We calculate Housing Benefit (HB) entitlement using rules defined by the government. A claimant who qualifies will get either maximum HB or partial HB. But these awards can then be further reduced by other rules such as the benefit cap and spare room subsidy.
This section give information about how HB is calculated and how the rules which limit the HB that can be paid affect that calculation.
Maximum HB
Where the claimant is entitled to
- Income Support, or
- income related Employment and Support Allowance; or
- income based Job Seekers Allowance,
or their income is less than the amount the government say they need to live on (see applicable amount), they are entitled to maximum HB - usually 100% of the maximum eligible rent (less any deductions for other adults living in your household).
Several new rules introduced in 2013 may restrict the maximum HB and the maximum eligible rent. Check the following to see if these affect you:
Partial HB
Where the claimant does not qualify for the maximum, HB is decided by comparing the income of the claimant and partner, in the case of couples, against their applicable amount.
Applicable amount - The applicable amount is an amount set by the government and it is what they say a claimant needs to live on to cover basic expenses such as food and fuel charges. It is made up of several elements depending on the claimant's circumstances, their household and any disabilities they may have.
Components- These are similar to applicable amounts, but only apply to you, if you get main phase contribution based Employment and Support Allowance (ESA). At the fourteenth week the Jobcentre Plus will decide if you:
- will continue to get ESA ; or
- will get the work related activity component; or
- will get the support component.
An amount equal to either the work related activity or support component is added to the basic applicable amount you are entitled to.
Several new rules introduced in 2013 may restrict the maximum HB and the maximum eligible rent. Check the following to see if these affect you:
The calculation of partial HB
Private rented sector claims
As the starting point of the calculation, we use the eligible rent from the Local Housing Allowance rates to decide the eligible rent. We then make deductions for non-dependent adults. Whatever is left is the maximum eligible rent.
Then 65% of your income above the applicable amount is taken away from the maximum eligible rent. The lowest amount a person could qualify for is £0.50 per week HB.
Example
A person's maximum eligible rent is £200 per week. This is the maximum HB they could get. They do not have any other adults living with them.
Their income exceeds their applicable amount by £10.00 per week.
Using the 65% of the income above the applicable amount, their maximum HB is reduced by £10.00 x 65% = £6.50. Their HB entitlement is £193.50 per week.
However, if either of the £350 or £500 Benefits Caps applies this will further reduce a person's partial HB.
Social rented sector claims
As the starting point of the calculation, we use the actual rent you are charged, less any charges for things like utilities and amenities that are not eligible for HB. We then make deductions for non-dependent adults. If they also fall under the rules which apply where they have a spare room subsidy this can reduce the maximum eligible rent. Whatever is left is the maximum eligible rent.
Then 65% of your income above the applicable amount is taken away from the maximum eligible rent. The lowest amount a person could qualify for is £0.50 per week HB.
Example
A person's maximum eligible rent is £100 per week. This is the maximum HB they could get. They do not have any other adults living with them.
Their income exceeds their applicable amount by £10.00 per week.
Using the 65% of the income above the applicable amount, their maximum HB is reduced by £10.00 x 65% = £6.50. Their HB entitlement is £93.50 per week.
However, if either of the £350 or £500 Benefits Caps applies this will further reduce a person's partial HB. They may also find their maximum eligible rent reduced under the spare room subsidy rules.
Rules which reduce HB
The details above outline the way we calculate HB entitlement. There some case which need to have any of the following specific rules applied. These are:
Benefit Cap
If you just want general information and useful contacts regarding the Benefit Cap starting from 15 July 2013, please download and print our Merton Council Benefit Cap Factsheet.
The DWP has also created the GOV.UK Benefit Cap webpage which also includes a Benefit Cap calculator, which you can use to estimate if you would be subject to one of the caps.
See Benefit cap rules for more details
Social rented sector - spare room subsidy
From 1 April 2013, new rules restrict the eligible rent if you are considered to be under-occupying your accommodation.
See Social rented sector spare room subsidy rules for more details.