Independence...Integrity...Value

Welfare Benefit System and Housing

December 2010

Thispaper summarises the current housing benefit system in the United Kingdom.

Housing Benefit is designed togive financial support to people who would otherwise have difficulty inaffording a home. Tenants on low incomes are eligible to apply for Housing Benefit,and can receive a payment that meets either all or part of their housing costs.In some circumstances service charges are also eligible for housing benefit.

Housing Benefit isadministered by District Councils in Shire County Areas, and by Metropolitan,London Borough or Unitary authorities in other areas. It is designed to givefinancial support to people who would otherwise have difficulty in affording ahome. Tenants on low incomes are eligible to apply for Housing Benefit, and canreceive a payment that meets either all or part of their housing costs. In somecircumstances service charges are also eligible for housing benefit. WhereHousing Benefit is paid to a Council Tenant, it is described as a ‘rent rebate’because rent is rebated by way of a book entry in the Council’s accounts. WhereHousing Benefit is paid to a Housing Association or private sector tenant it isknown as a ‘rent allowance’. In this case the Council usually pays benefitsdirectly to the landlord rather than to the tenant.

The amount of Housing Benefitpayable depends on the circumstances of the claimant, and their housing costs.The Housing Benefit rules and regulations are very complex. To be eligible toreceive Housing Benefit, a person’s income must be below a certain level andthey must pay a reasonable level of rent regarding the needs of their householdand the area in which they live (if the rent is considered to be too high it isnot eligible for benefit). The level of savings held by the claimant is alsotaken into account.

Tenants of housingassociations are subject to the same calculation of housing benefit entitlementas local authority tenants, but unlike local authority tenants they can insiston direct payment.

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