How housing benefit is calculated

Stages of housing benefit calculation include considering the applicable personal allowances, income, rent or local housing allowance rate, and non-dependants.

This content applies to England

HB calculation stages

The maximum housing benefit a claimant is entitled to is calculated by completing the following stages:

  • the claimant's applicable amount is calculated by adding together the relevant 'personal allowances' and 'premiums' set by the Department for Work and Pensions.[1] The purpose of this stage is to establish the basic financial needs of the claimant and any partner and dependent children, in order to compare them with the income available to meet them

  • income is assessed according to the rules (see Capital and income). This includes any income deemed to be received from the claimant's capital (if they have capital). If the claimant lives with a partner, the income and capital of both will be assessed together for housing benefit purposes

  • the eligible rent or local housing allowance rate (see How LHA is calculated) is established

  • any non-dependants in the household are taken into account (see Non-dependant deductions)

Different rules for different HB claimants

Once the above amount of housing benefit is calculated:[2]

  • if the claimant is on income support, income-based jobseeker's allowance, pension credit (guarantee credit) or universal credit, the claimant is awarded 'maximum housing benefit'. This means their full eligible rent minus any non-dependant deductions

  • if the claimant is not on one of those benefits and their income is lower than their applicable amount (or exactly equals it), the claimant is awarded maximum housing benefit (as above)

  • if the claimant is not on one of those benefits and their income is greater than their applicable amount, the claimant is awarded maximum housing benefit (as above) minus 65 per cent of the difference between the income figure and the applicable amount figure

Benefit cap

There is a maximum amount of benefit that a claimant of working age and their household can receive.[3]

The benefit cap applies to a claimant's or household's combined income from benefits, including housing benefit. Where those benefits total more than the cap amount, housing benefit is reduced accordingly.

Revision of HB decisions 

After the local authority has made a decision regarding a claimant's entitlement to housing benefit it can be revised or superseded.[4] A revision or supersession could either increase or decrease the amount of a claimant's entitlement.

Revision

A decision is revised when it was wrong from the start. The new decision replaces the original decision and takes effect from the date of the original decision.

Supersession

A decision is superseded when the claimant's circumstances change. The new decision usually takes effect from the Monday after the change occurred.

Pre-tenancy determination

Tenants who may be subject to restrictions on the rent they can claim for can apply to the local authority for a pre-tenancy determination, which sets what rent figure will be used in calculating housing benefit.[5] The tenant has to complete and sign a form, which also has to be signed by the landlord. The local authority must refer the rent to the rent officer within two working days. The rent officer must respond within five working days (and usually does so much more quickly).

This provision is intended to assist tenants in making decisions about moving into properties. If the tenant moves in and subsequently claims housing benefit, then the figure given in the pre-tenancy determination will be the rent that is used when housing benefit is calculated. The pre-tenancy determination may not, therefore, be the actual level of housing benefit awarded.

Since the introduction of the Local Housing Allowance scheme and the publication of LHA rates it is no longer necessary for most private tenants to apply for a pre-tenancy determination.

Last updated: 20 April 2021

Footnotes

  • [1]

    reg 22 and Sch.3 Housing Benefit Regulations 2006 SI 2006/213; reg 22 and Sch.3 Housing Benefit (Persons who have attained the qualifying age for pension credit) Regulations 2006 SI 2006/214.

  • [2]

    s.130(1) of Social Security Contributions and Benefits Act 1992; regs 70 and 71 Housing Benefit Regulations 2006 SI 2006/213; regs50 and 51 Housing Benefit (Persons who have attained the qualifying age for pension credit) Regulations 2006 SI 2006/214.

  • [3]

    regs 75A to 75G Housing Benefit Regulations 2006 SI 2006/213 as inserted by Benefit Cap (Housing Benefit) Regulations 2012 SI 2012/2994; see also ss 96 and 97 Welfare Reform Act 2012; art 2(2)(b) Welfare Reform Act 2012 (Commencement No.5) Order 2012 SI 2946/2012.

  • [4]

    Sch.7 Child Support, Pensions and Social Security Act 2000.

  • [5]

    reg 14(1)(e) Housing Benefit Regulations 2006 SI 2006/213; reg 14(1)(e) Housing Benefit (Persons who have attained the qualifying age for pension credit) Regulations 2006 SI 2006/214.