Guidance

Housing Benefit subsidy guidance manual 2021 to 2022

Published 27 July 2022

Amendment 16

To:

All holders of the Housing Benefit (HB) Subsidy Guidance Manual.

Subject:

Amendment 16 to the HB Subsidy Guidance Manual.

Content:

This amendment gives details of the subsidy arrangements for the relevant year.

Action:

This is a full reprint of the HB Subsidy Guidance Manual. It is being published on the GOV.UK website.

The first year for which this manual should be used when claiming subsidy is financial year ending March 2022 and is referred to in this manual as the ‘relevant year’.

Record of amendments

1. Amendments are serially numbered so that holders can check they have received the full series.
2. Incorporate amendments immediately and record that you have done so below.

Serial number	Initials	Date	Serial number	Initials	Date
1	Incorporated	Dec 05	19
2	Incorporated	Oct 06	20
3	Incorporated	Feb 08	21
4	Incorporated	Apr 09	22
5	Incorporated	May 10	23
6	Incorporated	Feb 11	24
7	Incorporated	Mar 12	25
8	Incorporated	Mar 13	26
9	Incorporated	Mar 14	27
10	Incorporated	Mar 15	28
11	Incorporated	Apr 16	29
12	Incorporated	Mar 17	30
13	Incorporated	Mar 18	31
14	Incorporated	Mar 19	32
15	Incorporated	Mar 21	33
16	Incorporated	Mar 22	34
17			35
18			36

Abbreviations

ADMIN	Administrative
ASHE	Annual Survey of Hours and Earnings
B+B	Board and Lodgings
BRMA	Broad Rental Market Area
CRR	Claim Related Rent
CTB	Council Tax Benefit
DCLG	Department for Communities and Local Government
DRI	Disproportionate Rent Increase
DWP	Department for Work and Pensions
EP	Extended Payments
ESA	Employment and Support Allowance
ESA(C)	Employment and Support Allowance Contributory Based
ESA(IB)	Employment and Support Allowance Income Based
HA	Housing Association
HAL	Housing Association Leasing
HAMA	Housing Association Managing Agents
HAT	Housing Action Trust
HB	Housing Benefit
HMRC	His Majesty’s Revenue and Customs
HRA	Housing Revenue Account
HRAS	Housing Revenue Account Subsidy
IB	Incapacity Benefit
IOW	In and Out of Work
IRL	Indicative Rent Level
IS	Income Support
JSA(IB)	Income-based Jobseeker’s Allowance
LA	Local Authority
LAA	Local Authority Association
LCA	Labour Cost Adjustment
LHA	Local Housing Allowance
MHCLG	Ministry of Housing, Communities and Local Government
PoA	Payment on Account
RCA	Rates Cost Adjustment
RSL	Registered Social Landlord
SDA	Severe Disablement Allowance
SHBE	Single Housing Benefit Extract
VOA	Valuation Office Agency
WG	Welsh Government

About this manual

Background

1. From financial year ending (FYE) March 2011 the Subsidy Guidance Manual changed to a different format to previous editions.

2. In the past, each edition was written for a specific year. This edition is generic and can be used for any year from FYE March 2011 until FYE March 2022. ‘The relevant year’ means the year for which subsidy is being claimed.

3. Some parts of the manual do refer to a specific year, for example, Appendix A, and this is noted.

4. In future, the only parts of the manual that will be updated will be those where there has been a change in policy or there is a need to refer to a specific year.

5. Each amended version of the Subsidy Guidance Manual will be available on GOV.UK.

What this manual contains

6. This manual details the subsidies the Department for Work and Pensions (DWP) will pay Local Authorities (LAs) for certain costs of Housing Benefit (HB).

7. This guidance covers subsidies for:

• benefit costs
• administration costs

8. This manual is also supported by:

• several appendices
• a key word index

Cross references

9. Whenever possible all main guidance for a particular issue is contained in the same section. Sometimes you will be referred to another part of the manual or another document for further related information, rather than repeating that same information.

Language of the manual

10. Some ordinary words and phrases have been used within the manual with a specific meaning to aid ease of reading and understanding. These words and phrases are:

• ‘you’ is used to mean the person within the local authority making the decision
• ‘home’ or ‘accommodation’ is used rather than ‘dwelling they occupy as their home’
• ‘authority’ or ‘authorities’ is used to denote authorities’ responsibilities especially if talking about the administration arrangements within an authority

Queries

11. If you have any queries concerning the content of this manual, contact details are given at the end of each section.

12-99

Section 1: introduction

100. The Department for Work and Pensions (DWP) is responsible for paying all subsidy in respect of rent rebate and rent allowance.

101. With the exception of certain areas of Housing Benefit (HB) spending wherein local authorities (LAs) have the most scope to monitor and control costs, subsidy is paid at the rate of 100%. The benefit subsidy arrangements require LAs to keep accurate records of benefit spending falling into the different categories required for subsidy purposes. LAs need to maintain systems and records in such a way that the individual cases and records relating to the HB award, (which in turn make up the benefit subsidy totals in each category), can be identified for verification of accounts and claims for internal audit and auditor certification purposes.

Subsidy legislation

102. Until financial year ending (FYE) March 1997, the HB/Council Tax Benefit (CTB) subsidy arrangements for each financial year were provided for in the annual HB and CTB (Subsidy) Order, which was made towards the end of the relevant financial year.

103. However, from FYE March 1998, the legislative vehicle for the subsidy arrangements is the Income-related Benefits (Subsidy to Authorities) Order 1998 SI 1998/562. It is amended as required to take account of any changes to the subsidy arrangements.

104. Separate detailed guidance is issued about the arrangements for claiming payments on account of subsidy and for making final subsidy claims. A summary is given in Section 11: In-year instalments of subsidy and payments of subsidy.

105. LAs should note that amounts should be rounded to the nearest pound when claiming subsidy. Amounts of 50 pence or less should be rounded down and amounts over 50 pence should be rounded up.

106. This guidance should be read in conjunction with the ‘Notes for guidance on completion’ accompanying final subsidy claim forms (MPF720A, B, or C, as appropriate).

Language

107. Throughout the Subsidy Guidance Manual, the use of Auditor should be taken to mean a Reporting Accountant for LAs in England and Auditor for LAs in Scotland and Wales.

108-199

Section 2: Benefit costs

200. The benefit subsidy arrangements set out in this guidance manual apply to all HB lawfully paid in the relevant year. They also apply to all overpayments identified in that period.

201. Local Authorities (LAs) receive, for the greater part of the qualifying benefit expenditure they incur, a direct subsidy of 100%. However, in areas of expenditure wherein LAs have most scope to monitor and control costs, lower rates apply.

202. The areas of benefit spending which attract a lower rate of subsidy are:

• certain types of overpaid benefit and duplicate payments, see Section 4: Overpayments, Overpaid benefit.

• disproportionate increases in rents rebated through HB, see Section 5: Disproportionate rent increase rule.

• rent rebate payments above a specified level in respect of homeless people in board and lodging, licensed and short-term accommodation, see Section 6: Temporary accommodation.

• rent allowance paid above or without the required rent officer determination, see Section 7: Rent allowances.

• rent allowance payments above a specified level in respect of temporary or short-term accommodation where a Registered Housing Association is the landlord, see Section 6: Temporary accommodation.

203-209

Qualifying expenditure

210. ‘Qualifying expenditure’ is the total of HB paid by an LA during the relevant financial year, subject to certain deductions. The deductions are:

• modular improvement schemes (rent rebate only), unless the LA qualifies for exemption
• rent free weeks and credits
• awards to tenants
• prior year overpayments – including recovered departmental error overpayments
• uncashed instruments of payment
• recovered payments on account which occurred in a previous year
• expenditure on modified schemes

211. The term ‘paid’ should be taken to mean benefit lawfully awarded and paid or credited in relation to the relevant year even though physical payments of benefit made to claimants, by rent allowance or as a rebate, may not reflect actual benefit paid because of deductions from ongoing entitlement to recover overpayments.

Queries

212. If you have any queries concerning the content of this section contact:

Local Authority Partnership, Engagement and Delivery (LA-PED) division
Email: lawelfare.lafunding@dwp.gov.uk

213-299

Section 3: Backdating

Backdated claims

300. Since 1 April 2016, subject to ‘continuous good cause’ having been demonstrated, a claim from a person of Working Age may be backdated for up to one month.

301. For claims from persons of Pension Credit age - see paragraph 330.

302. Subject to any particular conditions which might apply, for example, thresholds and caps, the rate of subsidy for correctly paid backdated benefit is 100%.

303. The relevant regulations are:

• Housing Benefit Regulations 2006; regulation 83(12)
• Housing Benefit (Persons who have attained the qualifying age for state pension credit) Regulations 2006; regulation 64(1)
• Housing Benefit (Abolition of the Family Premium and Date of Claim)(Amendment) Regulations 2015

304. Subsidy is calculated on the total benefit backdated in the financial year. It is payable for the year in which backdated payments are made, even if the period for which benefit is backdated falls wholly or partially in the previous financial year.

305. LAs should be rigorous in establishing whether the criteria of ‘continuous good cause’ in the backdating rules have been met. If these criteria have not been met, backdated benefit should not be paid. It is down to the individual authority’s discretion to establish whether ‘continuous good cause’ has been proven.

306. Subsidy in backdated claims is subject to the external auditor’s certification as per the relevant auditor certification instructions.

307. LAs must be able to demonstrate continuous good cause whenever backdated benefit is paid to working age customers and must retain supporting evidence for audit purposes. If LAs are unable to demonstrate continuous good cause, the Department for Work and Pensions (DWP) will deem the associated subsidy to have been overpaid.

308. Backdated amounts are those in respect of a period prior to the effective date of the claim. Late assessments of claims or late payments in themselves do not constitute backdated awards.

309-319

Completion of the subsidy claim form

320. Backdated benefit should be treated in the same way as non-backdated expenditure, in other words:

• included in the total expenditure cells of the form, that is cells 011, 055 (English/Welsh authorities only), and 094
• included in the relevant cell(s) in each section of the form according to the type of payment made, and
• if subsequently found to be overpaid, the overpayment must be recorded in the appropriate overpayment cell(s)

321. Backdated benefit (excluding overpayments) must also be separately identified in cells 038, 078 (English/Welsh authorities only), and 131. The purpose of these cells is to identify backdated expenditure so that relevant audit trails and assurance can be provided that expenditure has been properly incurred.

322. LAs should not consider backdating on a claim for benefit where a previous claim has already been received that still needs to be fully considered. Entitlement to benefit or a review of benefit should be made on the previous claim first, rather than backdating being considered on the new claim.

323-329

Claims from persons of Pension Credit age

330. The backdating time limit for persons of Pension Credit age is 3 months.

331. A LA may consider the start date of the claim from a person of Pension Credit age up to 3 months before the date on which the person actually makes the claim. They are not required to show good cause. However, the benefit paid should be treated as normal HB and not backdated expenditure.

332. LAs should refer to the advice in Circular HB/CTB A16/2008.

333-339

Queries

340. If you have any queries concerning the content of this section, please contact LA-PED at lawelfare.lapaymentsandsubsidy@dwp.gov.uk

341-399

Section 4: Overpayments

Overpaid benefit

400. The objective is to encourage LAs to seek to minimise overpayments, as defined by Regulation 99 of the Housing Benefit Regulations 2006, and to recover overpaid benefit wherever appropriate.

401. The rates of subsidy that apply to overpayments vary according to the circumstances in which they were made:

i. Eligible – this category includes Claimant error, Fraud and Other overpayments.

Claimant error – this is an overpayment that has been caused by the claimant or a person acting on the claimant’s behalf, failing to provide information or report a change of circumstances, in accordance with the regulations, and is not a fraudulent overpayment.

Fraud – this is an overpayment that has occurred after 31 March 1993, when the claimant has, in respect of the overpayment:

• been found guilty of an offence

• admitted an offence in an interview under caution, or

• agreed to pay an administrative penalty.

Other – this is an overpayment, which does not fit into any of the other categories. Examples could be when an LA makes a payment in good faith but a change, such as an adverse decision in a judicial review, results in an overpayment; or, an award of benefit does not take into account any income subsequently paid as arrears, for instance when a claimant’s earnings increase retrospectively, and they receive a lump sum payment of arrears or as a result of entitlement to another benefit commencing or increasing.

This category of overpayment attracts subsidy at the rate of 40%. For further information, see HB Overpayments Guide, Classification and Recoverability chapter

ii. LA error – this is an overpayment which has arisen from a mistake being made. This may be in the form of an act or omission made by the LA or someone acting on their behalf, for example when an LA miscalculates the amount of HB entitlement. This classification is not appropriate if the claimant, their appointee or agent, or the person to whom the benefit was paid, caused or materially contributed to the mistake, act or omission.

iii. Administrative (Admin) delay – this is an overpayment arising when:

• the LA is notified of a change of circumstances and has sufficient information and evidence to make a revision or supersession decision, and

• the LA does not make a decision on that change of circumstances or suspend the benefit before the claimant’s next payday, and

• the delay was not due to a mistake, whether in the form of an act or omission, made by the LA or someone acting on their behalf, and

• the delay was not caused or contributed to by the claimant, a person acting on the claimant’s behalf, or any other person to whom the benefit was paid.

When all the information needed to process a change of circumstances that would reduce a claimant’s HB entitlement is received, the LA must action it before the claimant’s next payday. If it is not actioned before the next payday, any overpayment from the first day of the benefit week following receipt of all the information should be classified as LA official error or Admin delay (depending on whether the delay was caused by a mistake, in the form of an act or omission).

The subsidy for LA errors and Admin delays are determined by thresholds and may be nil, 40% or 100% subsidy, see LA error/Admin delay thresholds later in this section.

iv. Technical overpayment – this type of overpayment arises because of:

• rent rebate being awarded and the rental liability ceasing or reducing, after the award, which therefore eliminates or reduces entitlement to that rent rebate. The Technical overpayment begins on the day the rental liability ceases or reduces.

• In England from 1 April 2020, where rent set by the LA is not compliant with the Rent Standard, LAs must assess the impact on any HB claim affected by this. Where the HB claim reassessment generates an overpayment of rent rebate (current or prior years) this is classified as a Technical overpayment, see Section 9: Rent Rebate Subsidy Limitation.

This category of overpayment is ineligible for subsidy.

v. Payment on Account (PoA) overpayment – this type of overpayment arises because a PoA was made, which the claimant was not entitled to. It is eligible for 100% subsidy, see paragraph 408.

vi. Recovered PoA overpayment – this type of overpayment arises because a PoA was made, which the claimant was not entitled to, but it has been recovered. It is ineligible for subsidy.

vii. Duplicate overpayment – this type of overpayment arises from a duplicate payment following alleged non-receipt, loss, theft or destruction in cases where the original payment has been cashed. It is eligible for 25% subsidy. See Duplicate payments at paragraph 480.

viii. Departmental error – this type of overpayment arises from a mistake, whether in the form of an act or omission, made by an officer of DWP or HM and Customs (HMRC). This classification is not appropriate if the claimant, their appointee or agent, or the person to whom the benefit was paid, caused or materially contributed to the mistake, act or omission. Such overpayments can occur, for example, on initial processing of claims, such as, incorrect local office assessment of Income Support entitlement or incorrect notice of entitlement to the authority. This category of overpayments is eligible for 100% subsidy, see paragraph 408.

ix. Recovered Departmental error – this type of overpayment arises from a mistake, whether in the form of an act or omission made, by an officer of DWP or HMRC, but it has been recovered. This category of overpayment is ineligible for subsidy.

402. It is not necessarily a Departmental error if DWP fails to pass information on to LAs regarding changes in the claimant’s circumstances. This is because the claimant has a duty to report any changes that may affect their entitlement to HB to the LA that administers their benefit. Even if a claimant has notified the DWP of a change, they still have a duty to report it to the LA.

