Many will have probably heard that there are significant changes being made to regulations affecting tenants of working age in receipt of Housing Benefit. These changes will come into effect from 1st April 2013.
Essentially, there will be a cap on HB entitlement depending on the amount of bedrooms a particular household requires. This does not mean the number of bedrooms a property actually has and accordingly, HB will be reduced where it is considered a household is under occupying.
The calculation for the number of bedrooms required is as follows:
• One bedroom for each individual/couple over 16
• One bedroom for two same sex children under 16
• One bedroom for any two children under 10
• One bedroom for a non resident overnight carer of a disabled tenant or partner.
Where a household is considered to be under occupying by one bedroom the eligible rent for the purposes of HB will be reduced by 14%. This reduction is 25% where under occupation is of two or more bedrooms. Any resulting shortfall will need to be paid by the tenant themselves.
In addition to this, further regulations coming into force in April cap the overall benefit to a household including HB. These changes will affect Bromley, Croydon, Enfield and Haringey from April 2013, but will be adopted nationally by September 2013. Whilst this does not apply to everyone in receipt of benefit (for instance working tax credit and pension credit are not included), it does cover the more common benefits including JSA, income support, employment support allowance, child benefit, child tax credit and carers allowance.
The maximum benefit paid to a family will be £500.00 per week and to an individual £350.00. Clearly, depending on the other benefits being received, this is likely to result in a reduction in HB entitlement.
The obvious options available to tenants finding themselves in this position include:
• Move to a smaller property (“downsize”)
• Make up the shortfall between the rent and HB
• Enter into employment
• Rent out any spare rooms
• Ask any other adult residing at the property to contribute to the rent
With regard to downsizing (which only realistically applies to tenants of local authorities or other social landlords) the tenant would need to apply to join the transfer list and there is a possibility that a mutual exchange could be arranged. In addition, given the lack of social housing, a local authority may be willing to cover removal expenses or even provide a downsizing grant. Clearly, this would be a matter for the individual local authority.
With regard to renting out a room, this will often require the consent of the landlord and should therefore be discussed with the landlord/housing officer to avoid any subsequent complications/consequences.
Finally, a further, much heralded, change to benefits generally is expected at the end of 2013. This involves most benefits (JSA, income support, ESA, etc) being replaced by Universal Credit. One consequence of this is that it will usually be paid directly to the tenant and HB can no longer be paid directly to the landlord/local authority. It will therefore be the responsibility of the tenant to ensure that the HB is forwarded to cover the rent.
These changes will affect tenants in both social and privately rented accommodation together with landlords.
Hanne & Co has a housing department dealing with all aspects of Housing Law and acting for both tenants and landlords. Should you be a tenant or landlord with concerns over how the new regulations will affect you, do not hesitate to contact us to discuss on 020 7228 0017 or email firstname.lastname@example.org