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The Housing Benefit Regulations

Background: 

Housing benefit is available to help people on low income with their rent, and many millions of tenants in both public sector housing and also in the private rented sector currently receive help in this way.  The original housing benefit system was introduced in the early 1980s, and was most recently revised in 2008 following the Housing Benefit Regulations 2006.

Since 7th April 2008, two slightly different housing benefit systems have been operated in conjunction, in order to allow an orderly transition between the old system and the newly implemented system.

Claimants who claimed housing benefit before April 2008; housing association tenants and other claimants living in social housing are paid Rent Allowance (RA). Under the RA system, tenants with similar housing needs receive different rent levels within the same local area, and also often receive different standards of accommodation.

However, where housing benefit is claimed after April 2008, if the landlord is in private sector housing the claimant will receive Local Housing Allowance (LHA). The LHA system is designed to provide a fairer and simpler system to pay housing costs for private sector lettings, by standardising the housing allowance that is payable within the same local area. These two systems have run on in parallel for a transitional period, and the Department for Work and Pensions has not yet defined how long the RA system will continue to operate.

In this factsheet, rules specific to Rent Allowance will be indicated as RA, and those relating to the Local Housing Allowance will be shown to be LHA. Where the rules are the same for both schemes, a reference to ‘housing benefit’ refers to both.

Rent Allowance: 

Although all new claims for housing benefit for the majority of private sector lettings will be processed under the new LHA system, existing claims started before 7th April 2008 continue to run on under the previous RA system. Under the RA system, when assessing a housing benefit claim, local authorities had to refer all claims to the Rent Officer, who then used local knowledge or visits to the property to determine the appropriate level of RA payment to be made to the claimant. The Rent Officer considered factors such as the rent being sought and the services to be provided by the landlord, the number of rooms in the dwelling, the local rent levels, how many persons comprise the household and the terms of the tenancy. This created an individual amount of RA payment for each property.

Local Housing Allowance: 

Unlike the RA housing benefit system, which is specific to each individual property, the LHA is a general allowance rate which is based on an average rent level for the locality. The needs of the claimant are assessed according to pre-defined categories (principally the number of bedrooms the claimant requires), and the LHA is paid according to the average local rent level in the area in which the claimant intends to live. The jurisdiction of each local authority is divided into Broad Rental Market Areas (BRMA), and the average rent level of each one is researched and determined. This average rent level is central to determining the amount of housing benefit that a claimant can receive under the LHA system. It means that tenants in the same circumstances and living in the same BRMA will be entitled to the same rate of LHA, rather than this differing between claimants.

For further information about the LHA system, please see Factsheet No. 15a.

Eligibility: 

The purpose of the housing benefit allowance is to assist in the payment of rent or charges for the dwelling that is normally occupied as the eligible claimant’s home. A person will be eligible to apply for housing benefit where:

  • They are liable to pay charges in respect of their home,
  • They are on a low income (usually because they are unemployed), and
  • Their savings and other capital assets are not worth more than £16,000.

EXCEPTIONS. In certain circumstances, the person liable for the payment of rent will not be eligible to claim housing benefit, even if their income is low enough to qualify. These are:

  • CLOSE RELATIVE exclusion – a person who lives with a close relative who is their landlord is not entitled to receive housing benefit. However, a person who rents a house from a close relative may receive housing benefit, as long as they do not reside together.  A close relative is deemed to be a 
    1.  
      1. parent or step-parent
      2. brother or sister
      3. son or daughter (or step-son or step-daughter)
      4. parent-in-law, son-in-law or daughter-in-law, and
      5. partner of any of the preceding list of people.
            • NON-COMMERCIAL BASIS exclusion – housing benefit is usually payable only to tenants under a commercial arrangement. Even if it is commercial, an arrangement can be ineligible if it is set up to utilise the benefits system. Housing benefit is not payable where the tenancy is not conducted on a commercial basis, such as where the tenant is a close friend of the landlord and is charged only a nominal amount.

            Entitlement Rules: 

            A claim for housing benefit can be made up to 13 weeks in advance of the expected eligibility date, even though payments will not be made until the claimant becomes eligible. This may be useful in situations such as imminent redundancy, where an employee has been given several weeks notice and knows that they will be eligible to claim housing benefit as soon as their employment ceases.

            Entitlement to housing benefit usually begins on the Monday at the start of the first benefit week that follows the day of the claim (even if the claim day is a Monday). This assumes that rent is payable weekly or a multiple of weekly, such as fortnightly or every four weeks.

            However, the entitlement of a person who is eligible for housing benefit and becomes liable for housing costs for the first time will start in the same week as the liability begins, provided that the claim for housing benefit is made in this same benefit week as the liability begins. This may mean that the claimant is entitled to a full week’s housing benefit, even if the tenancy did not begin until part-way through the week. If the rent is due at some other interval, the entitlement will begin on the same day as the liability actually begins.

            Where the claimant also claims Income Support or Job Seekers Allowance, the effective claim date may be put back (by up to 4 weeks) to the beginning of this claim.

            Housing benefit is usually only payable on the dwelling that the eligible claimant lives in as their main home. There is, however, a limited exception where a tenant’s move to another home without providing the requisite notice to the landlord is unavoidable and the local authority decide that the tenant could not have foreseen the dual liability which would result.