403. An overpayment arising after DWP has notified the LA may be classified as LA error or Admin delay, because once the LA is aware of a change, they are expected to act on it. However, this will all depend on the information that is sent by DWP. If further information is still needed from the claimant, they are still contributing to the overpayment and therefore the overpayment would be classified as Claimant error.

404. There are however exceptions to the regulations that stipulate that a claimant must notify the LA of a change of circumstances. For further information - see HB Overpayments Guide, Classification and Recoverability chapter

405. Subsidy on overpaid benefit in categories i-ix of paragraph 401 is payable on the total amounts of overpaid benefit identified by the LA within the financial year. LAs will not be required to deduct from their claim in that year – or refund in subsequent years – any amount of overpaid benefit which is later recovered, except for certain Departmental error overpayments and overpayments arising from making a PoA, see paragraph 408.

406. It should be noted that subsidy is claimed on netted overpayments calculated in accordance with regulations 104 and 104A of the HB Regulations 2006. For further information, see Underlying Entitlement and Calculating change of address overpayments later in this section

407. In common with LA error overpayments, benefit overpaid as a result of Departmental error is only recoverable when the claimant or person to whom benefit was paid could reasonably have been expected to realise they were being overpaid at the time the overpayment occurred - see HB Overpayments Guide, Classification & recoverability chapter

408. Benefit overpaid because a PoA was made, which the claimant was not entitled to attracts 100% subsidy but is recoverable. In both Departmental error and PoA overpayment cases, 100% subsidy is payable on the amount of overpaid benefit less any amount which is recovered, in other words, not necessarily on the amount which is originally identified. When an amount is recovered in the current year and the overpayment was identified in an earlier year, the amount recovered in the current year should be deducted from total benefit expenditure in the current year.

409-419

The treatment of overpayments on the subsidy claim form

420. The subsidy claim form (MPF720A, B or C as appropriate) records overpayments according to whether the overpayments relate to the current year or prior years.

Current year overpayments

421. Current year overpayments are those identified in the year relating to benefit paid in the year (including benefit paid in the year in respect of an earlier year).

422. They should be recorded in the appropriate total expenditure cells and the following overpayment cells:

• 024 to 028 (non-Housing Revenue Account (HRA) rent rebate in England and Wales, all rent rebates in Scotland)

• 063 to 067 (HRA rent rebate in England and Wales), or

• 111 to 117 (rent allowance)

Prior year overpayments

423. Prior year overpayments are those identified in the year relating to benefit paid in an earlier year.

424. They should be recorded in cells:

• 029 to 033 (non HRA rent rebate in England and Wales, all rent rebates in Scotland)

• 068 to 072 (HRA rent rebate in England and Wales), or

• 118 to 124 (rent allowance)

Prior year overpayments should not be recorded in the total expenditure cells in the current year’s claim.

Example

£100 was paid in a rent allowance case administered under the pre-1996 rules and was recorded in cell 098 (expenditure on that part of the weekly eligible rent at or below the rent officer’s determination on a claim) of the previous year’s subsidy claim.

In the current year it is discovered that £40 of the £100 paid was an eligible overpayment.

£40 should be recorded in cell 121 (eligible overpayments from a prior year) of the current year’s claim. This will ensure that the £40 correctly attracts 40% subsidy.

The calculation at cell 125S ensures the subsidy claimed in the previous year is adjusted.

425-429

LA error/Admin delay thresholds

430. An initiative was introduced from April 2004 to allow LAs to receive subsidy according to the level of their LA error overpayments when compared to the total amount of correct benefit payments they make. This now includes Admin delay overpayments.

431. The level of subsidy that LAs may claim for LA error and Admin delay overpayments is determined by thresholds, expressed as a percentage of total correct payments. The thresholds are:

Lower threshold	0.48%
Upper threshold	0.54%

Where the LA error/Admin delay overpayments are	Subsidy rate for the total LA error/Admin delay overpayments
less than or equal to 0.48% of the expenditure 100% attracting 100% subsidy	100%
greater than 0.48% but less than or equal to 0.54% of the 40% expenditure attracting 100% subsidy	40%
greater than 0.54% of the expenditure attracting 100% subsidy	nil

432. For the calculation of the percentage LA error/Admin delay, correct payments are defined as payments for which full (100%) subsidy is payable. This includes Rent Rebates, non-HRA Rent Rebates and Rent Allowances and incorporates any backdating that has been properly undertaken.

433. LA error overpayments are only recoverable if the claimant, or their representative, could reasonably have been expected to realise they were being overpaid. Under these circumstances, LAs entitled to subsidy for LA error overpayments will keep any amount recovered without any loss of subsidy.

434-439

Backdated payments and overpayments

440. Backdated payments are sometimes found subsequently to have been overpayments. From April 2004 all backdated payments which are later found to have been overpayments should be recorded, for subsidy purposes, as the appropriate type of overpayment.

441. The mechanics of the claim form will affect the deduction of the full amount of overpaid benefit from the total benefit expenditure figure. In the case of Departmental error overpayments, the figure to be deducted will be the amount of any Departmental error overpayments recovered in the financial year.

442. LAs should include the whole amount of overpaid benefit identified in the current year relating to both the current and any previous year(s) in the figure for total overpaid benefit under the relevant overpayments category, for example, LA error, so that the appropriate rate of subsidy can be claimed.

443. It will often be the case that a portion of the overpaid benefit identified in the year of the subsidy claim (year A) was in fact paid in a previous financial year (year B) and has already attracted subsidy. LAs should identify the correct overpayment category and claim the appropriate rate of subsidy for the year in which the subsidy claim is made (year A).

444-449

Underlying entitlement

450. Regulations state that in calculating the amount of a recoverable overpayment, you must take account of any underlying benefit entitlement that existed throughout the period of the overpayment.

HB Reg 104

451. When overpayments have occurred, the overpayment equals the difference between the benefit already paid and any underlying entitlement. Subsidy should be claimed on the overpayment at the appropriate rate. In some cases, this will be nil. The underlying benefit entitlement will attract subsidy at the rate claimed for correct benefit payments (100%).

452. As a general principle, subsidy is not payable twice in respect of the same expenditure over the same period. When an overpayment has arisen and benefit is subsequently awarded for the same period, subsidy in respect of the overpayment should only be claimed on the net overpayment.

453. The following examples assume no other relevant factors are involved:

Example

A claimant is in receipt of £100 HB a week. The LA is then informed that the claimant started full-time work two months ago. Underlying entitlement is considered, but the LA establishes that the claimant would not have been entitled to any HB for the period of the overpayment. The overpayment is therefore £100 a week, which has been classified as ‘Fraud’ error. The subsidy that should be claimed is:

Subsidy Underlying Entitlement = nil	nil
Overpayment Amount = £100	40% of £100 = £40
Total Subsidy =	£40 per week

Example

A claimant is in receipt of £100 HB a week. The LA is then informed that the claimant started work two months ago. Underlying entitlement is considered, and it is discovered that the claimant would have been entitled to £50 HB a week. There is an overpayment of £50 a week, which has been classified as ‘Claimant error’. The subsidy that should be claimed is:

	Subsidy
Underlying Entitlement = £50	100% of £50 = £50.00
Overpayment Amount = £50	40% of £50 = £20.00
Total Subsidy =	£70.00 per week

Note: When completing the final subsidy claim form, Fraud and Claimant error overpayments are to be entered in the appropriate ‘Eligible’ overpayment cell.

Example

A claimant is in receipt of £100 HB a week. The claimant informs the LA that he is starting work the following week. The LA does not action the change of circumstances so there is an overpayment. Underlying entitlement is considered, and it is discovered that the claimant would have been entitled to £25 HB a week. The overpayment is £75 per week and is classified as ‘LA error’. The subsidy that should be claimed is:

	Subsidy
Underlying Entitlement = £25	100% of £25 = £25.00
Overpayment Amount = £75	nil due to LA error = Nil*
Total Subsidy =	£25.00 per week

*The LA error overpayment may attract subsidy under the LA error threshold scheme. However, for illustrative purposes this is omitted from this example.

Calculating change of address overpayments

454. The HB regulations were amended from 1 April 2010, with regards to calculating overpayments when a claimant has changed address within the same LAs area. An LA should ‘offset’ the HB entitlement at the new address against the overpayment from the previous property, thereby reducing the overpayment to nil in the majority of cases. However, the HB must have been payable to the same person (claimant, claimant’s representative or landlord/agent), in respect of both dwellings, for the provisions to be applied.

455. The overpayment should be reduced by the entitlement at the new address in every case when the criteria listed in Housing Benefit Regulation (Reg) 104A ((SPC) Reg 85A) are satisfied. However, if it is decided that it would not be in the claimant’s best interests to apply the ‘offset’, for example because it would cause severe hardship for the claimant, HB could be paid again for the same period. A record of the decision to pay HB when the ‘offset’ could have been applied would need to be kept for the LA to claim subsidy for both the overpayment and the HB entitlement at the new address, covering the same period.

456. An ‘offset’ cannot be applied to cases when the HB is paid to different people at the old and new addresses, for example when it is paid direct to the landlord at the previous property and is then paid to a different landlord at the new address, or when it is paid to the landlord at the previous property and is then paid to the claimant at the new address. This is to ensure that the claimant is not put into rent arrears at their new address.

457. An ‘offset’ cannot be applied to cases when the claimant and partner swap who is claiming the HB, when they have changed address. This is because the claimant and partner’s HB claims are two different claims for benefit. HB from one claim cannot be ‘offset’ against an overpayment from another claim. The overpayment would have to be recovered by making weekly deductions from ongoing HB entitlement.

458. An ‘offset’ cannot be applied when the previous property was being paid as a rent rebate, as the claimant cannot use the benefit credited to the rent account to pay their rent at the new address. See HB Overpayments Guide, Calculation of overpayments chapter.

Netting spanning two financial years

459. For netting that spans more than one year, it will be necessary to adjust the current subsidy claim to reflect the amount of subsidy already claimed in a previous year. This could occur where an overpayment on review is subsequently found to be:

i. correctly paid, or
ii. a backdated payment

460. As correctly paid and backdated payments attract 100% subsidy from April 2004, an overpayment that is subsequently found to be either correctly paid or backdated can be treated, for subsidy purposes, as shown in the example below. In the previous year the reduced rate of subsidy applicable to the category of overpayment will have been claimed. On review in the subsequent year the balance of subsidy up to 100%, will need to be included in the subsidy claim.

461. In the case of paragraph 459 i and ii, to claim the shortfall in subsidy it will be necessary to reduce the appropriate overpayment cell in the current subsidy claim by the amount that was previously claimed as an overpayment, but which is now found to be correctly paid (or backdated) and eligible for 100% subsidy.

Example

Overpayment of £100 rent allowance identified in a previous year and 40% subsidy claimed.

In the current year £75 of the overpayment is found to be correctly paid (as a normal payment or a backdated payment), and eligible for 100% subsidy. The appropriate overpayment cell is reduced by £75. The mechanics of the claim form are such that this will result in the shortfall in subsidy between the 40% already claimed and 100% being included in the overall subsidy total.

Note: There are unlikely to be instances when an overpayment previously categorised as fraudulent is subsequently found to have been correctly paid, or a backdated payment.

462-469

HB paid to Crown tenants

470. HB should not be awarded in cases when the landlord’s interest is held by a government department. These cases are Crown tenancies and HB is not legally payable. HB paid erroneously to Crown tenants should be classified as an overpayment. The appropriate rate of subsidy depends on the kind of overpayment it is.

471-479

Duplicate payments

480. Duplicate payments attract a lower rate of subsidy in cases when the original instrument has been, or is subsequently, encashed. Duplicate payments can be made following:

i. alleged non-receipt
ii. loss
iii. theft
iv. destruction of an instrument of payment

481. In such cases, subsidy on the duplicate payment is payable at 25%, the original payment attracts subsidy at the appropriate rate. There may be cases when a duplicate payment is issued, and the original instrument is found to be uncashed. Uncashed payments do not receive subsidy, see Section 8: Uncashed payments of HB later in this manual.

482. LAs should ensure that, when a duplicate payment has been issued and the original is found to be uncashed, subsidy at the appropriate rate is claimed on the amount once only.

483-488

Universal Credit

489. If the overpayment is for Universal Credit and includes housing costs these will be recovered by DWP and there are no subsidy implications.

Queries

490. If you have any queries concerning the content of this section, email debtpolicy.focalpoint@dwp.gov.uk

491-499

Section 5: Disproportionate rent increase rule (Scottish and Welsh authorities only)

Disproportionate increases in rents rebated through HB

Note: These paragraphs relate only to Scottish and Welsh authorities.

500. This subsidy control is intended to discourage LAs from loading rent increases onto council tenants to unfairly generate increased subsidy income. An LA can gain exemption if it can convince its auditors that it meets one of the following criteria:

• the LA has not deliberately targeted rent increases at tenants getting HB

• the LAs rents during the year in question have increased by a common percentage with no subsidy deduction having been incurred in the previous year

501. LAs that do not qualify for exemption must carry out a calculation that involves an in-year comparison of council rent increases and the input of the prior year’s Disproportionate Rent Increase (DRI) penalty figure. The DRI calculation excludes rents and expenditure in respect of homeless people in bed and breakfast and short-term leased and licensed accommodation.

502-509

Exemption categories

510. Authorities can gain exemption from the DRI rule in one of two ways.

Category (A) – open and transparent rent-setting policies

511. The LA must satisfy all the following criteria:

• for the relevant year the LA has set rents according to the type, condition, class or description of the dwelling and the services, facilities or rights provided to the tenant

• for the relevant year the LA did not have regard to tenants’ real or potential HB status when setting its rents

• in the relevant year and the previous two years, the LA did not let properties attracting higher rents to tenants who were on rebates, or who were likely to become rebated, irrespective of their housing need.

Category (B) – rents increased by a common percentage

512. The LA can also gain exemption from the DRI rule when both the following criteria apply:

• there is clear evidence that rent increases between 31 March of the year before the relevant year and 31 March of the relevant year were the same percentage and applied on the same day for all tenants irrespective of their HB status, and

• no subsidy deduction was applicable under the DRI rule for the year before the relevant year. This should be tested after the final subsidy claim for that year has been settled.

513. A crucial factor in gaining exemption from the DRI is the assessment of the auditor. The onus is on the LA to provide the auditor with conclusive supporting information. If the auditor is not satisfied that an exemption is appropriate, but the LA has purported to have exempted itself from the DRI calculation, the auditor will suggest the LA amend its form. The LA will then be required to:

• carry out the DRI calculation

• make any appropriate deduction from subsidy

• have this calculation audited.

If the LA is not prepared to amend its form, the auditor will qualify the claim.

514-519

The DRI calculation

520. An LA which does not qualify for exemption will be required to carry out a calculation based on the DRI abatement applied in the preceding year, multiplied by any new abatement arising from a disproportionate rent increase in the subsidy year itself.

521. The DRI calculation is as follows:

A. The base for deductions

To ensure parity for Wales and Scotland, the base to which the DRI deduction should be applied is Qualifying expenditure attributable to rent rebates only, that is:

Total rebates less:

• ‘nil’ deductions, for example, modular improvements and awards to tenants

• amounts above rent rebate thresholds, less

• overpayments of rebates

For the purposes of the DRI formula, the base to which any deduction should be applied is referred to as ‘X’.

B. Calculation of the DRI deduction

Y = (1 + E96) x C x F - 1

DRI deduction = Y x X

a) C is determined by dividing B by A when:

• A is the average rent charged by the LA on 31 March of year before the relevant year to tenants in Category 1 dwellings

• B is the average rent charged by the LA on 31 March of the relevant year to tenants in Category 1 dwellings

b) F is determined by dividing D by E when:

• D is the average rent charged by the LA on 31 March of the year before the relevant year to tenants in Category 2 dwellings

• E is the average rent charged by the LA on 31 March of the relevant year to tenants in Category 2 dwellings

E96 is the proportion of HB qualifying expenditure that was attributable to the DRI under the Income-related (Subsidy to Authorities) Order 1998 for the year before the relevant year

Y is the DRI reduction rate to be applied to HB qualifying expenditure less expenditure in the incentive areas

522-529

Definitions

530. Category 1 dwellings mean dwellings with local authority tenants in receipt of rent rebate on 31 March of the relevant year that were also occupied by those same tenants on 31 March of the year before the relevant year.

