How housing and council tax benefit is calculated?

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Last revised: 27 October 2008

Housing Benefit is paid by the council to help people pay their rent.  Council Tax is paid to help people pay their council tax.  The rules about how much Housing and Council Tax Benefit you may get are complicated, but this page may be able to help.

Housing Benefit is calculated by looking at how much you can afford to pay towards your rent. The amount you will get will be the maximum rent that can be paid for your home minus the amount that you can afford to pay. Similarly Council Tax Benefit is calculated by looking at how much you can afford to pay towards your Council Tax. The amount you will get will be the maximum Council Tax that can be paid for your home minus the amount that you can afford to pay.

A deduction may be made from the maximum rent and council tax that can be paid if you have another adult living in your household such as an adult son or daughter.


How much can you afford to pay

There are specific rules that the council have to look at when they are deciding how much you should be able to pay towards your rent.

They should first look at how much money your household needs to live on each week, taking into account:

  • the number of people in your house,

  • the ages of the people in your house,

  • whether anyone in the house is sick or disabled, and

  • whether anyone is a full-time carer.

The rates are set by the Department of Work and Pensions each year and are intended to reflect basic weekly living expenses.  In practice you may feel the amounts are inadequate, nevertheless it is the figure we must use.

Income

They will then look at how much money there is coming in. This can include:

  • wages,

  • benefits and tax credits,

  • pensions,

  • rent from sub tenants or lodgers and

  • grants, bursaries and student loans.

Some income is disregarded i.e. Income Tax; National Insurance ; 50% of occupational pension contributions, some of your earnings, child maintenance, Disability Living Allowance and Attendance Allowance. If you pay for childcare while you work some of your income may be disregarded in the calculation of Housing Benefit. This only applies if you use registered Childcare and you work 16 hours or more per week if you are a lone parent, or both parents work 16 hours a week each, or one parent works 16 hours a week and the other is sick or disabled, in hospital or in prison.

.At Kennet District Council, war widows or war disablement pensions are disregarded through a Local Council Scheme as part of your income, resulting in a higher benefit payment

If you receive Income Support, Job Seekers Allowance (Income Based) or Employment Support Allowance (Income Related) then you are automatically entitled to maximum benefit.


Savings and investments

If you have any savings or investments these can be counted as income too. This includes redundancy payments. If you have savings of over £6,000, this will affect the amount of Housing and Council Tax Benefit you will get. If you have savings of £16,000 or more, then unless you are aged 60 or over and receive the guarantee credit of Pension Credit, you will not be entitled to any Housing Benefit or Council Tax Benefit.

Savings and investments can include items such as bonds, unit trusts, stocks and shares, any property or land that you own (other than the one you live in) as well as money held in banks and building societies.

There are certain circumstances where capital can be disregarded, for instance if you own a second property which is up for sale this can be disregarded for up to 26 weeks, if it is occupied by a relative who is aged 60 or over, or disabled then it can be fully disregarded as long as they are resident there.  For further details see our guide to Housing and Council Tax Benefit or contact us.


Non-dependant deductions

Your Housing and Council Tax Benefit may be reduced if you have someone living in your house who is:

  • not your husband, wife, civil partner or partner (including same sex partners), and

  • someone you do not claim Child Benefit for, and

  • over the age of 18.

It is assumed that these people can pay something towards your rent, whether they actually do or not.

The reduction of your Housing and Council Tax Benefit will depend on the other person's gross income. If they are not willing to give their income details to you, ask them to contact the Benefits department directly.

No deduction will be made if:

  • you are registered blind, or

  • you receive Attendance Allowance or the care component of Disability Living Allowance, or

  • the person living with you is a full-time student (unless they have full-time work during the holidays), or

  • the person living with you is under 25 and receiving Jobseeker's Allowance (income based), Employment Support Allowance (income related) or Income Support, or

  • the person living with you is receiving Pension Credit.


For more information on non dependants and the amount which can be deducted click here for our information leaflet

How much rent can be paid?