OK, so now we know what the eligible rent is (that's if you've read the page about renting in the private or social sectors...)

If you get a means-tested benefit…

If you are receiving a means-tested benefit (like Income Support, income based Jobseeker's Allowance, etc) and no-one lives with you apart from your partner, if you have one, and your children, if you have any, that’s it! The amount of Housing Benefit you get is equal to your eligible rent.

If you get a means-tested benefit but other adults do live with you, things get more complicated. Your eligible rent may be reduced by something called a ‘non-dependent deduction’, the size of which depends on the other person’s income. If you think this may apply you should seek further advice.

If you don’t get a means-tested benefit…

If you have adults other than your partner living with you, your eligible rent may be reduced by something called a ‘non-dependent deduction’, the size of which depends on the other person’s income. If you think this may apply you should seek further advice

 

 If no-one else lives with you apart your partner, if you have one, and your children, you just need two more ingredients before you can do the calculation:

• Your ‘applicable amount’
• Your income

Applicable Amount

Your applicable amount is the amount the government thinks you need to live on: it’s got nothing to do with what you really need to live on.

Your applicable amount is built up of various bits:

• A personal allowance for you, which depends on your age, whether your single or part of a couple or a single parent.
• Personal allowances for any children you have.
• A work-related activity component or support component, if you are on Employment and Support Allowance.
• Premiums, which depend on whether you have a children or not, or whether anyone in the family is a carer, or disabled. The rules about which disability premiums apply are complex: I hope to explain about these eventually, but in the meantime you should probably seek further advice.

There is a table of the whole lot here.
 

Income

This is pretty much what it says: any money you have coming in. However there are some complications: the main ones are as follows:

• It’s your net earnings, after tax and national insurance, that matter.
• Not all your earnings are counted:
• If you are a single parent, £25 per week is ignored.
• If you or anyone in your family is disabled or a carer, you may find that £20 is ignored.
• Otherwise, if you’re part of couple, £10 is ignored, and if you’re single, £5 is ignored.
• As well as these, if you have children and either you or your partner (if you have one) work 16 or more hours a week, an extra £17.10.
• You may also get an extra £17.10 ignored if you work 16 or more hours a week and are disabled.
• You may also get more earning ignored if you work 16 hours a week and have childcare costs.
• Some benefits are ignored: the ones that come up most often are likely to be Child Benefit, Disability Living Allowance, Attendance Allowance, Personal Independence Payment, and payments of Council Tax Support.
• If you have any savings or other capital you have over £6,000 (or over £10,000 if you are over pension age), this may be treated as generating income (even if it doesn’t!) which gets added to your other income.

Now, the calculation…

If your income is less than your applicable amount, it’s simple: your entitled to an amount of Housing Benefit equal to your eligible rent

If your income is more than your applicable amount:

• Calculate your income minus your applicable amount: this is called the difference figure.
• Multiply the difference figure by 65% (multiply it by 65 and divide by 100): this is called the taper.
• Calculate your eligible rent minus the taper: this is your weekly housing benefit.

I think we need an example here…

Ahmed (40) and Aisha (33) live in a privately rented house with their three children. No-one in the family is disabled or caring for anyone who’s disabled, and no-one else lives with them. Their actual rent is £250 per week, but their eligible rent is just £200 per week. The money they have coming in is as follows: £240.00 earnings £ 48.10 Child Benefit £210.00 Working Tax Credit and Child Tax Credit  Applicable Amount: £114.85 Personal allowance for couple, plus £200.70 Personal allowance for three children (66.90 x 3), plus £ 17.45 Family premium, equals £333.00 Applicable Amount Income We can ignore £10 per week from the earnings because they are a couple, and can ignore a further £17.10 because Ahmed works more than 16 hours per week, so the earnings are reduced to £212.90 Child Benefit doesn’t count as income for these purposes, so we can ignore it The £210 tax credits has to get taken into account in full The total income for these purposes is therefore £422.90 (£212.90 + £210.00) The calculation First, work out how much the income exceeds the applicable amount (£422.90 - £333.00): this equals £89.90 (this is called the 'difference figure')  Next, multiple the difference figure x 65%: this equals £58.44 (this is called the 'taper') Finally, reduce the eligible rent by the taper to arrive at the actual housing benefit: £200 - 58.44 = £141.57. So Ahmed and Aisha get £141.57 Housing Benefit per week. They have to make this up with £108.44 (£50 (the difference between the actual rent and the eligible rent) plus £58.44) themselves to make sure that all the rent is paid. (Another way of looking this is that the taper is the bit of the eligible rent that you have to pay: in this case Ahmed and Aisha have to pay £58.44, as well as the £50 shortfall between the actual rent and the eligible rent.)

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