531. Category 2 dwellings mean dwellings with local authority tenants not in receipt of rent rebate on 31 March of the relevant year that were also occupied by those same tenants on 31 March of the year before the relevant year.

532. If 31 March of the year before the relevant year or 31 March of the relevant year coincides with a rent-free period, then the rent taken into account for the purposes of calculating the average rent shall be that which applied immediately before the relevant rent-free period began.

Example

First component – the in-year comparison

Average rent on 31 March of the year before the relevant year for tenants in receipt of rent rebates £45.00.

Average rent on 31 March of relevant year for tenants in receipt of rent rebates £48.00.

Average rent on 31 March of the year before the relevant year for tenants not in receipt of rent rebates £42.00.

Average rent on 31 March of the relevant year for tenants not in receipt of rent rebates £45.00.

Value of C = £48.00 ÷ £45.00 = 1.067

Value of F = £42.00 ÷ £44.00 = 0.933 Value of C x F = 1.0185

Second component – previous year’s penalty

Proportion of HB qualifying expenditure that was attributable to the DRI for the year before the relevant year: 0.006

The calculation:

Y = (1 + 0.006) x 1.0185 - 1 = 0.0246

Base for deductions = £1,500,000

DRI deduction = £1,500,000 x 0.0246 = £36,900

Should the calculation of Y produce a zero or a negative figure, no DRI deduction will apply.

533. Figures for total rent payable may be based on either eligible rent for HB purposes or rent actually payable if this is different and can be obtained more readily. Rates and water rates must be excluded in all cases. The same basis must be used for all dates.

534-539

Queries

540. If you have any queries concerning the content of this section, email hbsubsidy@dwp.gov.uk

541-599

Section 6: Temporary accommodation

Subsidy rules from April 2017

600. For claimants placed into non-self-contained accommodation (board and lodging or licensed), HB subsidy will be limited to the one-bedroom self-contained Local Housing Allowance (LHA) rate based on the location of the property - see January 2011 LHA rates

601. For those in self-contained licensed and short-term lease accommodation, the maximum HB subsidy will be determined by using 90% of the LHA rate for the size of the property.

602. The rules affect how subsidy is claimed they do not alter how the HB entitlement is calculated.

603. Full details of the scheme are outlined below.

604-609

Subsidy applicable from 1 April 2017

610. The LHA rates used in the formula to calculate subsidy are set at the January 2011 rates.

611. The relevant legislation is The Income-Related Benefits (Subsidy to Authorities) (Temporary Accommodation) Amendment Order 2010 (SI 2010/2509) as ‘Laid’ in Parliament on 18 October 2010.

612. Articles 17, 17A, 17B and 17C set out the types of cases that these subsidy rules apply to as well as how to calculate the maximum weekly subsidy amount in respect of these cases.

613. The subsidy scheme applies to all cases, existing and new, covered by Articles 17, 17A, 17B and 17C.

614. The heading for Article 17 reads:

Subsidy in respect of non-self-contained licensed accommodation, and board and lodging accommodation, provided by an authority as temporary or short-term accommodation’.

615. This article applies to cases when:

• a rent rebate is payable by an authority (in other words, the LA is the claimant’s immediate landlord)

• the claimant is required to pay rent to the LA for board and lodging (B&B), or

• accommodation which is not self-contained and which the authority has a right to use under an agreement, other than a lease, with a third party (for example, non-self-contained licensed accommodation), and

• the accommodation has been made available to that person, by the LA, to either discharge a statutory homelessness function or to prevent the person being or becoming homeless.

616. The heading for Article 17A reads: ‘Subsidy in respect of self-contained licensed accommodation, and leased accommodation, provided by an authority as temporary or short-term accommodation’.

617. This article applies to cases when:

• a rent rebate is payable by an authority (in other words, the LA is the claimant’s immediate landlord)

• the claimant is required to pay rent to the LA for:

  • self-contained accommodation which the authority has a right to use under an agreement, other than a lease, with a third party (for example, self-contained licensed accommodation).

  • accommodation held outside the Housing Revenue Account (HRA) by LAs in England, on a lease granted for a term not exceeding ten years, or

  • in Wales and Scotland, accommodation which the authority holds on a lease (i.e., all leased accommodation regardless of whether it is held in or outside of the HRA and regardless of duration), and

• the accommodation has been made available to that person, by the LA, to either discharge a homelessness function or to prevent the person being or becoming homeless.

618. The heading for Article 17B reads:

‘Subsidy in respect of non-self-contained licensed accommodation, and board and lodging accommodation, made available by a registered housing association as temporary or short-term accommodation’.

619. This article applies to cases when:

• a rent allowance is payable by an authority (i.e., a registered housing association is the claimant’s immediate landlord)

• the claimant is required to pay rent to the registered housing association for board and lodging (B&B), or

  • accommodation which is not self-contained and which the registered housing association has a right to use under an agreement, other than a lease, with a third party (for example, non-self-contained licensed accommodation), and

• the accommodation has been made available to that person, by arrangement with the LA, to either discharge a homelessness function or to prevent the person being or becoming homeless.

620. The heading for Article 17C reads:

‘Subsidy in respect of self-contained accommodation, or owned or leased accommodation, made available by a registered housing association as temporary or short-term accommodation’.

This article applies to cases when:

• a rent allowance is payable by an authority (i.e., a registered housing association is the claimant’s immediate landlord)

• the claimant is required to pay rent to the registered housing association for accommodation which is:
  • self-contained (in other words, self-contained licensed accommodation, as well as self-contained leased and self-contained owned accommodation), or
  • not self-contained and which the registered housing association owns or holds on a lease (in other words, non-self-contained owned accommodation and non-self-contained leased accommodation)
• the accommodation has been made available to that person, by arrangement with the LA, to either discharge a homelessness function or to prevent the person being or becoming homeless.

Subsidy under the scheme

621. Subsidy is determined by a formula based on:

• the type of accommodation (leased/licensed/board and lodging (or B&B))

• whether it is self-contained or non-self-contained

• the size of the property (number of bedrooms) and

• the January 2011 LHA rate appropriate to the size of the property.

622. The subsidy is also limited by an upper cap based on the Broad Market Rental Area (BRMA) of the accommodation.

Upper subsidy caps

623. In addition to the formula-based calculation of subsidy, the maximum that may be claimed is limited by an upper cap determined by location of the property.

624. If the property is in any of the following BRMAs the upper cap is £500:

• Central London
• Inner West London
• Inner North London
• Inner South West London
• Inner East London
• Inner South East London
• Outer South West London

625. If the property is in any other BRMA the upper cap is £375.

Self contained accommodation

626. Accommodation is self-contained if the claimant’s household is not required to share one or more of the following with another household:

• kitchen
• bathroom
• toilet

The LHA rate for the size of the property

627. Unlike mainstream LHA claims - where the LHA relates to the year in which the claim is made and to the household size - the LHA rate used to determine subsidy for claims in respect of customers living in temporary accommodation will be related to the:

• size of the property (number of bedrooms from one to five inclusive), and
• the January 2011 LHA rate.

Therefore, for these claims (leased/licensed/B&B), the LHA rates for January 2011 should be used in the formula to determine maximum subsidy amounts.

628. This subsidy scheme does not make use of the Shared Room Rate at all.

629. The minimum LHA rate that can be used to determine maximum subsidy for temporary accommodation cases will be the one-bedroom rate.

630. The maximum LHA rate that can be used is the five-bedroom rate.

Number of bedrooms

631. In a property, where there is more than one room suitable for living in, one of those rooms may also be treated (by the landlord and/or tenant) as an extra bedroom. So, for example, a property with three bedrooms and two living rooms might be treated as a four-bedroom property (with one of the living rooms converted into a bedroom), and its rental or leasing value may have been agreed on that basis. In this case, it would be acceptable to use the four-bedroom LHA rate to derive the maximum subsidy amount.

632. However, if it was stated on the lease agreement that the property had three bedrooms (so the lease payment was agreed as a three-bedroom property), then the three-bedroom LHA rate should be used for subsidy purposes.

633. The provision in Article 17A paragraph 4 means that, under this subsidy scheme where there are:

• at least two rooms in total (bedrooms or living rooms) in the property but no more than five rooms, at least one of these rooms must be counted as a living room, and

• six rooms or more, at least two of these rooms must be treated as living rooms, for subsidy purposes.

The table below shows how this works:

No. of rooms in property (living rooms and bedrooms)	Maximum appropriate LHA rate for subsidy purposes (bedrooms)
1	1
2	1
3	2
4	3
5	4
6	4
7+	5

Subsidy for board and lodging (B&B) and non-self-contained (licensed) accommodation

634. The subsidy available is limited to the one-bedroom (self-contained) LHA rate, based on the location of the property.

635. No extra subsidy is payable in cases where more than one room is occupied by the claimant’s household in this type of accommodation.

Subsidy for leased and other self-contained (licensed) accommodation

636. From 1 April 2017 the maximum subsidy amount for these cases will be the weekly rental element being the January 2011 LHA rate (based on property size and location), less 10% (in other words, 90% of the relevant LHA rate).

637-639

Claiming subsidy

640. The level of subsidy payable is the lowest of the:

• weekly (or part-weekly) HB entitlement

• 90% of the relevant January 2011 LHA rate, or

• upper cap limit of £375 (£500 in central / inner London).

641. Any expenditure above these limits will not attract subsidy.

642. Appendix G contains a table which sets out the subsidy arrangements for temporary accommodation.

643-649

Audit requirements

650. LAs will need to be able to provide their auditor with evidence which supports the January 2011 LHA rate they have used in the calculation of the subsidy cap.

651. To do this, authorities will need to be able to demonstrate the correct BRMA information has been used and be able to provide (where requested) independent evidence of the number of bedrooms/rooms suitable for living in, in the accommodation.

652. Evidence of the number of rooms in a property could be in the form of (examples):

• a copy of the leasing or licensing agreement with the owner of the property or managing agent

• a letter from the owner or managing agent

• a copy of the leasing agreement from the Registered Social Landlord (RSL) where the RSL have taken the lease from a private sector landlord and sub-leased the property to the LA, or

• a copy of the leasing agreement from the RSL where the RSL have taken the lease from a private sector landlord under a Housing Association Leasing (HAL) arrangement and the LA need to determine if the rent is unreasonably high or over accommodated.

653. Further information on subsidy in temporary accommodation cases, including examples, can be found in HB/CTB circulars:

• S7/2009
• S3/2010
• S4/2010
• S1/2011
• S5/2017

654-659

Queries

660. If you have any queries concerning the content of this section, email lawelfare.lafunding@dwp.gov.uk

Section 7: Rent allowances

Introduction

700. This section provides guidance on:

• the different types of rent allowance cases

• referral to the rent officer

• payments on account and indicative rent levels.

701-709

Rent allowance cases

710. There are five types of rent allowance cases:

• regulated tenancy cases

• pre-1996 cases (old scheme cases)

• maximum rent cases (new scheme cases)

• registered social landlord cases

• LHA cases

711. To claim subsidy correctly LAs need to establish to which type of case any claim they received relates.

712-719

Regulated tenancies

720. A letting is normally a regulated tenancy if the tenancy began before:

• 15 January 1989, in England and Wales, or
• 2 January 1989 in Scotland

721. If it began after that date, because of a contract agreed before those dates, it may be a regulated tenancy.

722. The tenancy will also be a regulated tenancy if it is a new tenancy granted on or after those dates to an existing regulated tenant, other than a shorthold tenant, by the same landlord; or if it is granted as a tenancy of suitable alternative accommodation as the result of a court order and the court directed that it should be a regulated tenancy - Section 34 of the Housing Act 1988 refers.

723. Although no new regulated tenancies can be created now, other than those under section 34 of Housing Act 1988, new HB claims from those with regulated tenancies may occur.

724. The regulated tenancy rules apply to the tenancy and not the property and therefore in general any new tenancy on a property, which was formerly a regulated tenancy, will not be regulated.

725. The tenancy will cease to be a regulated tenancy if the tenant to whom the tenancy was originally granted leaves the property. However, if the original tenant dies the regulated tenancy may be transferred to his or her spouse, or someone living with the tenant as husband or wife. The regulated tenancy cannot be transferred to other members of the family.

726. If a LA believes a claim for HB is from a claimant who has a regulated tenancy, they should consider the paragraphs above and the guidance from the Department for Levelling Up, Housing and Communities (DLUHC) or Scottish Government, as appropriate.

727. LAs in England and Wales should refer to the booklet Regulated Tenancies published by DLUHC.

728. Scottish LAs should refer to guidance from the Scottish Government.

729. The tenancy will not be a regulated tenancy if the landlord is:

• a LA

• a new town development corporation

• a Housing Association registered with the Housing Corporation

• a Housing Trust which is a registered charity

• the Housing Corporation

• a government department

730-739

Subsidy and regulated tenancies

740. From April 2004 qualifying expenditure in regulated rent cases has received 100% subsidy. As other subsidy controls do not apply to these cases it is important that LAs keep records that clearly demonstrate these cases are regulated cases.

741. LAs should be able to provide evidence that the tenancy is regulated to claim subsidy. Ideally this would be a copy of the tenancy agreement or other documentation that establishes the tenancy started before 15 January or 2 January 1989. Where such evidence is not available LAs should document their reasons for treating the case as a regulated tenancy.

742-749

The eligible rent – the pre-1996 rules (old scheme cases)

750. Old scheme cases are those which have the eligible rent assessed using the rules which were in force on 1 January 1996. They are

• those who have been continuously entitled to benefit since 1 January 1996 from the same address, subject to permitted breaks in the award and permitted periods in other accommodation, and

• those who have claimed before and since 1 January 1996 and who live in ‘exempt accommodation’.

Continuously entitled to benefit

751. This means:

• a person whose original claim was assessed prior to 2 January 1996 and has been continuously in receipt of HB at the same dwelling since that date. A change of dwelling due to fire, flood, explosion or natural catastrophe rendering the first dwelling uninhabitable is permitted. Certain breaks in the award are also permitted. See paragraph 4 of Schedule 3 to the Housing Benefit and Council Tax Benefit (Consequential Provisions) Regulations 2006.

• Note: Cases backdated to before that date are included in this exemption provided the claimant was in occupation of the dwelling on or before 1 January 1996 and was liable to pay rent.

• the partner of somebody, whose original claim was assessed prior to 2 January 1996 and who has been continuously in receipt of HB at the same dwelling since that date (subject to permitted moves or breaks in the award), where the original claimant has died, been imprisoned, or has left the household, and the new claim is made within four weeks.

Exempt accommodation

752. Exempt accommodation is accommodation provided by a non-metropolitan county council in England, a housing association, registered charity or voluntary organisation if that landlord, or someone acting for the landlord, also provides the claimant with care, support or supervision.

753-759

Calculation of subsidy in pre-1996 cases

760. To calculate the eligible rent for subsidy purposes, use the rent officer’s determination of the claim-related rent which will already be net of all ineligible charges, e.g., fuel, water charges, laundry, cleaning, etc unless the tenant occupies accommodation where the landlord provides substantial board and attendance. In these cases, the rent officer will return a claim-related rent, which may include an amount for meals from which the standard deduction for meals should be made.

