Calculating housing benefit for homeless hostels

When calculating housing benefit entitlement for a person who is staying in a homeless hostel, the local authority needs to work out the maximum amount that can be covered by housing benefit. This is called the ‘eligible rent’.

This is not always the full amount that a person pays to their landlord. How the eligible rent is worked out depends on the type of accommodation.

Some homeless hostels are classed as exempt accommodation.

Exempt accommodation is defined as accommodation which is provided by a non-metropolitan county council in England, private registered providers of social housing (PRPSH), charity or voluntary organisation where that organisation or someone acting on their behalf provides the claimant with care, support or supervision.[1]

The eligible rent for exempt accommodation is based on what are sometimes called the ‘old scheme’ rules.[2]

For exempt accommodation, there is no set cap on the amount of housing benefit the claimant can receive. The eligible rent is worked out on a case-by-case basis. The local authority must deduct any ineligible service charges, including charges for personal support and meals. It must also deduct any charges it considers to be excessive, for example if:[3]

• the accommodation is larger than is reasonably required

• the rent is ‘unreasonably high’ when compared with the rent that is charged for suitable alternative accommodation

• a rent increase is unreasonably high

When the hostel landlord is a local authority or a PRPSH, and it is not exempt accommodation, the eligible rent is the actual weekly rent, minus any ineligible service charges.[4]

The eligible rent is worked out using the rent referral rules when all of the following apply:[5]

• the hostel landlord is a charity or voluntary organisation

• the accommodation does not come under the definition of exempt accommodation

• the accommodation is not self-contained

• the accommodation provides board or facilities that are adequate for the needs of the residents for preparing food

Under the rent referral rules, any ineligible service charges must be deducted.

Guidance for determining the eligible rent for hostels and accommodation where the landlord provides board and attendance is included in the Rent Officer’s Handbook: Housing Benefit referral.

Local housing allowance rules

The local housing allowance (LHA) rules are used to calculate housing benefit when all of the following apply:[6]

• the hostel landlord is a charity, voluntary organisation or other private landlord

• the accommodation does not come under the definition of exempt accommodation

• none of the rent covers board and attendance

In one case it was held that a hostel resident's rent was subject to the LHA scheme, as none of their rent related to the provision of food or food preparation facilities.[7]

No deductions are made for ineligible service charges when the LHA rules are used to calculate housing benefit.