RR2 - A guide to Housing Benefit and Council Tax Benefit
Working it out
- Maximum housing benefit
- Maximum council tax benefit
- If you get Income Support, income-based Jobseeker’s Allowance or the Guarantee Credit of Pension Credit
- If you do not get Income Support, income-based Jobseeker’s Allowance or the Guarantee Credit of Pension Credit
Maximum Housing Benefit
The local council works out your Housing Benefit (HB) and Council Tax Benefit (CTB). This section tells you how the council works out your claim.
The most help you can get with your rent is worked out by first taking your maximum rent. Your council also has to make sure that you are paying rent on a home that is suitable for you. Then any non-dependant deductions that apply are taken away from your maximum rent. [HB Reg 61]
Maximum Council Tax Benefit
The maximum help you can get with your council tax is 100% of your council tax bill minus any non-dependant deductions that apply. [CTB Reg 51(1)(2)]
If you get Income Support, income-based Jobseeker’s Allowance or the Guarantee Credit of Pension Credit
If you get Income Support, income-based Jobseeker’s Allowance (JSA) or the Guarantee Credit of Pension Credit and you have rent or council tax to pay you can get maximum HB and CTB.
If you do not get Income Support, income-based Jobseeker’s Allowance or the Guarantee Credit of Pension Credit
If you do not get Income Support, income-based JSA or the Guarantee Credit of Pension Credit, your council has to work out if you can get HB and CTB and if so, how much you can get.
To do this the council works out your maximum HB and CTB, and then compares your needs – called the applicable amount – with your resources (your income and capital).
For customers receiving the Savings Credit of Pension Credit, the council will use a statement supplied by The Pension Service to assess your resources (income and capital).
Second Adult Rebate
Apart from CTB for yourself, you may also be able to get CTB if you share your home with one or more adults. This is separate from any CTB for yourself (main CTB) and is called Second Adult Rebate (SAR) or Alternative Maximum CTB. Second Adult Rebates are intended to assist you with the council tax if you share your home with someone who is on a low income. Second Adult Rebates may be awarded in the following circumstances: [CTB Reg 1992 Sch 2, LGFA 1992 9(6)]
- if you are treated as living on your own for benefit purposes, and share your home on a non-commercial basis with a person who is on a low income and who is not liable to pay the council tax
- the second adult is aged 18 or over, and
- no other person is paying rent to you for living in your home.
In order to be classed as a second adult, they must not be: [LGFA 1992 9 & 77, LGFA 1992 Sch 1, SSCBA 1992, Section 131 (as inserted by LGFA 1992, Sch 9)]
- liable for the council tax
- a joint owner or tenant with you
- your married or unmarried partner
- someone who is disregarded for the purposes of a discount
- living with more than one liable person.
You will need to make a claim for SAR unless you have already claimed CTB for yourself. The gross income of the second adult will be taken into account when assessing entitlement to SAR.
Gross income includes earnings from employment, as well as other income such as social security benefits and occupational pensions and actual income from the second adult’s capital. Any Attendance Allowance or Disability Living Allowance paid to a second adult is completely disregarded. There is no tariff income rule in SAR. You may apply for SAR even if your capital exceeds £16,000.
SAR is awarded on the basis of your council tax bill, after any transitional reductions that you may be entitled to are deducted. The maximum SAR that can be awarded is 25% of the council tax bill. Where the second adult is receiving Income Support, Pension Credit or income-based JSA, the SAR will be 25% of the bill. If the second adult has a gross income of less than £150 per week the benefit will be 15%. If the second adult has a gross income of between £150 and £193.99 a week you will be entitled to 7.5%. You will not get SAR if the second adult has a gross income of £194 a week or more. [CTB Regs Sch 2]
SAR example:
Clarissa Bell is a single liable householder living in a property in council tax band D. Her elderly mother, Mrs Bell, receives Income Support and lives with her daughter. Clarissa is not entitled to main Council Tax Benefit and claims SAR in respect of her mother. No relief for a disabled person or transitional relief has been awarded.
- Annual council tax liability – £400
- Daily council tax liability – £1.095890
- Daily alternative maximum CTB where second adult on Income Support (25% of B) – £0.273973
- The figure at (C) is converted to an annual figure by multiplying by 365 – £100
Annual benefit will therefore be £100 and Clarissa Bell will pay council tax of £300.
Note:
In this example, if Clarissa had been entitled to main CTB and SAR her council would have compared the two amounts of benefit and awarded her the greater amount. [LGFA Sch 9(9)]
Income less than applicable amount
In this case you get maximum HB and CTB. If your income is this low and you do not work or work less than 16 hours a week, you may also be able to get Income Support or income-based JSA. If you work 16 hours a week or more you may be able to get Working Tax Credit or Child Tax Credit if you have a child. [HB Reg 71 & (SPC) Reg 51, CTB Reg 59 & (SPC) 43]
You will also get maximum HB and CTB if your income is the same as your applicable amount.
Income greater than applicable amount
In this case you will get an amount less than your maximum HB and CTB. The amount by which your HB and CTB is reduced is based on the difference between your income and your needs.
A percentage of this difference – called a taper – is taken away from your maximum HB/CTB.
Calculating your needs
Your needs are known as your applicable amount and this is an amount that is set each year and approved by Parliament. Your applicable amount takes into account the size of your family, your age and extra needs you may have. It is made up of personal allowances and premiums. Premiums are included if you have a family, or disability, or a disabled child, or if you are elderly. There is more information on applicable amounts.
Calculating your resources
Your resources are made up of your income and your capital. These are worked out as a weekly amount of income.
Income is all the money that you have coming in from earnings, social security benefits, maintenance payments and other sources. Further information on the treatment of income is explained.
Capital means your savings, investments and the value of property and land owned but not occupied by you.
You will not get HB/CTB if your capital is worth more than £16,000. Further information on the treatment of capital is explained.