761. The following examples show how to calculate the eligible rent for subsidy purposes:

Example 1

A contractual rent of £150.00 inclusive of water charges, cleaning and laundry is referred to the rent officer. You value the water charges as £2.00. The rent officer notifies you of the following determinations:

Claim-related rent (CRR) (size related) = £90.00 (excluding ineligible items)

Total value of ineligible items = £5.00

Eligible rent for 100% subsidy is: £90.00

Example 2

A contractual rent of £120.00 per week includes a breakfast each day, laundry, cleaning and water. The rent officer notifies you of the following determinations:

The RO will notify CRR = £75.00 (exceptionally high excluding ineligible items at £4.50)

You deduct breakfasts at £2.45 = £2.45

Eligible rent for 100% subsidy is: £75.00 - £2.45 = £72.55

762-769

Rates of subsidy for pre-1996 cases

770. In general, no subsidy will be payable on HB attributable to rent above the rent officer’s determination. However, there are exceptions to this general rule. These are when:

• LAs are satisfied that the claimant could have met their rent when they took on the liability and that they did not claim HB within the previous 52 weeks to their claim. This means that the claimant will be entitled to HB based on the contractual rent, less ineligible charges for the first 13 weeks. The effect is that for that period full subsidy will be paid, or

• a LA concludes that it is unable to reduce the eligible rent under the provisions of the old regulations 13(4), (5) and (7) and 13ZA. Subsidy at the rate of 60% will be payable on HB attributable to that part of the eligible rent which exceeds the rent officer’s determination, see HB/CTB Guidance Manual, A4.960, Eligible rent

771. Where the eligible rent used in the HB calculation exceeds the rent officer’s determination, nil or 60% subsidy will apply to HB attributable to the excess. For example, if the eligible rent used to calculate HB exceeds the rent officer’s determination by £10, the first £10 of any HB awarded will attract a reduced rate of subsidy (60% or nil). The following examples show how subsidy should be calculated.

Example 1

Rent significantly higher than rents for similar tenancies. The LA cannot restrict HB under the old regulations 13(4), (5) and (7).

CRR = £50.

Eligible rent figure used to calculate HB = £70.

Since the eligible rent is £20 above the CRR the first £20 of any benefit awarded will attract a reduced rate of subsidy (60%).

If HB is £70, subsidy is 60% on £20 (£70-£50) and 100% on £50.

If HB is £30, subsidy is 60% on £20 and 100% on £10.

If HB is £20 or less, subsidy is 60% on amount paid.

Example 2

Rent significantly higher than rents for similar tenancies. The old regulations 13(4), (5) and (7) do not apply; the LA restricts HB but not to the level of the determination.

CRR = £30

Eligible rent figure used to calculate HB = £45

Since the eligible rent is £15 above the CRR the first £15 of any HB awarded will attract nil subsidy

If HB is £45, subsidy is nil on £15 (£45-£30) and 100% on £30

If HB is £20, subsidy is nil on £15 and 100% on £5

If HB is £15 or less, no subsidy is payable

Example 3

Rent too high and the claimant is over-accommodated. The LA cannot restrict HB under the old regulations 13(4), (5) and (7).

CRR = £35

Eligible rent figure used to calculate HB = £47

Since the eligible rent is £12 above the determination, for the first 13 weeks the first £12 of any HB awarded will attract a full rate of subsidy. Thereafter, since the eligible rent is £17 above the CRR, the first £17 of any HB awarded will attract a reduced rate of subsidy

If HB is £47, for first 13 weeks subsidy is 100% on £47; after 13 weeks subsidy is 60% on £12 (£47-£35) and 100% on £35 (CRR)

If HB is £30, for first 13 weeks subsidy is 100% on £30; after 13 weeks subsidy is 60% on £12 and 100% on £18

If HB is £12, for first 13 weeks subsidy is 100% on £12; after 13 weeks subsidy is 60% on £12

Example 4

Supported accommodation provided for the elderly by a voluntary organisation. The LA cannot restrict the HB under the old regulation 13(4). Service charges included in the rent are for general counselling and support only.

CRR = £50

Eligible rent figure (net of support charges) used to calculate HB = £60

Eligible support charges = £20

If HB is £60, subsidy is 60% on £10 (£60 - £50), 100% on £50

If HB is £30, subsidy is 60% on £10, 100% on £20

If HB is £10 or less, subsidy is 60% on the amount paid

772-779

Maximum rent cases (new scheme cases)

780. Maximum rent cases are rent allowance cases that do not fall to be administered under the pre-1996 rules or cases where referral to the rent officer is not required, which have their eligible rent decided under the rules that were introduced from 2 January 1996.

781-789

Subsidy in maximum rent cases

790. Subsidy is paid at 100% up to the maximum rent as determined by the lowest of the rent officer’s determinations.

791. For detailed guidance on the maximum rent to be used in the calculation of the eligible rent for HB in these cases, see HB&CTB Guidance Manual (DWP) Chapter A4.1330, Eligible Rent.

792-799

Registered Social Landlord cases

800. For England and Wales the 1996 Housing Act refers to Registered Social Landlords (RSL) rather than Registered Housing Associations. Provided they are registered with the Housing Corporation, RSLs includes:

• Housing Associations
• local housing companies
• other organisations

801. In England and Wales all Registered Housing Associations are RSLs.

802. In Scotland, the term RSL can also include organisations which do not fully meet the conditions for statutory registration. You should therefore check that an RSL in Scotland is a Registered Housing Association which is statutorily registered under Part I of the Housing Associations Act 1985.

803-809

Rent officer referrals in respect of RSL tenancies

810. Paragraph 3 to Schedule 2 of the HB (General) Regulations states that an application for a rent officer determination, where the landlord is a RSL, including housing co-operatives that are registered as RSLs and hostel cases where the rent is set by an RSL, must be made when the LA considers that the:

• rent payable for the dwelling is unreasonably high, or

• accommodation is larger than is reasonably required by the claimant and their household who occupy the dwelling (‘over accommodation’). From 1 April 2013 this ground for referral applies only to pension-age cases. Over-accommodated working-age claimants are now dealt with via the maximum rent (social sector) rules.

811. For more details see HB&CTB Guidance Manual (DWP) A4.1440, Eligible rent.

812. If the rent is not unreasonably high and there is not over accommodation, then such tenancies are excluded tenancies and need not be referred.

813-819

Subsidy in RSL cases

820. Where referral to the rent officer is not required then subsidy may be claimed on the full value of the HB-eligible rent determined in accordance with the HB Regulations.

821. If a tenancy of an RSL is referred to the rent officer because the accommodation is too large or the rent is unreasonably high, then the maximum rent rules apply to the determination of the eligible rent.

822. If the RSL provides care, support or supervision, the accommodation is exempt accommodation. The rent officer determination will be for subsidy purposes but could also be used as a guide on the level of restriction that is appropriate, if any.

823-829

LHA cases

830. LHA rules apply to new claims made on or after 7 April 2008 and to existing awards but only following a change of address.

831. Claims subject to the LHA rules should not be referred to the rent officer.

832. However, some new claims on which rent allowance may be paid are not subject to the LHA rules.

833-839

Cases exempt from the LHA rules

840. Cases that are exempt include:

• RSL cases

• protected exempt accommodation cases:

  • that is, cases protected under paragraph 4 of schedule 3 (Transitional and Savings Provisions) of the Housing Benefit and Council Tax Benefit (Consequential Provisions) Regulations 2006. To satisfy this definition the landlord must be:

  • a non-metropolitan county council in England, housing association, registered charity or voluntary organisation, and

  • the tenant must be provided with care, support or supervision by either the landlord or someone acting directly on their behalf. In the latter there must be interposition not merely that the landlord be part of a group co-ordinating care, support or supervision. The landlord must have ultimate responsibility. If the organisation concerned is providing care but is not itself the landlord, its tenants are not exempt from LHA:

• a regulated tenancy

• a large-scale voluntary transfer has taken place

• exceptional cases, e.g., caravans, houseboats, mooring fees, mobile homes and hostels

• board and attendance cases

841. The above list is not exhaustive and LAs should refer to regulation 13(C)5 of SI 2006/213 as inserted by SI 2007/2868.

842. Where a case is excluded from the LHA rules LAs must consider if referral to the rent officer in required.

843. For further guidance on LHA cases LAs should refer to the guidance Local Housing Allowance (LHA) guidance manual (publishing.service.gov.uk).

844-849

Subsidy in LHA cases

850. Subsidy may be claimed at 100% for correctly paid benefit in cases that are subject to the LHA rules.

851-859

Referral to the rent officer

860. A frequent reason for the incorrect claiming of subsidy in rent allowance cases is the failure to refer relevant cases to the rent officer.

861. All rent allowance claims must be referred to the rent officer unless they are excluded by schedule 2 of the Housing Benefit Regulations 2006 (SI 2006 No 213). The most common reasons why a rent allowance claim is excluded from referral to the rent officer are:

• the tenancy is a regulated tenancy; see Regulated tenancies earlier in this section
• the claim is from a tenant of a RSL, and the LA does not:
  • consider that the rent payable for the dwelling is unreasonably high, or
  • the accommodation is larger than is reasonably required by the claimant and their household who occupy the dwelling, see Rent officer referrals in respect of RSL tenancies earlier in this section
• an earlier referral to the rent officer was less than 52 weeks ago
• claim relates to a dwelling in a hostel, as defined in regulation 14 of the Housing Benefit (General) Regulations, and
  • a rent officer has made a determination for similar accommodation in the same hostel in the previous 12 months, and:
  • there has been no change to that accommodation (as referred to above)
  • the claim is administered under the LHA rules – see Local Housing Allowance cases earlier in this section 862-869

Referral to the rent officer in certain Housing Association schemes

870. In private rented sector cases when a Housing Association or a RSL acts as a managing agent for the private landlord (HAMA schemes), LAs have a mandatory duty to make a referral to the rent officer.

871. When a Housing Association/RSL leases a property and is the landlord for the tenants, the arrangements for referrals in respect of RSL cases earlier in this section apply.

872. This list is not exhaustive and LAs should refer to schedule 2 to the Housing Benefit (General) Regulations 2006 (SI 2006 No.213).

873. Where no referral to the rent officer has been made but the tenancy is not an excluded tenancy, as defined in schedule 2 to SI 2006/213, then subsidy should not be claimed.

874-879

Further applications for rent officer determinations

880. In general, once a rent officer has made a determination in respect of a particular dwelling, it will be used for a benefit award until a further determination is acquired following an application to the rent officer which has to be made 52 weeks after the date the previous application was made. Throughout the period of the award for which a rent officer determination is used, no increase in that rent will be considered for HB purposes unless it is a relevant change in circumstances, see paragraph 883. A subsequent rent officer determination is implemented in the award by a superseding decision.

881. Unless entitlement to benefit is ended as a result of the determination, when the rent officer’s determination increases or remains unchanged, if the rent is paid:

• weekly or in multiples of weeks, the effective date will be the first day of the benefit week in which the day following the last day of the 52-week exclusion occurs. The previous rent officer’s determination should be used for the award up to the week before
• other than weekly, for example if the rent is paid monthly, the decision will take effect on the first day following the last day of the 52-week exclusion occurs. The previous rent officer determination should be used for the award up to the day before.

882. When the determination has decreased, the effective date of the decision will be the first day of the benefit week following the date the LA receives the rent officer determination.

883. However, circumstances may arise where an LA must make a further application for rent officer determinations where one or more of the following apply:

i. There is a substantial change in the condition of the dwelling, e.g., major structural repairs or improvements, and the rent has increased as a result

ii. There is a substantial change in the terms of tenancy, for example, a transfer of the repairing obligation to the landlord or a change in the number of rooms available for the tenant’s use

iii. There is a rent increase provided for in a term of the tenancy that was in place at the time of the original determination. The term of the tenancy may be written or verbal. However, a further application for a rent officer determination may not be made in these cases if the rent officer has already determined that the rent is above market levels, or the dwelling is over-large, or the market rent is exceptionally high

iv. A new tenancy is awarded to either the same or a new tenant and the terms of the tenancy are different, with the exception of terms relating to rent, for example, where a short hold comes to an end, or a new tenant strikes a fresh bargain with the landlord

v. The number of occupants in a particular dwelling changes, except where the claimant has a bed in a hostel and the number of bedspaces has not changed

vi. As soon as a child (or children) sharing a room with a child of the opposite sex reaches the age of ten and the accommodation was deemed to exceed the size criteria at the time of the original referral

vii. As soon as a child (or children) reaches the age of 16 and the accommodation was considered to exceed the size criteria at the time of the original referral

viii. There is a change to the composition of the household but there is not a change to the number of occupiers

884-889

Re-determinations

890. When a claimant requests a review of the LAs HB assessment, and the representations concerning their decision relate to the rent officer’s determination, the LA must apply to the Chief Rent Officer for its area for a re-determination of the original determination. In cases when the LA considers there are good grounds for applying for a re-determination, it may do so on its own initiative, whether or not the claimant requests a review.

891. An LA may seek a re-determination at any time following the original decision. If the claimant requesting a review, within six weeks of receiving the decision, triggers the application to the rent officer it should be made within seven days of receiving representations from the claimant. See Appendix B for relevant details of effective dates of rent officers’ determinations.

892. Authorities may notify the Chief Rent Officer of any relevant information and must pass on the claimant’s representations.

893. Since 3 April 2000, an LA may, of its own volition, seek one re-determination without written representations from the claimant. The application for re-determination can be made at any time during the life of the current rent officer determination. Claimants can still seek a re-determination, but in general they can only seek one re-determination of any rent officer determination - see HB&CTB Guidance Manual (DWP) A4.2100, Eligible rent.

894. The re-determination will be made within four weeks of the application or as soon as is reasonably practicable thereafter. The rent officer who made the original determination will not be part of the re-determination procedure.

895. The outcome of the re-determination will be notified to the LA. Where the LA has requested it to do so, the review panel will include the reasons for its decisions in the notification of the results of the review. It will then be for the LA to consider the benefit position.

896. If, following a re-determination, the rent officer provides a higher determination, the re-determination will apply for subsidy purposes from the effective date of the original determination.

897. If the re-determination is lower than the original, the effective date for subsidy purposes will be the date of the re-determination or the following Monday.

898-899

Supply of rent officer information to claimants

900. There is a minimum amount of information LAs are required to make available about each of their determinations of HB, as set out in the Housing Benefit (General) Regulations.

901. Regulation 90(2) allows claimants to get enough detail to check the factual basis of a LAs decision of an HB awarded. Authorities can, therefore, provide claimants with details of the rent officer’s relevant determinations if requested, or include it in a statement of reasons if one has been sought.

902. Copies of rent officers’ original determinations should not be passed to claimants.

903-909

Failure to refer relevant cases to the rent officer

910. If an LA fails to make an application for a rent officer determination in respect of a case that falls within the scope of the arrangements:

• within the relevant year, or
• before the due date for the submission of the subsidy claim for the relevant year

any HB awarded will not qualify for subsidy.

911. This also applies to RSL tenancies if the LA considers that the rent payable for the accommodation is unreasonably high or that the accommodation is larger than is reasonably required by the claimant and any others who occupy the dwelling but makes no application for a rent officer determination.

912-919

Transfer of housing authority stock to the private sector

920. Housing authority stock may be transferred to the private sector through:

• voluntary transfers
• tenants’ choice
• New Towns and Scottish Homes Transfers
• Housing Action Trusts (HATs)
• transfers that take place at the end of the lifetime of a HAT

921. In these cases, it is not necessary to make a referral on the original rent as rent levels will be controlled at the point of transfer. However, once the first rent increase after transfer has taken place, LAs are required to consider whether the tenant is over-accommodated or the rent unreasonably high. If this is the case, the claim must be referred to the rent officer in the normal way.

922. However, when the transfer of a tenancy took place on or after 7 October 2002, LAs must continue to refer those tenancies where the rent is unreasonably high but are no longer required to refer such tenancies where the person is over-accommodated. Transfers made to other private landlords are subject to the normal rent officer referral arrangements. Cases that do not have to be referred at this stage are not subject to the subsidy controls.

