RR2 - A guide to Housing Benefit and Council Tax Benefit
Working it out
Reduced Housing Benefit/Council Tax Benefit
If your income is greater than your applicable amount, your HB/CTB will be reduced. The reduction is tapered, which means that the more money you have the less HB/CTB you will get.
Housing Benefit
The council works out the difference between your income and your applicable amount. This is called your excess income. The council takes away 65% of the excess from the help you can get with your rent (65% is 65p in every £1). If this leaves you with HB of less than 50p a week it is not paid. [HB Reg 71& (SPC) Reg 51]
Council Tax Benefit
The council compares your income with your applicable amount. If your income is more than your applicable amount the council takes away 20% of the difference from your maximum CTB. So, for every £1 that your income exceeds your applicable amount the council will take 20p off the maximum benefit for that week. The resulting sum is the amount of benefit you will get on your claim. There is no minimum benefit rule in CTB and in this respect the CTB rules differ from the HB rules. Claimants are entitled to receive any CTB, however small the amount may be. [CTB Reg 59 & (SPC )Reg 43]
Weekly amounts
HB/CTB is calculated on the basis of a benefit week. The benefit week is the seven days from Monday to Sunday. The council needs to have weekly amounts for all the elements in the calculation to work out your HB/CTB. Your applicable amount (needs) and non-dependant deductions are already worked out as weekly figures. Weekly amounts of rent are explained below. [HB Reg 2 & (SPC) Reg 2, CTB Reg 2 & (SPC) Reg 2]
If you pay rent weekly
If you pay your rent weekly, the council uses the amount you pay each week. If the amount you pay changes during a benefit week, the weekly amount for that week will be calculated using the number of days for which the old and new amounts are payable.
| For example, the weekly rent increases from £70 to £77 on a Wednesday | |
| Daily rent (old rate) £10, daily rent (new rate) £11 | |
| Rent payable Monday and Tuesday 2 days @ £10 | £20 |
| Rent payable Wednesday – Sunday 5 days @ £11 | £55 |
| Which gives a weekly rent , for the week of the change of | £75 |
From the following week the new weekly rent of £77 will be used.
If you don’t pay weekly
If you pay monthly or for multiples of a month a different method is used to arrive at a weekly amount. The amount you pay is divided by the number of months it covers. That figure is then multiplied by 12 to reach an annual figure and the annual figure is divided by 52.
| For example, Kim pays her rent quarterly. She pays £900 | |
| The monthly amount is | £300 |
| The annual amount is | £3600 |
| The weekly amount is | £69.24 |
If the amount you pay changes during a benefit week the weekly amount for the week of the change will be worked out in the same way as if you paid your rent each week.
| For example, Kim's quarterly rent increases to £960, the new amount is payable on a Wednesday | |
| The monthly amount is | £320 |
| The annual amount is | £3840 |
| The weekly amount is | £73.85 |
| Daily rent (old rate) £9.89, daily rent (new rate) £10.55 | |
| Rent payable Monday and Tuesday 2 days @ £9.89 | £19.78 |
| Rent payable Wednesday – Sunday 5 days @ £10.55 | £52.75 |
| Which gives a weekly rent , for the week of the change of | £72.53 |
From the following week the new weekly rent of £73.85 will be used.
If you pay your rent on a daily basis the council will multiply the amount you pay each day by the number of days in the benefit week you must pay the rent. For example a daily rent of £12 will be a weekly amount of £84.
[HB Reg 80(2)(c) & (SPC) Reg 61(2)(c)]
Rent-free periods
If you have no rent to pay for fixed periods during the year the council will change your HB. When you are not paying rent you will not get HB. For the rest of the time that you are paying rent your HB is reduced by an amount that takes into account your income for the part of the year when you pay no rent. [HB Reg 81 & (SPC) Reg 62]
For example if you are paying rent for only 50 out of 52 weeks, you get no HB for two weeks and a factor is worked out for the rest of the year – 52 divided by 50 (or 104%). This factor is applied to all elements in the calculation of HB except eligible rent. The resulting HB will be slightly less for the whole year because of this factor.