            Applying for Housing Benefit: 

            The person who must apply to their local authority for housing benefit is usually the person who is liable for the rent, so this is generally the tenant or the prospective tenant. If two people live together (either as a married couple, unmarried couple or couple in a civil partnership), only one of these people may apply for housing benefit.

            All claims must be made in writing, either in the form of a letter to the local authority or by completing a claim form provided by the local authority. The date on which the local authority receives the written claim is important, as this determines the date from which benefit can usually be claimed.

            Where a person is applying for income support or jobseeker’s allowance, they will automatically be invited by the Job Centre or benefits agency to claim housing benefit at the same time (using form NHB1).

            The regulations state that the claim should be decided within 14 days, or as soon as practical thereafter. The first payment of housing benefit should be paid to the claimant within 14 days of the completed claim being received.

            Backdating a Claim: 

            A claim for housing benefit can be backdated for a maximum of 3 months for those who have reached the qualifying age for a state pension, and 6 months for claimants of working age. However, this will apply only in respect of weeks for which the claimant can show that he had continuous good cause for not making a claim. This test is interpreted strictly, so housing benefit will not be backdated because the claimant ‘did not get around’ to making his claim at an earlier date. A good reason for not making a claim may be that the claimant was waiting for a decision about another benefit, or that he was unwell and had no one to act on his behalf. Illness must be continuous; merely intermittent bouts of illness will not be sufficient.

            Temporary Periods of Absence: 

            In certain circumstances, housing benefit may be paid for a period of up to 13 or 52 weeks where the claimant tenant is temporarily absent from the property they usually occupy as their home but they intend to return to it within that time period. Typical examples of a short period of absence may be where the claimant is detained in custody pending sentence or is serving a short prison sentence, or the claimant may remain entitled to housing benefit where they are detained in custody on remand pending trial or undergoing an extensive period of hospitalisation for up to 52 weeks.

            Confidentiality: 

            Local authorities are expected to regard all information about individuals, including the fact that they have claimed housing benefit, as being held in strict confidence. It is, therefore, entirely possible that a tenant may receive housing benefit without the landlord’s knowledge. The local authority can check facts with a third party only with the written agreement of the claimant. There are, however, a number of exceptions, such as where the rent is being paid direct to the landlord.

            Direct payments: 

            The RA system allows landlords and tenants to choose to have the housing benefit paid straight to the landlord. If there are rent arrears of eight weeks or more, the local authority is obliged to make these payments to the landlord.

            Under the LHA system, however, direct payments to landlords are discouraged and are no longer available at the option of the landlord or tenant. The intention is to make claimants take responsibility for budgeting for, and paying, their own rent, so as to discourage welfare dependency and the opportunity for overpayment to landlords. However, safeguards have been built into the LHS system in respect of persons who are unable to manage their own affairs or are not sufficiently trustworthy. It is possible to apply to the local authority to make LHA payments directly to the landlord where the claimant:

            • is likely to have difficulty managing their own affairs,
            • has built up rent arrears of eight weeks or more, or
            • rent arrears are being paid by deductions from the claimant’s Income Support or Jobseeker’s Allowance.

            Duty to Report Change of Circumstances: 

            Landlords and agents in receipt of direct payments are under a duty to report in writing to the local authority any changes of circumstances that may affect their claimants’ entitlement. They must also supply information relevant to the circumstances of the letting and their interests in the property to the local authority on demand.

            The claimant also has as general duty to report any change of circumstances to the local authority. These duties aim to reduce the amount of housing benefit fraud.

            Recovery of Overpayments: 

            Overpayments of housing benefits generally occur either as the result of an error by the local authority or benefits agency, a change in circumstances or because of an erroneous or fraudulent claim. The housing benefit legislation allows overpayments to be recovered from the person to whom they were paid, such as a landlord or agent who received it directly. Recovery can take the form of a statutory demand, or may even be recovered from payments being made to the same landlord or agent on behalf of a different claimant.

            For tenants in the private sector, the only situation in which an overpayment will not be recoverable is where it resulted from a mistake made by the local authority, benefits agency or employment service and the fact that there had been an overpayment could not have reasonably been known.

            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.

            Local authorities have the power to obtain certain information from landlords. 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 result in 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 affect the claimant’s 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 proper 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.

            In an attempt to reduce the reoccurrence of fraudulent overpayments, regulations now require that post offices and Royal Mail do not redirect mail that is sent by the Benefits Agency or housing benefits office. Such correspondence must be returned to the benefits office concerned.

            Persons suspected of benefit fraud can be reported to the National Benefit Fraud Hotline at NBFH, PO Box 224, Preston, PR1 1GP, on 0800 854440 or online on the Department for Work and Pensions website www.dwp.gov.uk

            Related Regulations: 

            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.org.uk
            • OPSI: The Office of Public Sector Information provides a downloadable version of the Regulations www.opsi.gov.uk
            • HMSO:  A hard copy of the Regulations 1989 is available from HMSO Publications Centre, PO Box 276, LONDONSW8 5DT. 0870 600 5522
            • The Rent Officer Service (in local telephone directory under "Rent Officer")
            • The Letting Centre Letting Handbook.  Chapter 15: Housing Benefit
            • Factsheet No. 15a on the Local Housing Allowance published by the Letting Centre
            • The Letting Centre, website: www.letlink.co.uk

             

            This summary is intended to assist landlords and letting agents to understand the effect of the Regulations.  It is not an authoritative interpretation - this is a matter for the courts.  For more detail, you should refer to the text of the Regulations themselves.