923-929

Representative cases in hostels

930. Special arrangements relate to hostel cases when one rent officer determination can be applied to similar accommodation within a particular hostel. The rent officer’s determination will generally apply for 12 months, but see further applications for rent officer determinations, earlier in this section for more details.

931. When an application for a rent officer determination has already been made, LAs should apply the rent officer determination to any other claims in respect of similar accommodation within the same hostel. This means that no application for a determination is required for these similar cases.

932. Regulations define ‘similar accommodation’ as that which provides sleeping accommodation for the same number of people, in other words, single rooms, double rooms, etc.

933. An additional referral may be required to obtain a single room rate where appropriate.

934-939

Hostel cases – tenancies entered into before 2/15 January 1989

940. Tenancies entered into before deregulation are not subject to rent officer referral.

941-949

Joint tenancies

950. In the case of joint tenancies, rent officers must look at the full rent payable under the terms of a tenancy, not just the share of one of the joint tenants, to make their determination. On receipt of the determination, you should apportion it in accordance with regulation 12B (4) of the Housing Benefit (General) Regulations.

951. To assist LAs in the apportionment, although not a requirement, rent officers may provide an assessment of the value of the joint tenant’s share of the accommodation, although this is a matter for discussion between LAs and their Chief Rent Officer. The rent officer’s apportionment is not binding – LAs are responsible for deciding on the proper apportionment.

952. If a rent officer has made a determination in respect of the full rent payable for the tenancy, and a new claim for HB is made by one of the joint tenants, a further application to the rent officer cannot be made unless it has been 52 weeks since the previous application for a rent officer determination was made.

953-959

Sub-tenancies

960. In the case of claimants who are sub-tenants, rent officers are required to consider the reasonableness of the rent paid by the sub-tenant. For these cases you should advise the rent officer of the rent paid by the sub-tenant.

961-969

Payments on account and indicative rent levels

970. Where a claim for benefit is made that will not be subject to the local housing allowance a LA must make a payment on account when it is impractical for a decision to be made on a claim for rent allowance within 14 days of the claim having been made.

971. The claimant must not have contributed to the impracticality, for example by failing to provide, without good cause, information, certificates, documents or other evidence that the LA requires to allow it to make a decision.

972. The payment on account should be an amount which the LA considers reasonable having regards to:

• available information about the claimant’s circumstances, and
• any relevant determination made by a rent officer

973. Indicative Rent Levels (IRLs) are maximum amounts up to which LAs may make payments on account and be protected for subsidy purposes. They are not calculated for each locality but will apply to the whole of a LAs area. Where there are extremes of rental values within this area, the IRL may be over-generous for properties at the lower end of the market.

974. To avoid overpayments, caution should be exercised when deciding on the level of a payment on account and the following should also be borne in mind:

• The IRL for board and lodging cases should only be used in genuine cases where the landlord physically provides meals. The determination should be reduced by the appropriate deductions for fuel, board and water charges
• The IRL for non-self-contained accommodation should be reduced by the appropriate deductions for fuel and water charges
• For joint tenancies, use the IRL for the number of rooms in the property and apportion according to the claimant’s share
• If the LA considers the claimant to be over accommodated, it should use the IRL for the appropriate size criteria

Note: See Appendix B for relevant details of effective dates of rent officers’ determinations.

975. IRLs are no longer published monthly by the rent officer and are now only provided upon request by the LA.

976. Where a LA requires the use of an IRL to make a payment on account, they will need to request one from the Rent Service.

977. IRLs will be exclusive of ineligible services but in non-self-contained accommodation will be inclusive of fuel, water charges and, where relevant, board.

978. Rent Officers will not supply IRLs for:

• dwellings with more than six rooms
• site rents
• mooring charges
• dwellings with rental purchase agreement

979. As LAs are unable to determine new scheme cases until the rent officer has given a determination, the IRL can be used only to inform decisions on the level of the payment on account.

980. If the IRL is used to calculate and make a payment on account for an HB claim, and the rent officer’s determination is lower, LAs will receive full subsidy on HB attributable to rent up to the level of the IRL until the rent officer’s determination is made. Any revised benefit determination will also have to be notified to the claimant in the usual way. If the rent officer’s determination is higher than the IRL, LAs can review their decision and pay up to the level of the rent officer’s determination. The review can receive full subsidy on rent up to the level of the rent officer’s determination.

981. Where the IRL is used to inform the LA as to the level of a payment on account, the arrangements contained in paragraphs 982-994 will apply.

982. If the rent officer’s full determination, once received, results in an eligible rent which is less than the IRL, LAs are required to recover the excess payment on account from ongoing benefit.

983. When the final determination removes entitlement to benefit or the claim ceases for other reasons, overpayment action should be taken. The IRL overpayment should be calculated as follows:

Referred rent for single non-self-contained accommodation: £55.00

Payment on account calculated as follows:

IRL = £46.00
less fuel = £6.63
less water charges = £0.90

Total = £38.47

Rent officer’s determination below IRL: £43.00 HB eligible rent calculated as follows: £43.00

less ineligible services = 0.50
less fuel = 6.63
less water charge = 0.90

Total = 34.97

Weekly IRL overpayment £3.50

984-989

Overpayment recovery action

990. LAs will be expected to take normal overpayment recovery action. When LAs are unable to recover all or part of the overpayment caused by the difference between the final determination (and consequent eligible rent) and the payment on account, full subsidy will be paid on the unrecovered amount. This provision is dependent on the

• IRL or other relevant determination of a rent officer used corresponding to the number of rooms available to the claimant, and

• LA using the IRL which was current at the time it decided to make payments on account

991. Any recovered amounts are not eligible for subsidy. Subsidy should be claimed on amounts which are unrecovered at the end of the financial year. Should a LA recover in the 2008/09 financial year an overpayment which occurred in 2007/08, it will reduce the subsidy claimed for IRL/payment on account overpayments at the end of the 2008/09 financial year.

992. In cases where LAs:

• continue to make a payment on account immediately after the Monday following receipt of the rent officer’s determination, or

• make a payment on account for a future period and the Monday following receipt of the rent officer’s determination falls within this period

that portion of the overpayment will change its status to LA error.

993. If payments on account are made using an IRL and it becomes apparent that all or part of the weekly payment should not have been made, for example, because there had been a fraudulent claim, and there is no benefit entitlement from which the payments can be clawed back, the overpayment should be classified as if the IRL had not applied. Subsidy should be claimed at the rate applicable to the overpayment type.

994. When there is no IRL, for example in cases involving site rents, the payment on account provisions will apply. Overpayments should not be dealt with under the IRL subsidy provision.

995-999

Subsidy in payment on account and IRL cases

1000. Subsidy may be claimed at 100% in respect of payments made on account/IRL cases and LAs do not have to reclassify the expenditure when they receive the rent officer’s determination.

1001. If when the rent officer’s determination is received it indicates that a payment on account has resulted in an overpayment, the overpayment must be recovered. HB regulation 99(3) refers. The overpayment should be recorded in the appropriate IRL overpayment cell.

1002-1009

Queries

1010. If you have any queries concerning the content of this section, contact the Local Authority Partnership, Engagement and Delivery Division at lawelfare.lafunding@dwp.gov.uk

Section 8: Expenditure not to be included as qualifying expenditure because it does not attract subsidy

Introduction

1100. Some HB expenditure does not qualify for subsidy and, therefore, should not be included as HB qualifying expenditure.

1101-1109

Differential rent schemes (The modular improvement rule)

1110. If an LA tenant can choose extra or enhanced services or facilities in return for an increase in rent, that increase is ineligible for subsidy if subject to a rebate. The intention is to prevent the Exchequer facing extra costs from modular improvement schemes targeted solely or mainly at tenants on rebates.

1111. This exclusion applies not only to HB awarded to tenants who have been given a choice but also applies to ‘negative choice’ situations, in other words, where the LA offers to make improvements unless the tenant declines.

1112. A modification to the rule was introduced in financial year ending (FYE) March 1995 whereby authorities may apply for exemption if all the following criteria apply:

• Its improvement scheme is made available solely according to the physical needs of properties in its stock, and the services needed by tenants.

• Tenants are eligible to participate in the scheme and make choices about extra or enhanced services or facilities and increased rent/service charge levels, regardless of whether they are in receipt of a rent rebate.

• The LA, either in the relevant year or in the two previous years, has, or had, no policy or practice of letting houses or flats targeted for modular improvements solely or largely to tenants who are in receipt of, or are likely to become entitled to, rebates.

• The additional rents and service charges levied reasonably reflect the services, facilities and rights provided.

1113. It is the responsibility of the LA to convince its external auditors that exemption from the rule should apply. Auditors may qualify any claim if they are not satisfied that these conditions have been met and that, therefore, subsidy has been inappropriately claimed. In these circumstances, the LA will be required to make a subsidy deduction in accordance with the modular improvement rule.

1114-1119

Rent-free weeks and credits

1120. Where an LA operates a system of ‘rent-free’ weeks, subsidy may be claimed only for weeks where rent is due. Subsidy may not be claimed for any week for which a person is awarded a rent credit, whether or not they are immediately entitled to that credit.

1121-1129

Awards to tenants

1130. If an LA makes a cash payment to tenants in receipt of HB, or some other payment in kind, subsidy will be reduced by the amount of the payment awarded unless the award is one of those listed in paragraph 1132.

1131. If an award is made in advance or retrospectively, it will be treated for subsidy purposes as having immediate effect. Awards, in those contexts, refer only to payments, in cash or kind, or credits given because the beneficiary is a tenant.

1132. The following awards will not reduce the amount of subsidy payable:

• A grant to a tenant for a reason unrelated to his tenancy, such as a discretionary educational maintenance award.

• An award made by an LA to a tenant which it is required to make by statute.

• A discretionary payment to a tenant made in accordance with section 137 of the Local Government Act 1972 or section 83 of the Local Government (Scotland) Act 1973.

• Reasonable compensation, for repairs or re-decoration carried out by a tenant but which would normally have been undertaken by the landlord.

• Reasonable one-off payments made as compensation to a tenant for loss, damage or inconvenience of a kind that only occurs exceptionally, suffered by the tenant by virtue of occupation of a particular property.

1133. Paragraphs 1130 to 1132 do not affect any adjustment made by an LA to a tenant’s rent account to correct an accounting error, in other words, where the amount paid by the tenant differed from the amount due.

Prior year overpayments

1134. Prior year overpayments are those identified in the year relating to benefit paid in an earlier year.

1135. Prior year overpayments should not be recorded in the total expenditure cells of the relevant year claim.

Recovered overpayments resulting from payments on account

1136. Any recovered overpayments occurring because of a payment on account in a previous year should be excluded from qualifying benefit.

1137-1139

Uncashed payments of HB

1140. Subsidy is not payable in respect of uncashed instruments of payment. Uncashed benefit instruments are not overpayments of benefit and should not be treated as such.

1141. Uncashed payments of benefit include instruments of payment:

• that are generated by computer but are not actually issued
• that are returned uncashed to the LA
• found not to be cashed by their expiry date.

Note: there is no statutorily defined expiry date. A maximum of six months is suggested.

1142. Time delays will occur between the date an instrument of payment is issued and the date an LA becomes aware that it has not been cashed. Authorities are not expected to carry out a reconciliation exercise at the end of the financial year to identify instruments that remain uncashed.

1143. For the purposes of claiming benefit subsidy, instruments of payment that are brought to account at the time of issue can be assumed to have been cashed until the LA discovers otherwise.

1144. Instruments of payment that are issued correctly may be returned uncashed to an LA and subsequently be issued or replaced. Authorities must ensure subsidy is only claimed once. When a replacement payment is made in a case where a payment has been issued that is subsequently returned uncashed, the appropriate rate of subsidy is payable on that replacement.

1145. When an uncashed payment is discovered, authorities must ensure the necessary adjustments are made if subsidy has previously been claimed on these payments. Where this was at a lower rate than 100% then authorities should ensure that a deduction is also made to the appropriate cell.

1146. For instruments of payment that were issued in a previous year, authorities should ensure that the subsidy already claimed in a previous year is deducted from the amount claimed for the relevant year.

1147-1149

Queries

1150. If you have any queries concerning the content of this section for paragraphs 1100 to 1133, contact the Local Authority Partnership, Engagement and Delivery (LA-PED) division at

lawelfare.lapaymentsandsubsidy@dwp.gov.uk

For queries relating to paragraphs 1134 to 1146, contact LA-PED at

lawelfare.lafunding@dwp.gov.uk

1151-1159

Modified schemes

1160. Authorities’ expenditure on increases in benefits awarded to war pensioners or war widows (under sections 134(8) or 139(6) of the Social Security Administration Act 1992) does not qualify for subsidy. The position in such situations is shown below.

1161-1169

Benefit awards to war pensioners or war widows/widowers

1170. There will be no limit set on authorities’ powers to increase benefit for war pensioners and war widows or widowers within the legislation. However, the permitted total for HB expenditure is set at 100.7% of the LAs total HB expenditure when an LA disregards some or all of a:

• war widow’s pension to which regulation 7 of the Income-related Benefits Schemes Amendment (No2) Regulations 1995 (SI 1995/2792) applies, or
• war widower’s pension to which
  • Working Age regulations SI 2006/213, or
  • regulation SI 2006/214 of the regulations (people who have reached pension age) apply.

This is because these awards reflect modifications to schemes under sections 134(8)(b) and 139(6)(b) of the Administration Act 1992.

Additional subsidies to LAs operating a discretionary local scheme

1171. Most LAs currently operate some form of discretionary local scheme for war pensioners. This allows LAs to disregard some or all of any War Disablement Pension or War Widow’s/War Widower’s Pensions over and above the statutory limits.

1172. Currently there are two types of disregards for War Pensions:

• a statutory disregard is applied to War Pensions in calculating entitlement to HB. In addition, there is a statutory disregard of (rates are uprated annually by the Veterans Agency) for pre-1973 War Widows’ Pensions. Statutory disregards are fully subsidised
• a discretionary local scheme under which an LA can apply for a further disregard up to the full amount of any War Pension in payment. Any additional benefit granted, due to a disregard above the statutory levels, is not subsidised, but is funded from the LAs own resources

1173. From April 2004, LAs operating a local scheme will receive 0.2% addition to their annual subsidy, capped at 75% of the total benefit cost to the LA of the local scheme.

1174. The rationale behind this change to the subsidy rules on discretionary local schemes is to provide recognition through the subsidy system of the existence of such schemes in LAs. It does not relate to the extent of the disregard that the LA applies, which remains a matter for individual LAs.

1175-1179

Queries

1180. If you have any queries concerning the treatment of War Pensions – Local Schemes (paras 1160-1172), contact LA-PED at:

lawelfare.lapaymentsandsubsidy@dwp.gov.uk

addition of subsidy (paras 1171-1174), contact:

lawelfare.lafunding@dwp.gov.uk

1181-1199

Section 9: Rent rebate subsidy limitation

Introduction

1200. Rent rebate subsidy limitation (RRSL) applies to LAs in Wales. Rent rebate subsidy limitation was introduced to give LAs an incentive to control expenditure and the level of rent increase. When a LA increases its average weekly rent above a limit set in Wales by the Welsh Government, it will receive subsidy on rebates up to the limit and receive reduced HB subsidy on all HB rent rebate expenditure above the limit rent.

1201. RRSL applied to LAs in England until 31 March 2020. From 1 April 2020, the government directed the Regulator of Social Housing to apply its rent standard to both LA registered providers and private registered providers (the vast majority of which are housing associations).

1202. From 1 April 2020, the Department for Work and Pensions disapplied the RRSL scheme in HB subsidy for England only following the introduction of the new rent standard, as notified in circular HB S11/2019 revised. The new rent standard regulates LA rent increases in the same way as other social rented sector rents. The Department for Levelling Up, Housing & Communities (formerly The Ministry of Housing, Communities and Local Government) no longer issues LAs with Limit Rent figures, as it did in previous years.

