Universal credit housing costs element payment condition
The housing cost element under universal credit can be claimed for rent payments and service charges.
Payments covered by the universal credit housing cost element
To meet the payment condition the payment must be made in respect of a property that the claimant occupies as their home.
These are defined as:
payments for a license or other permission to occupy accommodation
rent payments and/or mooring charges for a houseboat
rent payments and/or site charges for a caravan or mobile home
occupation payments by residents of almshouses
Mesne profits and use and occupation charges
Mesne profits are payments due to a landlord where a tenant remains in occupation after the tenancy has expired. This can happen, for example because the tenant's notice to quit has expired but they remain in occupation, or the occupier has basic protection and remains in occupation after a possession order.
Use and occupation charges may be made where a landlord allows a former tenant to remain in occupation on a temporary basis.
The Universal Credit Regulations, in contrast to the rules on housing benefit, are silent on whether these types of payment can count as rent, and in relation to mesne profits, guidance specifically suggests that they cannot.
DWP have stated that they expect that in most cases mesne profits and use and occupation charges would be 'more likely to appear as rent or a payment for a licence ... to occupy'. Advisers should therefore seek evidence of an agreement that these monies will be paid and can then argue that a licence has been created on that basis.
Payments not covered by the housing cost element
The following are excluded from being covered by the universal credit housing costs element:
fees for tents or tent sites
rent or licence fees for accommodation provided to people granted bail, or in 'approved premises', that is in connection with their rehabilitation or supervision in relation to a conviction
payments for care homes
payments towards the capital of a mortgage for service charges relating to the provision of food, medical services or personal services (including personal care)
rent or fees 'specified accommodation' and 'exempt accommodation'
payment for temporary accommodation where rent paid to a social landlord
Universal credit claimants cannot receive a housing costs element in respect of specified or exempt accommodation.
Exempt accommodation is a form of specified accommodation. See Benefit cap for a definition of these terms.
Claimants may be entitled to housing benefit instead.
The DWP has published guidance for local authorities who decide that a claimant’s accommodation does not meet specified accommodation criteria for housing benefit.
With effect from 11 April 2018, universal credit claimants cannot receive a housing costs element in respect of temporary accommodation where rent or a licence fee is payable to a local authority or a private registered provider of social housing. Claimants must claim housing benefit instead. Temporary accommodation is defined as accommodation secured by a local authority in order to meet its duties under a homelessness application or under the various powers, for example to make accommodation available to prevent or relieve homelessness or to accommodate pending review.
A universal credit claimant who was already receiving a housing cost element in respect of relevant temporary accommodation on 11 April 2018 will continue receiving this until either:
the rent or service charges changes
they are no longer entitled to the housing cost element, for example because they move out of the accommodation
After that point, they can claim housing benefit if eligible.
Universal credit housing cost element for service charges
Only certain payments for services or facilities are eligible.
For the payment to covered by the housing cost element of universal credit it must:
be payable as a condition of occupying the home
be of a reasonable amount and relate to services or facilities which are reasonable to provide
fall within one of the specified categories
The specified categories are:
external cleaning of windows, only in relation to upper floors in a multi-storey building (what constitutes an 'upper floor' is yet to be defined)
internal or external repair of shared ownership or owner-occupied property
payments for the general upkeep of communal areas, for example, cleaning and utilities payments
payments for basic communal services, for example refuse collection, lift maintenance and access to the building
payments for essential items provided with the accommodation, such as furniture and/or domestic appliances
DWP guidance for landlords lists eligible categories of service charges, as well as examples.
Rent reduction under incentive scheme
With effect from 30 April 2017, a reduction in a claimant's rent or eligible service charges under an approved tenant incentive scheme is to be disregarded when calculating the housing costs element. The scheme must be operated by a local authority or a private registered provider of social housing and approved by the Secretary of State.
The purpose of such schemes is to offer a financial incentive to tenants in social housing for managing their own rent payments and interacting digitally with the Department for Work and Pensions.
Mortgage interest payments
Payments towards interest on mortgages and alternative finance arrangements, for example, Islamic mortgages, are no longer paid as part of universal credit. With effect from 6 April 2018, they are made as a separate support for mortgage interest loan.
Last updated: 18 March 2021
s.11(1) Welfare Reform Act 2012.
Sch.1 para 2 Universal Credit Regulations 2013 SI 2013/376.
reg.12(c) and 12(d), Housing Benefit Regulations 2006 SI 2006/213.
F2043, Advice for Decision Makers, DWP, 22 March 2013.
Universal Credit and related regulations: Response to SSAC technical comments and policy points, DWP, 1 December 2012.
Sch.1 para 3 (a)-(g) and para 8 (6)(a)-(c) Universal Credit Regulations 2013 SI 2013/376.
para 3(h) and para 3A Sch 1 Universal Credit Regulations 2013 SI 2013/376 inserted by Housing Benefit and Universal Credit (Supported Accommodation) (Amendment) Regulations 2014 SI 2014/771; HB Circular A8/2014.
paras 8 to 11, LA Welfare Direct Bulletin 4/2019, DWP, April 2019. .
Sch 1 para 3B Universal Credit Regulations 2013 SI 2013/376 as inserted by reg 3(12)(b) Universal Credit (Miscellaneous Amendments, Savings and Transitional Provision) Regulations 2018 SI 2018/65.
reg 8(2) Universal Credit (Miscellaneous Amendments, Savings and Transitional Provision) Regulations 2018 SI 2018/65.
Sch.1 para 7(2)(a)-(b) Universal Credit Regulations 2013 SI 2013/376.
Sch.1 para 8(5) Universal Credit Regulations 2013 SI 2013/376.
Sch.1 para. 8(4) Universal Credit Regulations 2013 SI 2013/376.
Sch.4 Part 5 para 32A Universal Credit Regulations 2013 SI 2013/376 as inserted by Universal Credit (Tenant Incentive Scheme) Amendment Regulations 2017 SI 2017/427; ADM Memo 14/17, DWP.