From April 2013, major changes are being made to benefits that could mean you receive less housing benefit. Find out about the 'bedroom tax', the benefits cap and changes to council tax benefits.
Are you affected by housing benefit changes? See our Shelter advice leaflet for more information.
'Bedroom tax' from April 2013
From April 2013, council tenants and housing association tenants will have their housing benefit entitlement reduced if the council decides their home is too big for their needs. This is often called the 'bedroom tax' or 'under-occupancy rule'.
The amount of rent you can claim housing benefit for will be reduced if you have one or more spare rooms. This means you will have to pay more of the rent yourself.
The amount of rent used to calculate how much housing benefit you're entitled to (your 'eligible rent') will be cut by a fixed percentage:
- 14% if you have one extra bedroom.
- 25% if you have two or more extra bedrooms.
'Eligible rent' is not always the same as the amount you have to pay to a council or housing association landlord. For example, water and heating charges for your home don't usually count towards 'eligible rent'.
Find out more about how housing benefit is calculated.
See our page on the bedroom tax from 2013 to find out more about how you could be affected.
The benefit cap limits total benefits from April 2013
From 15 April 2013, a new cap was introduced on the total amount of welfare benefits that can be claimed by people of working age. It was first introduced in the London boroughs of Bromley, Croydon, Enfield and Haringey, and then extended to the rest of the UK by the end of October 2013.
Most benefits are counted, including housing benefit. The limits are:
- £500 per week for families with children
- £350 per week for individuals.
You will not get anything above these limits, even if you are assessed as needing more. There are some exemptions, however. For example, if you or anyone else in your household qualifies for working tax credits, the benefit cap won't apply to you.
You will continue to be paid the benefits you already claim as usual, apart from housing benefit. If your total benefits would take your income higher than these weekly limits, your housing benefit will be reduced.
It will be up to you to make up any shortfall in your rent from the other benefits you claim, income you receive from working or from other sources.
You are most likely to be affected by the benefit cap if you have a large family, particularly if you live in an area with high rents and you need a large home because of the number of children you have.
See our page on the benefit cap from 2013 to find out more about how you could be affected and how to get help.
Changes to help with council tax payments
You might get less help with paying your council tax bill after April 2013. This is because of recent changes that let councils decide who is entitled to a reduction in their bill.
Pensioners will not be affected by the new arrangements, but other council tax payers may have to pay a bigger share of their bill than before.
See our section on council tax to find out what help is available under the new 'council tax support' system.
What is the overall impact of these cuts?
If you are a council tenant or housing association tenant claiming housing benefit, the combined effect of these benefits cuts may mean that you will face money problems and risk falling into rent arrears. You may have to consider moving to a smaller home to avoid this. However, in many areas, there won't be enough spare council or housing association properties of the right size to allow tenants to move.
Get advice if you are worried about rent arrears or eviction – use our directory to find a local advice centre.
Private tenants who claim local housing allowance (the name of the housing benefit for people who rent privately) usually pay more in rent and, because of cuts to local housing allowance, may have to deal with a benefits shortfall too.
Whatever type of tenancy you have, remember that your first priority should always be to pay the rent. You could lose your home if you don't.
Use our budget calculator to see where your money is going, and find out if there is any way you can reduce your outgoings. You might be able to save some money by getting help with heating costs, or making your home more energy efficient.
You may also be able to claim a discretionary housing payment from the council to make up any shortfall of housing benefit.