1203-1209

Data collection

1210. In Wales, the responsibility for collecting base data and calculations necessary to implement rent rebate subsidy limitation also changed in April 2015. The rent information used to be based on the Guideline Rent system which was an integral part of the Housing Revenue Account Subsidy (HRAS) system. The based data used within rent rebate subsidy limitation was formerly collected by the Welsh Government directly from the eleven-stock retaining LAs HRAS claim forms.

1211. In April 2015, Welsh LAs exited the HRAS system, became self-financing and at the same time implemented the new Welsh Government Policy for Social Housing Rents. This meant LAs were no longer required to submit HRAS claim forms to the Welsh Government each year.

1212. Consequently, new arrangements were introduced to enable DWP to collect the base data directly from LAs in Wales from April 2015. Changes were also introduced to the rent rebate subsidy limitation arrangements to facilitate the move from the former Guideline Rent system to the new policy for Social Housing Rents.

1213. DWP revised the Statement of LA claimed entitlement to Housing Benefit subsidy (form MPF720C) to ensure the appropriate data is collected directly from LAs for the calculation of rent rebate subsidy limitation.

1214. The Limit Rent is now calculated by the Welsh Government each year using key outputs from the policy for Social Housing Rents. The Welsh Government advises DWP of the Limit Rents each year.

1215-1219

Action where properties fall under the new Rent Standards in England

1220. In England, where properties fall under the new Rent Standard for which HB has been paid and subsidy has, or is to be claimed, as Housing Revenue Account (HRA) Rent Rebate the following action is required:

• at the point that either the LA or the Regulator of Social Housing identify rent has been set by the LA that is not compliant with the Rent Standard, the LA must assess the impact of this on any affected HB claims and recalculate HB assessments.

• for the purposes of claiming HB subsidy, any resulting overpayment as a direct result of a non-compliant rent being charged for LA housing stock under the new Rent Standard will need to be calculated and classified as a ‘technical overpayment’ for either the current year or previous year, as appropriate.

1222-1224

Average weekly rent (Q)

1225. ‘Rent’, in relation to a dwelling, means the total of the payments in respect of the dwelling specified in regulation 12(1)(a) of the Housing Benefit Regulations, other than a payment specified in regulation 12(1)(e), in other words, payments of, or by way of, service charges, payment of which is a condition on which the right to occupy the dwelling depends.

Rent rebate subsidy limitation calculations for LAs in Wales

1270. LAs need to make a comparison between the subsidy limitation rent and the weekly limit rents to establish whether they will be liable for a deduction. The weekly limit rents for the relevant year are contained in Appendix F. The subsidy limitation rent calculation, together with the deduction from subsidy calculation, is described in the following paragraphs.

Subsidy limitation rent calculation

1271. An LA in Wales will be liable to a subsidy deduction when O + P is less than Q, when:

• for financial year ending (FYE) March 2022 is the amount specified in column 1 of Appendix F which is the total of “O” for FYE March 2021 and “P” for FYE March 2021

• P for FYE March 2022 is the amount specified in column 2 of Appendix F

• Q is the average weekly rent for a dwelling for the LA for the relevant year (see section 1275 below)

1272-1274

Calculation of Q

1275. The average weekly rent for a dwelling for the LA for the relevant year is calculated by:

i. dividing the total rent charged for all dwellings in the HRA in the relevant year by

ii. the total number of weeks for which rent was charged for all dwellings in the HRA in the relevant year *

Note: Void dwellings are excluded from the calculation. A ‘void dwelling’ means a dwelling that is unoccupied.

Example

An LA has three HRA dwellings.

Rent is charged for 52 weeks on property 1, 46 weeks on property 2 and 48 weeks on property 3.

Add the 52 weeks, 46 weeks and 48 weeks.

This produces 146 weeks.

Dividing the total rent charged for the relevant year for example £10,000 by 146 weeks produces an average weekly rent of £68.49.

Please note rent free weeks should be included when calculating the number of weeks for which rent is charged. For example, an LA may charge rent for 50 weeks but allow two rent free weeks. For the purposes of calculating the average weekly rent the two rent free weeks should be included in the calculation. So instead of using 50 weeks, 52 should be used.

1276-1279

Amount of deduction from subsidy

1280. The amount of the deduction from subsidy referred to in Article 20A(b) should be calculated as follows:

Step 1

Divide the number of rebates granted in the relevant year in respect of dwellings in the HRA by the income for the relevant year from rent (including rent remitted by way of rebate) in respect of such dwellings.

Step 2

If the result of Step 1 does not exceed 0.682 (the rebate proportion in Wales for FYE March 2022. This may change annually depending on the proportion of HRA expenditure compared to rental income).

i. deduct (O + P) from Q

ii. divide the result of i by Q

iii. multiply the amount of the subsidy (apart from any deduction to be calculated under Schedule 4A) by the result of ii

If the result of Step 1 exceeds 0.682 (the rebate proportion in Wales for the relevant year)

i. deduct (O + P) from Q

ii. divide the result of i by Q

iii. divide the rebate proportion for Wales, i.e., 0.682 by the result of Step 1

iv. multiply the result of ii by the result of iii

v. multiply the amount of the subsidy (apart from any deduction to be calculated under Schedule 4A) by the result of iv.

1281-1289

Legislation

1290. A deduction will be made where the subsidy limitation rent for the relevant year is above the weekly rent limit specified in Part 4 (Wales) of Schedule 4A to the Income-related Benefits (Subsidy to Authorities) Order 1998 (1998/562) as amended by the Income-related Benefits (Subsidy to Authorities) Amendment Order (SI 2021 No 1031).

1291-1299

Derogations

1300. DWP Ministers are prepared to consider granting full or partial exemption from rent rebate subsidy limitation for the relevant year. Where a LA can demonstrate that, due to exceptional and unforeseeable circumstances outside of its control they needed to set for the relevant year:

• the aggregate of its average weekly rent above the level at which rent rebate subsidy limitation applies (in the amending Subsidy Order (SI 2021 No 1031), and

• they would face significant, or complex financial difficulties, in the relevant year in its HRA without a derogation.

1301. Applications should be submitted to Welsh Government in the first instance. Final decisions will be made by DWP Ministers based upon advice from Welsh Government and DWP, which will place the application in the full subsidy and policy context.

1302-1329

Queries

1330. If you have any queries concerning the content of this section, contact the Local Authority Partnership, Engagement and Delivery division at lawelfare.lafunding@dwp.gov.uk

1331-1339

Section 10: Administration costs

Introduction

1400. Authorities were notified of their DWP HB administration subsidy allocation before the start of the relevant year. The overall DWP HB administration subsidy is cash-limited and there is no provision for any adjustment to be made to individual LA allocations. DWP HB administration subsidy distribution for the relevant year is shown at Appendix D.

1401-1409

Details of DWP administration subsidy distribution in the relevant year

1410. For financial year ending (FYE) March 2022 the total distributed amount of administration subsidy for HB is £192,301,109. Appendix D shows the individual allocations for each LA in England, Scotland and Wales.

1411. This funding is calculated by deducting the Universal Credit (UC) reduction to the FYE March 2022 HB administration subsidy, which is consistent with DWPs baseline funding.

1412. For FYE March 2022 no departmental efficiency reduction was applied.

UC rollout

1413. The FYE March 2022 HB administration subsidy funding considers the estimated volume of HB claimants moving to Universal Credit (UC). UC reductions of -£3.084 million have been applied to the total amount of the FYE March 2022 HB administration subsidy for Great Britain. This is in addition to the -£27.703 million deducted from the baseline in FYE March 2021 which was a cumulative UC reduction value up to, and including, FYE March 2021.

1414. Universal Credit reductions are profiled across several financial years. The FYE March 2022 UC reductions continue to reflect current polices.

Distribution methodology

1415. This funding is a contribution to the cost of administering HB. DWP, in consultation with the LA Funding Group (which consists of LA Chief Finance Officers and LAA representatives), changed the methodology for allocating HB administration subsidy from FYE March 2020.

1416. The methodology, which commenced in FYE March 2020, uses HB caseload data as of May 2019 and UC housing element caseload volumes. This combined total is used to determine the proportion of core HB administration subsidy allocated to each LA, irrespective of where the LA was on the UC rollout schedule.

1417. The UC reductions were calculated based on the amount of HB Working Age caseload moving to UC. SHBE (Single Housing Benefit Extract) data and UC data was used to determine the expected change in workloads due to UC in FYE March 2022.

1418. For both FYE March 2020 and FYE March 2021, transitional arrangements were applied to prevent LAs experiencing a large change in their allocation relative to the previous FYE March 2019 methodology. FYE March 2022 is the third year and fully allocates funding to LAs without any transitional protection.

1419. Allocations are rounded to the nearest pound.

1420-1429

Payments of subsidy

1430. Payments of HB administration subsidy were made in 12 monthly instalments beginning in April 2021. The overall subsidy available to support HB administration costs is cash-limited and so there is no provision for any adjustments to be made to individual LA allocations.

1431-1439

Queries

1440. If you have any queries concerning the content of this section, contact LA-PED at lawelfare.lafunding@dwp.gov.uk

Section 11: In-year instalments of subsidy and payments of subsidy

In-year instalments of subsidy

1500. The Secretary of State is authorised, under the Social Security Administration Act 1992, as amended by the Housing Act 1996, to pay subsidy to LAs in respect of their administering the HB scheme. The Act requires the Secretary of State to make a Subsidy Order, which specifies the basis for LAs receiving their administration and benefit subsidy.

1501. The Income-related Benefits (Subsidy to Authorities) Order 1998 (the ‘Principal Order’) prescribes the level of administration subsidy, the basic benefit subsidy rate and the circumstances under which lower rates of subsidy will apply. The Order, which is amended annually, provides the legislative base for the revised subsidy arrangements applicable from 1 April each year.

1502. Payments of in-year instalments of subsidy are conditional on:

• an LA’s timely completion of both initial and mid-year claims for subsidy (using form MPF714)

• provision of associated information required by DWP (acting on the Secretary of State’s behalf) to ensure that the level of the payments reflects, as accurately as possible, the likely level of actual HB expenditure and related subsidy.

1503. Payments of subsidy for the months:

• April to September are based on initial claims for HB subsidy that were received by DWP by 1 March prior to the relevant year

• October to March are based on mid-year claims for HB subsidy that were received by DWP by 31 August of the relevant year.

1504-1509

Payments of subsidy

1510. An LA must submit to DWP, by 30 April following the end of the relevant year, a final claim providing details of the actual amounts of benefit paid in the relevant year. In practice, this will involve the accurate completion of form MPF720. At the same time, a copy of the final claim must be presented to the LA’s external auditor for audit.

1511. On receipt of an LA’s final claim, the DWP will, after taking account of in-year instalments paid and any other relevant matters, pay/recover any resultant balance.

1512. The regulations as to audit requirements prescribe

i. that an LA shall make sure that its final claim is audited by its external auditor and presented to the DWP by 30 November following the end of the relevant year, and

ii. an LA’s duty to keep such records and supply such information as is necessary to enable auditors, and where necessary the DWP (acting on the Secretary of State’s behalf), to verify subsidy claims.

1513. If an LA does not comply with the prescribed deadlines given in paragraphs 1510 and 1512(i), DWP may withhold a percentage of its in-year instalments of subsidy pending compliance. The LA will be notified of any withholding by DWP and be given the opportunity to make representations in advance of withholding. It is open to LAs to request extensions to these deadlines. Extensions, which must be requested in writing in advance, will be granted if DWP is satisfied the extension is justified. Extensions will not be granted as a matter of course. If an extension is granted, in-year instalments of subsidy will not be subject to withholding for the period of the extension.

1514. If an LA fails to verify its claim as per paragraph 1512(ii) and further work has not already been undertaken in conjunction with the auditor, DWP will give the LA the opportunity to satisfy the stated requirements within a set timescale. Subsidy may be withheld if work to satisfy stated requirements is not completed within this timescale.

1515. If there has been an overpayment of subsidy, then DWP, acting on the Secretary of State’s behalf, will decide whether, and if so, how much of, the overpayment should be recovered, having regard to prescribed criteria, the individual circumstances in which the overpayment arose and relevant wider considerations. Circular HB/CTB S1/2002 gives further information.

1516. The Secretary of State’s powers to withhold, recover or estimate subsidy are contained in section 140C of the Social Security Administration Act 1992. There are also separate powers to adjust or deduct subsidy. There are inter alia powers in the Social Security Administration Act 1992 to enable the Secretary of State to withhold or estimate HB subsidy in specific circumstances.

1517-1519

Queries

1520. If you have any queries concerning the content of this section, contact LA-PED at lawelfare.lapaymentsandsubsidy@dwp.gov.uk

1521-1599

Section 12: Extended payments of HB

Note: For more information, see circular HB/CTB A12/2008

Extended payments

1600. HB extended payments (EP) were introduced on 1 April 1996 as part of a package of incentives to encourage the long-term unemployed to return to work.

1601. EPs are made to certain people who have been receiving Income Support (IS) or income-based Jobseeker’s Allowance (JSA(IB)) and who cease to be eligible for it because they or their partner start employment or self-employment or increase their hours or wages.

1602. The EP scheme was widened in April 2004 (by S.I. 2004/319) to include persons in receipt of Incapacity Benefit (IB) and/or Severe Disablement Allowance (SDA), and who cease claiming benefit because they or their partner move into employment, or self-employed work, or increase their hours or earnings.

1603. Employment & Support Allowance (ESA) was included as a qualifying benefit from 6 October 2008 and other reforms to the scheme were made by S.I.2008/1082.

1604. Since October 2008, a move into work which results in entitlement to an EP is treated as a change of circumstances on the existing HB claim. The LA must consider whether there is entitlement to an EP when a qualifying benefit ceases for work-related reasons. The LA must also consider whether there is entitlement to in-work HB. Claimants are not required to make a claim for in-work HB at the end of the EP period and they can move into in-work HB provided there is entitlement to it at the end of the EP period. Jobcentre Plus isn’t required to certify to the LA that any of the qualifying conditions for an EP have been satisfied. When a claimant moves from one LA to another during the EP period, the original LA is responsible for paying the EP to the claimant. Circular HB/CTB A12/2008 provides full details of the revised EP schemes.

1605. If there is entitlement to an EP, and there is also entitlement to in-work HB during the EP period, the EP can be increased to the in-work rate of HB if it is higher than the EP rate.

1606. If the EP is increased because of the rate of in-work HB being higher than the original EP rate, this is still classed as an EP.

1607. For example, EP rate for weeks 1 & 2 is £50.00. Weeks 3 & 4 of EP – the rate of in-work HB calculated as £70.00 which is higher than the rate payable for the first 2 weeks. This is regarded as an EP. Therefore, the EP payments made for the whole of the EP period are weeks 1 & 2 - £50.00 per week and for weeks 3 & 4 at £70.00per week.

1608. Where a claimant’s HB in the benefit week with respect of which the extended payment is to be calculated is reduced in accordance with a deduction for the benefit cap, the extended payment must be calculated using the amount of housing benefit before any such reduction is made.

1609-1609

Subsidy for extended payments

1610. Extended payments are treated as a separate HB category on which full subsidy will be paid. This means that, for example, if the rent allowance paid immediately before the extended payment period included amounts attracting lower rate subsidy, a similar subsidy reduction will not be made for rent allowance paid during the extended payment period.

1611-1619

Subsidy for overpayments of extended payments

1620. An overpayment of extended payments can occur when, for example:

• the authority incorrectly decides that an award is appropriate

• HB is not reassessed to reflect a change of circumstances, occurring before the extended payment period, until after the extended payment has been awarded. This could occur when a non-dependant moves into the household prior to the cessation of IS/JSA(IB)/ESA(IR)/IB/SDA/ESA(C)

1621. If an overpayment arises, the rate of benefit subsidy payable will be in accordance with normal rules, depending on the reason for the overpayment.

