Benefit changes from 2013

Benefit cap

There will be a total benefit cap for couples and lone parents of £500 and a total benefit cap for single adults of £350 a week. These changes will apply from 15 July 2013. 

The Department for Work and Pensions will calculate the weekly income from benefits and inform local authorities who will reduce housing benefit in order to keep below the cap.

A household's combined income from job seekers allowance, income support, employment and support allowance, housing benefit, child benefit, child tax credit, carer's allowance and maternity allowance will be added together. If this exceeds £500 a week the housing benefit will be restricted until the £500 limit is not breached. With single individuals the limit will be £350 per week.

Calculate how you will be affected

Cap exemptions  

  • individuals on disability living allowance, personal independence payments or attendance allowance
  • war widows or those in receipt of widows pension
  • working tax credits
  • employment support allowance (support component)
  • pensioners - or couples where one is above pension credit age

individuals who have been working for 52 weeks when they claim benefit, who lost their job through no fault of their own, may be exempt from the cap for up to 9 months.

Under occupation

Size criteria rules will be introduced for working age claimants in the social rented sector from April 2013. 

If a tenant has a property which is too big for their needs by one additional bedrooms, their housing benefit will be reduced by 14%. 

If they have a property which is too big for their needs by two additional bedrooms their housing benefit will reduce by 25%.  

Whether a property is under occupied will be calculated using the following criteria 

Tenants will be awarded one bedroom for all of the following who live in their household:  

  • a couple
  • a person over 16
  • two children of the same sex aged under 16
  • two children of any sex who are younger than 10
  • any other single child under 16 

Extra rooms will also be allowed for the following 

  • armed forces personnel - adult children who are in the Armed forces, but who continue to live with parents will be allowed a room, even when deployed abroad on long term operations
  • disabled children - disabled children who can not share due to severe disability, where the other sibling would have their sleep regularly disturbed if they had to share a room, will be allowed an extra room
  • foster children - approved foster carers will now be allowed a room for a foster child, even if they do not currently have a child placed with them, so long as they have fostered a child in the last 12 months or become an approved foster carer in the last 12 months. Find out more about becoming a Hackney foster carer

Under occupancy and the benefit cap

If you are affected by under occupancy, and are looking to downsize please be aware that some social sector properties are now let on the new affordable rent tenure (of up to 80% of market rent levels). Due to the high levels of these rents, some households who accept these properties could be affected by the benefit cap, and have their housing benefit restricted. Before bidding on any property you should always consider whether you are affected by the benefits cap and whether you can afford to cover the shortfall on the rent. See our welfare reform tool for an example of the effect.

Private tenants receiving housing benefit paid under local housing allowance (LHA)

Since April 2011 the Government has introduced maximum caps on LHA rates, so that LHA can never be above a set amount, regardless of rent levels in an area.

From April 2014 the maximum LHA caps have been set at:  

  • £258.06 for a one bedroom property
  • £299.34 for a two bedroom property
  • £350.95 for a three bedroom property
  • £412.89 for a four bedroom property  

Since 2011 no household are entitled to more than the four bedroom rate regardless of their household size.

Where the LHA rates are below the maximum cap, they are no longer calculated using the mid point of local market rents.

Instead the LHA rate is calculated at the lower of:

  • the 30th percentile of local market rents (meaning that only 3 in 10 properties of each size should be affordable to people on housing benefit) or 
  • the previous years LHA rate increased by a fixed percentage determined by Government

For all areas in Hackney that are not subject to the maximum LHA cap this means a 4% increase from April 2014.

This means that shared accommodation rates, and the one bedroom rate for the inner east London BRMA will increase by 4%.

Single claimants under 35 in self contained accommodation 

From January 2012 single individuals under 35 who live in self contained accommodation will only be entitled to the rate of Local Housing Allowance for a room in a shared property.

If they claimed Housing Benefit or changed address after 1 April 2011 the reduction will take effect from the anniversary of their claim.

If they claimed before 1 April 2011 the reduction will take effect nine months after they reach their first LHA anniversary date after April 2011. 

The following claimants will be exempt: 

  • individuals receiving a severe disability premium. This means individuals receiving either attendance allowance or disability living allowance care component (middle or higher rate only) who are not receiving carers allowance
  • certain ex offenders who could pose a risk of serious harm to the public. This means offenders who are out under a multi agency protection arrangement  at levels 2 or 3
  • individuals who have lived for three months or more in a homeless hostel or hostels and been supported to resettle in the community. The three months stay in the hostel does not have to be consecutive, but the hostel must have been managed or owned by a registered social landlord (housing association), charity, or operated on a non commercial basis and funded by national or local government. Periods spent in private hostels that are run for profit do not qualify

Local housing allowance (LHA) rates 

From April 2013 LHA will increase by the consumer price index on an annual basis. 

Non-dependent deductions 

Prior to April 2011 non-dependent deductions were frozen for 10 years.  From April 2011 they will increase every April so that by 2014 they will match the level they would have been if deductions had not been frozen since 2001.  

Baby premium  

Previously claimants with a child under one were afforded more help through an extra premium in the calculation of their benefit. This stopped in April 2011. 

Housing allocation

The number of bedrooms a household is eligible for under Hackney's housing allocations policy is different to the number of bedrooms allowed under housing benefit rules.

In some circumstances you could be eligible to bid on a property, which you would be deemed to be under-occupying for housing benefit purposes. This would mean your housing benefit would be restricted, and you would need to make up the shortfall yourself.  Our welfare reform tool outlines the differences between the rules about housing allocation and housing benefit, and how it could affect you.

Page updated: 22/11/2018 10:02:13