.  The following three sets of regulations came into force on 3rd November, 1997.

The Housing Benefit (Recovery of Overpayments) Regulations 1997 provides extra powers of recovery to the local authority where payment of housing benefit is being made direct to the landlord or agent.  A local authority can not only recover overpayments from direct payments made on behalf of the claimant but also from benefit payments made on behalf of a different claimant but to the same landlord or agent.  Where this type of recovery is taking place, the claimant from whom the deduction was made would not be considered to be in arrears even though the landlord or agent would not receive the full amount of rent due.

The Housing Benefit (Information from Landlords and Agents) Regulations 1997, requires that where requested the landlord or agent must provide information relating to all properties owned by the same landlord where the landlord is receiving direct payments and where the authority is suspicious.  This information can then be checked against information already held.  Failure to comply with this requirement can attract a fine of up to £1,000.

The Housing Benefit and Council Tax Benefit (General) Amendment (No. 2) Regulations 1997 place a responsibility on landlords in receipt of direct payments to report any change in circumstances to the local authority or housing benefit office.  The local authority has a duty to inform landlords of their obligation to report changes of circumstance that may effect the claimants entitlement to benefit.  The Regulations also require that the local authority only permit direct payment to be made to a landlord who is a fit and property landlord.  Authorities now have the power to suspend payment of housing benefit where a question has arisen as to whether the tenant is entitled to housing benefit, until the question is resolved.

Related Regulations:

Social Security Contributions and Benefits Act 1992

The Housing Benefit (General) Regulations 1987

The Housing Benefit (Permitted Totals) Order 1995

Sources for Further Information:

• The Housing Benefit Office of the local authority for the area concerned
• The Local Government Ombudsman (if government departments fail to fulfil their duties): 0845 602 1983 London 020 7217 4620 www.lgo.gov.uk
• The Rent Officer Service (in local telephone directory under "Rent Officer")
• The Letting Centre Letting Handbook.  Chapter 15: Housing Benefit
• HMSO: Copies of the Housing Benefit (General) Amendment Regulations.  SI 1995 No.  1644 www.opsi.gov.uk
• The Letting Centre, website: www.letlink.co.uk

NB.  Details in this factsheet is based on information given to us by DWP and various local councils.  Minor details may change according to the individual implementation by each specific local authority.

Our thanks to Stephen Bryant, chief Rent Officer for the Devon Registration Area, for his assistance in preparing this fact sheet