1622. An overpayment could also arise where the claimant moves home, during the extended payment period, to another authority’s area. The original LA is responsible for calculation and payment of the EP provided entitlement exists in the new LA.

1623-1629

Queries

1630. If you have any queries concerning the content of this section, contact LA-PED at lawelfare.lafunding@dwp.gov.uk

Section 13: Expenditure attracting full rate subsidy not separately identified elsewhere on the claim form

Introduction

1700. The subsidy claim form contains cells to record expenditure paid in the relevant year which attracts 100% subsidy and is included in the total expenditure cells but is not specified elsewhere on the claim form.

1701. These cells are 023, 061 (England and Wales only), and 110.

1702. The inclusion of expenditure in any of these cells should be because of a positive decision by LAs that the expenditure belongs in the cell and not as a means of ensuring in-year reconciliation.

1703. LAs should be able to demonstrate to their auditor why they have recorded expenditure in these cells.

1704. The following paragraphs indicate the expenditure DWP would expect to be recorded in these cells.

1705-1709

Cell 023 – England and Wales

1710. Examples of expenditure that may be recorded in cell 023 includes benefit paid in respect of caravan sites (owned by the LA), marina fees, other property excluded from the HRA, such as, social services accommodation, park keepers or recreational grounds accommodation.

1711. LAs should ensure they exclude the following from cell 023:

• expenditure subject to the threshold and cap arrangements

• extended payments, and

• overpayments

1712-1719

Cell 023 – Scotland

1720. Non HRA rent rebate expenditure is not recorded separately on the claim form for Scottish LAs. Therefore, in addition to the above, Scottish LAs should also record, in cell 023, rent rebates in respect of HRA properties that attract full subsidy.

1721-1729

Cell 061 – England and Wales only

1730. Included in cell 061 should be any other rent rebate expenditure for properties within the HRA which attracts full subsidy.

1731. The following should be excluded from cell 061:

• extended payments
• for Welsh authorities only, expenditure in respect of short-term leased accommodation, and
• overpayments

1732-1739

Cell 110

1740. Rent allowance expenditure is divided into many subcategories:

• regulated tenancies
• cases under the pre-1996 rules
• maximum rent cases
• registered social landlord cases, and
• local housing allowance cases

These subcategories and EPs are recorded elsewhere on the subsidy claim form and should be excluded from this cell.

1741. Other than any minor Rent Allowance payments which are highly unusual and fall outside the main policy parameters specified above, DWPs expectation is that all Rent Allowance payments will fall into one of the above subcategories. Any such minor Rent Allowance payments should be included in cell 110 but LAs must be able to demonstrate to their auditor and the department, as required, that any Rent Allowances included in cell 110 have been properly paid and are not appropriate to one of the above subcategories.

1742-1759

Queries

1760. If you have any queries concerning the content of this section, contact LA-PED at lawelfare.lapaymentsandsubsidy@dwp.gov.uk

1761-1799

Appendix A – Summary of financial year ending (FYE) March 2022 benefit subsidy arrangements

Basic rate of subsidy	Arrangements for FYE March 2021	Arrangements for FYE March 2022	Remarks
	All Housing Benefit 100%	All Housing Benefit 100%	No change

Other rates of subsidy	Arrangements for 2019 to 2020	Arrangements for 2020 to 2021	Remarks
1. Backdated awards	All Housing Benefit 100%	All Housing Benefit 100%	No change
2. Overpayments i) Eligible	All Housing Benefit 40%	All Housing Benefit 40%	No change
ii. LA error	All Housing Benefit 100% 40% or Nil	All Housing Benefit 100% 40% or Nil	No change
iii. Administrative delay	All Housing Benefit 100% 40% or Nil	All Housing Benefit 100% 40% or Nil	No change
iv) Technical	All Housing Benefit Nil	All Housing Benefit Nil	No change
vi) Indicative rent level	Rent allowance 100%	Rent allowance 100%	No change
vii) Recovered indicative rent level	Rent allowance Nil	Rent allowance Nil	No change
viii) Duplicate	Rent allowance 25%	Rent allowance 25%	No change
ix) Departmental error	All Housing Benefit 100%	All Housing Benefit 100%	No change
x) Recovered Departmental error	All Housing Benefit Nil	All Housing Benefit Nil	No change
3. Disproportionate increase in LA rents – HB attributable to increase in rents of HB Tenants which exceed those of non-HB tenants	Scotland Rent Rebate Nil Wales HRA rent rebate Nil	Scotland Rent Rebate Nil Wales HRA rent rebate Nil	No change
4. Unreasonable rents – deregulated private sector tenancies (cases not affected by the January 1996 changes only)	Rent Allowances Expenditure up to the level of the rent officer determination 100% Expenditure above the rent officer determination 60% or Nil	Rent Allowances Expenditure up to the level of the rent officer determination 100% Expenditure above the rent officer determination 60% or Nil	No change
5. Temporary accommodation: Board and Lodging, and accommodation	Expenditure up to and including the appropriate LHA based cap or absolute cap 100% Expenditure above the appropriate cap Nil	Expenditure up to and including the appropriate LHA based cap or absolute cap 100% Expenditure above the appropriate cap Nil	No change
6. Temporary Accommodation – Board and Lodging accommodation Modular Improvements Rule	HRA rent rebates in England and Wales Nil	HRA rent rebates in England and Wales Nil	No change
7. Temporary accommodation – Board and Lodging accommodation Extended payments	All HB	All HB	No change
8. Discretionary Local Schemes	0.2% addition to their annual benefit subsidy, capped at 75% of the total benefit cost of the local scheme to the LA	0.2% addition to their annual benefit subsidy, capped at 75% of the total benefit cost of the local scheme to the LA	No change

Appendix B – Effective dates of rent officers’ determination

Event		Effective date
1	New claim	The date entitlement starts or, when the 13 week rule applies, from the 14th benefit week of entitlement
2	Change of circumstances	Effective date of change
3	Final determination higher than IRL	The same as in 1 above
4	Final determination lower than IRL	The same as in 1 above
5	Redetermination lower than original determination	Date of redetermination or following Monday[footnote 1]
6	Redetermination higher than determination	Date of original determination, that is whichever original date is appropriate under 1 to 3 above

At the 52 week review

Event		Effective date
7	Determination is higher than existing determination	Rent paid weekly or in multiples of weeks: The first day of the benefit week in which the day following the last day of the 52 week exclusion period (starting from the date of the previous application to the rent officer) occurs. Rent paid other than weekly or in multiples of weeks: The day following the last day of the 52 week exclusion period.
8	Determination is lower than determination	The first day of the benefit week following existing the date the local authority receives the determination.

Appendix C – Subsidy arrangements for hostel accommodation

A definition of hostel is contained at regulation 2(1) of the Housing Benefit Regulations 2006.

Hostel Type	Subsidy Control
A. Hostel run by RSL RSL is landlord	Referral to the rent officer[footnote 2]
B. Local Authority Hostels:
i. including social services hostels where Social Services Department is part of the same LA as the Housing Department	Outside HRA: disproportionate rent increase (DRI) rule
ii. as i but RSL is managing agent (LA is landlord)	Outside HRA: DRI rule
iii. where Social Services Department is part of County Council	Mandatory referral to the rent officer
iv. as iii but RSL is managing agent	Mandatory referral to the rent officer
C. Health Authority Hostels	Mandatory referral to the rent officer
D. Resettlement Units	Mandatory referral to the rent officer
E. Private Sector Hostels
i. private landlord is landlord	Mandatory referral to the rent officer
ii. RSL is managing agent	Mandatory referral to the rent officer
F. Salvation Army Hostels	Mandatory referral to the rent officer (unless registered as RSL – then per [footnote 2]
G. YMCA Hostels	Mandatory referral to the rent officer (unless registered as RSL – then per [footnote 2]
H. Youth Hostels	Mandatory referral to the rent officer (unless registered as RSL – then per [footnote 2]

Appendix D – Administration Subsidy distribution for FYE March 2022

Local authority - England	Final FYE March 2022 DWP HB administration subsidy allocation (£)
Adur	143,098
Allerdale	266,840
Amber Valley	292,763
Arun	371,166
Ashfield	348,282
Ashford	306,333
Babergh	168,737
Barking and Dagenham	875,281
Barnet	1,357,429
Barnsley	805,110
Barrow-In-Furness	191,856
Basildon	538,874
Basingstoke and Deane	355,823
Bassetlaw	288,892
Bath and North East Somerset	390,988
Bedford	438,152
Bexley	610,109
Birmingham	4,801,257
Blaby	138,721
Blackburn with Darwen	486,293
Blackpool	736,159
Bolsover	219,979
Bolton	975,097
Boston	189,758
Bournemouth, Christchurch and Poole	1,095,779
Bracknell Forest	239,270
Bradford	1,593,296
Braintree	332,907
Breckland	297,045
Brent	1,585,314
Brentwood	119,871
Brighton and Hove	974,950
Bristol	1,471,878
Broadland	193,435
Bromley	767,724
Bromsgrove	149,996
Broxbourne	251,187
Broxtowe	221,844
Buckinghamshire	935,132
Burnley	343,035
Bury	512,020
Calderdale	637,530
Cambridge	295,542
Camden	1,264,016
Cannock Chase	244,215
Canterbury	367,838
Carlisle	278,986
Castle Point	161,472
Central Bedfordshire	502,103
Charnwood	305,767
Chelmsford	336,541
Cheltenham	255,242
Cherwell	291,406
Cheshire East	729,938
Cheshire West and Chester	841,567
Chesterfield	354,180
Chichester	257,176
Chorley	240,984
City of London	44,137
Colchester	433,484
Copeland	201,233
Cornwall	1,571,380
Cotswold	159,372
Coventry	1,031,877
Craven	91,825
Crawley	359,382
Croydon	1,476,522
Dacorum	383,243
Darlington	360,851
Dartford	234,781
Derby	773,771
Derbyshire Dales	121,860
Doncaster	976,577
Dorset	830,043
Dover	338,621
Dudley	900,423
Durham	1,898,629
Ealing	1,438,277
East Cambridgeshire	158,181
East Devon	279,885
East Hampshire	176,517
East Hertfordshire	262,528
East Lindsey	439,009
East Riding of Yorkshire	652,425
East Staffordshire	241,976
East Suffolk	620,637
Eastbourne	366,988
Eastleigh	235,910
Eden	85,356
Elmbridge	246,872
Enfield	1,600,955
Epping Forest	266,421
Epsom and Ewell	132,486
Erewash	284,640
Exeter	324,432
Fareham	155,112
Fenland	261,272
Folkestone and Hythe	330,370
Forest of Dean	190,628
Fylde	180,615
Gateshead	803,832
Gedling	236,749
Gloucester	354,397
Gosport	230,694
Gravesham	269,997
Great Yarmouth	386,309
Greenwich	1,340,173
Guildford	234,303
Hackney	1,996,556
Halton	494,612
Hambleton	167,912
Hammersmith and Fulham	953,313
Harborough	114,557
Haringey	1,406,837
Harlow	317,954
Harrogate	267,673
Harrow	728,522
Hart	109,043
Hartlepool	452,228
Hastings	411,383
Havant	249,108
Havering	620,094
Herefordshire	409,464
Hertsmere	262,457
High Peak	202,293
Hillingdon	863,868
Hinckley and Bosworth	184,763
Horsham	227,699
Hounslow	957,979
Huntingdonshire	303,926
Hyndburn	277,697
Ipswich	451,451
Isle of Wight	424,939
Isles of Scilly	1,687
Islington	1,433,119
Kensington and Chelsea	854,117
Kings Lynn and West Norfolk	351,041
Kingston upon Hull	1,230,958
Kingston upon Thames	407,104
Kirklees	1,196,356
Knowsley	684,643
Lambeth	1,760,014
Lancaster	377,197
Leeds	2,440,073
Leicester	1,151,580
Lewes	247,957
Lewisham	1,601,985
Lichfield	177,261
Lincoln	334,268
Liverpool	2,364,620
Luton	649,459
Maidstone	356,427
Maldon	113,897
Malvern Hills	157,474
Manchester	2,443,386
Mansfield	337,479
Medway	739,275
Melton	89,768
Mendip	255,561
Merton	547,485
Mid Devon	166,256
Mid Suffolk	157,323
Mid Sussex	224,130
Middlesbrough	671,105
Milton Keynes	782,924
Mole Valley	155,406
New Forest	331,744
Newark And Sherwood	266,390
Newcastle-under-Lyme	297,119
Newcastle upon Tyne	1,198,924
Newham	1,543,820
North Devon	238,542
North East Derbyshire	248,007
North East Lincolnshire	538,698
North Hertfordshire	273,907
North Kesteven	192,094
North Lincolnshire	437,082
North Norfolk	240,342
North Northamptonshire	795,357
North Somerset	512,590
North Tyneside	691,911
North Warwickshire	135,708
North West Leicestershire	184,150
Northumberland	901,835
Norwich	574,455
Nottingham	1,307,648
Nuneaton And Bedworth	352,980
Oadby and Wigston	85,603
Oldham	818,091
Oxford	397,420
Pendle	247,219
Peterborough	625,911
Plymouth	914,121
Portsmouth	831,664
Preston	445,539
Reading	511,327
Redbridge	834,904
Redcar and Cleveland	529,099
Redditch	228,457
Reigate And Banstead	272,079
Ribble Valley	71,321
Richmondshire	84,271
Richmond upon Thames	413,177
Rochdale	821,457
Rochford	131,027
Rossendale	183,971
Rother	219,883
Rotherham	856,636
Rugby	215,312
Runnymede	166,463
Rushcliffe	154,826
Rushmoor	264,573
Rutland	53,529
Ryedale	110,216
Salford	1,069,537
Sandwell	1,195,414
Scarborough	353,823
Sedgemoor	300,174
Sefton	916,423
Selby	151,468
Sevenoaks	223,824
Sheffield	1,858,571
Shropshire	639,812
Slough	473,580
Solihull	489,540
Somerset West and Taunton	397,524
South Cambridgeshire	228,256
South Derbyshire	170,419
South Gloucestershire	475,936
South Hams	181,892
South Holland	180,596
South Kesteven	290,760
South Lakeland	156,960
South Norfolk	237,831
South Oxfordshire	221,005
South Ribble	196,071
South Somerset	382,817
South Staffordshire	199,988
South Tyneside	719,399
Southampton	884,382
Southend on Sea	604,886
Southwark	1,661,404
Spelthorne	211,588
St Albans	247,461
St Helens	622,033
Stafford	238,594
Staffordshire Moorlands	143,940
Stevenage	267,872
Stockport	692,169
Stockton on Tees	633,612
Stoke on Trent	904,433
Stratford-on-Avon	236,334
Stroud	221,130
Sunderland	1,200,583
Surrey Heath	124,608
Sutton	555,026
Swale	408,996
Swindon	535,086
Tameside	822,753
Tamworth	194,659
Tandridge	160,788
Teignbridge	297,029
Telford and Wrekin	582,229
Tendring	475,018
Test Valley	226,718
Tewkesbury	169,290
Thanet	538,109
Three Rivers	179,355
Thurrock	452,100
Tonbridge and Malling	260,578
Torbay	500,984
Torridge	158,332
Tower Hamlets	1,807,051
Trafford	538,192
Tunbridge Wells	236,423
Uttlesford	127,974
Vale of White Horse	224,512
Wakefield	1,096,832
Walsall	997,558
Waltham Forest	999,820
Wandsworth	1,231,037
Warrington	493,478
Warwick	257,994
Watford	265,830
Waverley	211,582
Wealden	245,479
Welwyn Hatfield	318,009
West Berkshire	299,445
West Devon	111,166
West Lancashire	267,516
West Lindsey	228,302
West Northamptonshire	841,985
West Oxfordshire	184,987
West Suffolk	369,803
Westminster	1,239,900
Wigan	949,622
Wiltshire	971,743
Winchester	219,465
Windsor and Maidenhead	257,154
Wirral	1,156,232
Woking	194,453
Wokingham	183,972
Worcester	256,625
Worthing	270,306
Wychavon	252,767
Wyre	279,499
Wyre Forest	274,727
York	364,973
Total	164,141,807

