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HMRC internal manual

National Minimum Wage Manual

Accommodation and accommodation offset: accommodation and accommodation offset: special provisions for Councils and Social Housing Providers

Relevant legislation

The legislation that applies to this page is as follows:

* National Minimum Wage Regulations 2015, regulation 14(2)(b)

In Spring 2007 the Department for Business Enterprise and Regulatory Reform (now Department for Business, Innovation & Skills) published a policy intention that the accommodation offset (NMWM10020) would not apply when council workers live in council owned accommodation for reasons which are not connected to their employment. In addition deductions and payments for accommodation in these circumstances do not affect national minimum wage pay. These special provisions were also applied to other employers who are registered as providers of social housing. This policy intention became law for pay reference periods starting on or after 1 October 2007.

This means that Councils and registered Social Housing Providers (such as Registered Housing Associations) should not be regarded as providing accommodation to their workers unless the provision of the accommodation and the worker’s employment are dependent on each other.

For example:

  • if a Council warden must live in an employer owned flat under their contract of employment to carry out their job, the Council would be regarded as providing the accommodation and the accommodation offset would apply provided the accommodation could be regarded as living accommodation (NMWM10100); but
  • if a Council wages clerk just happens to live in a council flat and his occupation of that accommodation has no connection to his job, then the Council would not be regarded as providing the accommodation, the accommodation offset would not apply and any charge for rent (either as a deduction or a payment) would not reduce national minimum wage pay.

In addition, deductions from council workers’ pay for council tax will not reduce national minimum wage pay. This applies whenever a council deducts council tax from their workers, regardless of whether or not the accommodation offset applies.

This policy only applies when Compliance Officers are determining national minimum wage pay. It does not prevent workers taking their own claim to a Tribunal or civil court if they think they have been paid below national minimum wage rates.