Local authority - Scotland	Final FYE March 2022 DWP HB administration subsidy allocation (£)
Aberdeen	625,477
Aberdeenshire	445,161
Angus	338,885
Argyll and Bute	245,316
Clackmannanshire	206,188
Comhairle nan Eilean Siar	53,864
Dumfries and Galloway	493,007
Dundee	716,812
East Ayrshire	486,739
East Dunbartonshire	184,061
East Lothian	292,942
East Renfrewshire	153,415
Edinburgh	1,420,648
Falkirk	510,779
Fife	1,236,550
Glasgow	3,449,849
Highland	605,821
Inverclyde	360,125
Midlothian	266,258
Moray	222,743
North Ayrshire	622,030
North Lanarkshire	1,302,525
Orkney	42,656
Perth and Kinross	338,004
Renfrewshire	659,273
Scottish Borders	328,342
Shetland	40,987
South Ayrshire	395,188
South Lanarkshire	1,044,306
Stirling	223,070
West Dunbartonshire	467,631
West Lothian	610,360
Total	18,389,015

Local authority - Wales	Final FYE March 2022 DWP HB administration subsidy allocation (£)
Blaenau Gwent	293,463
Bridgend	450,723
Caerphilly	605,746
Cardiff	1,205,672
Carmarthenshire	518,694
Ceredigion	176,301
Conwy	352,174
Denbighshire	325,675
Flintshire	383,512
Gwynedd	312,199
Isle of Anglesey	196,598
Merthyr Tydfil	218,585
Monmouthshire	197,735
Neath Port Talbot	552,181
Newport	546,561
Pembrokeshire	363,741
Powys	303,778
Rhondda Cynon Taf	775,996
Swansea	853,134
Torfaen	357,394
Vale of Glamorgan	346,731
Wrexham	433,693
Total	9,770,290

Appendix E - Additional Admin Subsidy for FYE March 2021

Appendix E has been removed from this Amendment 16 version of the Subsidy Guidance Manual as this additional subsidy was a one-off funding payment to reflect additional work LAs undertook in maintaining their HB services during the COVID-19 pandemic in FYE March 2021.

Appendix F – Amounts for rent rebate subsidy deduction calculation for LAs in Wales for FYE March 2022

Local authority	Specified amount ‘O’	Guideline rent increase ‘P’
Caerphilly	100.15	1.27
Cardiff	112.24	2.00
Carmarthenshire	99.65	0.95
Denbighshire	97.49	3.39
Flintshire	101.07	3.45
Isle of Anglesey	96.68	3.42
Pembrokeshire	100.32	3.28
Powys	101.57	2.62
Swansea	98.73	2.89
Vale of Glamorgan	108.57	3.52
Wrexham	99.91	3.42

Appendix G – Subsidy arrangements for temporary accommodation

Calculating subsidy

1. The weekly amount of subsidy payable in cases subject to Articles 17 – 17C is the lowest of the:

• weekly HB entitlement (the amount paid to the customer for the week or part week, as the case may be)

• maximum weekly subsidy amount (described below), or

• upper cap limit £375 or £500 (also detailed below)

2. A maximum weekly subsidy cap of £500 is applicable in respect of customers placed into temporary accommodation located in the following BRMAs, in London

• Central London
• Inner West
• Inner North
• Inner South West
• Inner East
• Inner South East
• Outer South West

3. A maximum weekly subsidy cap of £375 is applicable for customers placed into temporary accommodation located in:

• all remaining BRMAs in London (not listed above), and
• all other BRMAs outside of London

Notes for all cases:

• by landlord we mean the claimant’s immediate landlord, i.e., the person to whom the claimant is ultimately liable to pay their rent.
• from April 2011, the subsidy scheme only applies to ‘homelessness accommodation’. This is accommodation made available to discharge any of the LAs statutory homelessness functions, or to prevent homelessness.
• the legislation now refers to all ‘licensed’ accommodation cases as, ‘accommodation which the authority has a right to use under an agreement, other than a lease, with a third party’.
• all cases where the person’s appropriate home is in supported housing that is ‘exempt accommodation’, will continue to be excluded from this scheme.

Cases subject to Articles 17 to 17C

Item no.	Accommodation	Landlord	Treatment under HB	Maximum weekly subsidy amount	Cell no. on subsidy claim form
1	Great Britain Homelessness accommodation (excluding prevention cases): - Board and lodging (B&B)	LA or RSL	Non HRA rent rebate or Rent Allowance	One bedroom LHA rate	012 and 013 – LA landlord or 104 and 105 - RSL
2	Great Britain Homelessness accommodation: - Non self-contained - Held on licence	LA or RSL	Non HRA rent rebate or Rent Allowance	One bedroom LHA rate	012 and 013 - LA landlord or 104 and 105 - RSL
3	Great Britain Homelessness accommodation: - Non self-contained - Leased to the LA for up to 10 years (Including hostels on a lease) - Period up to 10 years - Outside HRA in England - In or outside HRA in Wales and Scotland	LA	Non HRA rent rebate in England Non HRA or HRA rent rebate in Wales or Scotland	90% one bedroom LHA rate	014 and 015 (non HRA in Wales and HRA in Scotland. 056 and 057 (HRA Wales)
4	Wales or Scotland only Homelessness accommodation: - Non self-contained - Leased to the LA (Including hostels on a lease) - In or outside HRA	LA	Non HRA or HRA rent rebate in Wales and Scotland	90% one bedroom LHA rate	014 and 015 (non HRA in Wales and Scotland and HRA in Scotland) 056 and 057 (HRA Wales)
5	Great Britain Homelessness accommodation: - Non self-contained - Leased to or owned by RSL (Including hostels) - Any period	RSL	Rent Allowance	90% one bedroom LHA rate	106 and 107
6	Great Britain Homelessness accommodation: - Self contained - Held on licence by LA or RSL	LA or RSL	Non HRA rent rebate or Rent Allowance	90% of appropriate LHA rate	014 and 015 - LA or 106 and 107 - RSL
7	England Homelessness accommodation: - Self-contained - Leased to the LA for up to 10 years - Outside HRA	LA	Non HRA rent rebate in England	90% of appropriate LHA rate	014 and 015
8	Wales and Scotland Homelessness accommodation: - Self-contained - Leased to the LA - Any period - In or outside HRA	LA	Non HRA or HRA rent rebate in Wales and Scotland	90% of appropriate LHA rate	014 and 015 (non HRA in Wales and Scotland and HRA in Scotland. 056 and 057 in Wales
9	Great Britain Homelessness accommodation: - Self contained - Leased to RSL - Owned by RSL[footnote 3] - Any period	RSL	Rent Allowance	90% of appropriate LHA rate	106 and 107
10	Great Britain Homelessness accommodation: - Leased to or owned by RSL - Sub-leased to the LA Treat as 3, 4, 7 or 8 - LA-leased	LA	Non HRA rent rebate in England, Non HRA or HRA rent rebate in Wales and Scotland	90% of appropriate LHA rate (use one bed rate if non self-contained)	014 and 015 (non HRA in England, Wales and Scotland, HRA in Scotland) 056 and 057 (HRA in Wales)

Cases which are not subject to Articles 17 to 17C

Item No.	Accommodation	Landlord	Treatment under HB	Maximum weekly subsidy amount	Cell no. on subsidy claim form
11	Great Britain Hostels: - Owned by LA - Outside HRA in England - In or outside HRA in Wales and Scotland	LA	HRA and/or Non HRA rent rebate	100% subsidy up to level of rent	023 (non HRA in England and Wales and HRA in Scotland) or 060 (HRA in Wales)
12	Great Britain Exempt accommodation	Housing Association, Non metropolitan county council in England etc	Rent Allowance	TA subsidy rules do not apply Treated separately for subsidy purposes	096, 097 and 098

Referring rents to a Rent Officer

4. As this scheme relates only to HB subsidy, there remains some flexibility in these cases as to the level of rent that will be met by HB, i.e., the eligible rent. It is also a reason for having cells in the Subsidy Claim Form that record ‘expenditure above the cap’. The existing HB regulations when the landlord is a registered housing association remain unchanged. These cases continue to be treated as ‘excluded’ rent allowance cases for HB purposes (see below). However, the Department did provide guidance in May 2010, HB/CTB Circular S4/2010, advising LAs to use the maximum subsidy amounts in this scheme as a benchmark for considering whether the rent is unreasonably high. That guidance is essentially repeated here, for ease of reference.

5. Under Schedule 2 paragraph 3 of the HB Regulations 2006, the relevant LA is not required to apply to a Rent Officer for a determination in relation to a registered housing association tenancy except in a situation where the LA considers that the

• claimant occupies a dwelling larger than is reasonably required by the claimant and any others who occupy that dwelling (including any non-dependants of the claimant and any person paying rent to the claimant), or

• rent payable for that dwelling is unreasonably high

See The Housing Benefit Regulations 2006 (SI 2006/213)

6. This means that a tenancy with a registered housing association as the landlord is ‘excluded’ from mainstream LHA rules or, as was the case pre-LHA, mandatory Rent Officer referral. It also means that the rent does not have to be referred simply because it is high, or higher than for similar properties. It must be unreasonably high before a referral needs to be made.

7. A referral is also required if the authority considers that the accommodation is larger than is reasonably required by the claimant and any others who may occupy the dwelling. In such circumstances the authority should have regard to the circumstances and housing options available to the individual household.

8. In relation to a profit-making registered provider of social housing, the above provision exempting tenancies from Rent Officer referral only applies to the provider’s social housing. All other housing would be subject to the local housing allowance.

What is reasonable

9. As every authority is given discretion under the regulations, you should not have a blanket policy of either referral or non-referral of registered housing association cases. However, uniform procedures for assessment of each case should be put in place for staff to follow, backed up by training and written guidance to achieve consistency and fairness.

10. DWP believes that the formulae for calculating maximum subsidy in cases subject to this scheme, along with the upper cap limits, provides sufficient resources to meet the reasonable costs of the leasing obligations to the landlord.

11. The LA should make an informed decision about whether the rent is appropriate given the circumstances of a particular case. It may be reasonable to agree a rent that is higher than will be recouped through subsidy. Conversely, when the actual costs of leasing and managing property are lower than the maximum subsidy amount, it would be reasonable to expect the rent level to reflect this lower amount.

Treatment of HB following referral to a Rent Officer

12. If a tenancy of a registered housing association is referred to the Rent Officer because the accommodation is too large or the rent unreasonably high, then the maximum rent rules apply to the determination of the eligible rent. HB is then payable up to the eligible rent.

13. For HB subsidy purposes, the amount payable in these cases continues to be the lowest of the:

• weekly HB entitlement (the amount paid to the customer for the week or part week, as the case may be)

• maximum weekly subsidy amount, or

• upper cap limit of £375 or £500

The following examples use specific locations for illustrative purposes only:

Subsidy Treatment - Example 1 - Rent Officer referral for HAL tenancy (Central London)

6 room property (4 bedrooms). Central London BRMA.

Leased by registered housing association as part of HAL scheme.

Rent is set at £1000 per week.

The LA decides to refer rent to the Rent Officer.

Rent Officer Determination for the property is £700.

Maximum rent is therefore £700.

• Weekly HB entitlement (claimant on full HB) = £700

• Maximum weekly subsidy amount is 4 bed LHA (£1,150) – 10% (£115) = £1,035

• Upper cap limit = £500

Subsidy payable is the lowest of the three = £500 (Expenditure above the cap = £200)

Subsidy Treatment - Example 2 - Rent Officer referral for HAL tenancy (Aberdeen City).

4 room property (3 bedrooms). Aberdeen and Shire BRMA

Leased by registered housing association as part of HAL scheme.

Rent is set at £200 per week.

The LA decides to refer rent to the Rent Officer.

Rent Officer Determination for the property is £160.

Maximum rent is therefore £160.

• Weekly HB entitlement (claimant on full HB) = £160

• Maximum weekly subsidy amount is 3 bed LHA (£173.08) – 10% (£17.31) = £155.77

• Upper cap limit = £375

Subsidy payable is lowest of the three = £155.77. (Expenditure is above the 2011 LHA level.)

Key definitions

Registered Housing Association

14. The definition of a registered housing association has been updated. The term ‘registered housing association’ has the same meaning as in regulation 2(1) of the Housing Benefit Regulations 2006. ‘Registered housing association’ means a

• private registered provider of social housing, as defined by the Housing and Regeneration Act 2008. These bodies (formerly known as Registered Social Landlords (RSLs)) are registered with the Tenant Services Authority, the regulator of social housing in England

• housing association which is registered in a register maintained by Welsh Ministers under Chapter 1 of Part 1 of the Housing Act 1996, or

• housing association which is registered by Scottish Ministers by virtue of section 57(3)(b) of the Housing (Scotland) Act 2001

15. In England, instead of having Registered Social Landlords (RSLs) there are now two types of Private Registered Providers (PRPs) of social housing: those that are non-profitmaking (effectively the same as previous RSLs); and those that are profit-making (this could be, for example, a private rented sector landlord that has some social housing stock and is registered with the regulator).

16. For ease, registered housing associations have also been referred to as RSLs in some sections of this guidance.

Exempt accommodation

17. Exempt accommodation cases dealt with under the pre-1996 rules (including those placed under homelessness legislation) are described as those where the accommodation is provided by a:

• housing association

• registered charity

• voluntary organisation, or

• non-metropolitan county council in England,

that is also:

• the landlord, and

• they, or someone on their behalf, provides care, support, or supervision, to meet their tenant’s needs

18. These homes are exempt from both the maximum rent and LHA methods of working out the eligible rent. These rent allowance cases rely on the pre-1996 system of rent restriction and its allied subsidy rules.

Board and lodging accommodation

19. ‘Board and lodging accommodation’ means:

(a) accommodation provided for a charge which is inclusive of the provision of that accommodation and at least some cooked or prepared meals which are both cooked or prepared and consumed in that accommodation or associated premises, or

(b) accommodation provided in a hotel, guest house, lodging house or some similar establishment

but it does not include accommodation in a residential care home or nursing home within the meaning of regulation 19(3) of the Income Support (General) Regulations 1987 nor in a hostel within the meaning of Regulation 14 of the Housing Benefit Regulations or, as the case may be, Regulation 14 of the Housing Benefit (State Pension Credit) Regulations.

Self-contained accommodation

20. Accommodation is self-contained if the claimant’s household is not required to share one or more of the following with another household:

• kitchen

• bathroom, or

• toilet

Licensed accommodation

21. Generally, accommodation will be held on license (rather than a lease) in circumstances where the local housing authority has occupation rights in respect of homeless persons but does not have the right to exclusive occupation for a defined term on payment of rent. This is likely to be accommodation which the authority has agreement to use on a nightly, weekly, or monthly basis to accommodate potentially homeless people.

22. From April 2011, for Housing Benefit subsidy purposes, ‘licensed’ accommodation is referred to in the legislation as: ‘accommodation which the authority has a right to use under an agreement, other than a lease, with a third party’.

1. In the case of items 4 and 5, when a payment for the week of the final determination or redetermination has already been made when the rent officer’s decision is received, Local Authorities (LAs) may use, as the effective date for subsidy purposes, the:

   • date of the determination, or
   • following Monday

   ↩

2. Referral must be made if the authority considers (one of the following):

   • accommodation is over-large for the claimant’s reasonable housing needs, or
   • rent for the accommodation is unreasonably high

   ↩ ↩² ↩³ ↩⁴

3. Applies only to accommodation acquired by an RSL, the purpose of which is to be used as homelessness accommodation. ↩