Housing Benefit Will you be affected by the cuts?

Over 1 million people who rent privately get housing benefit. The rules changed in April 2011 and many claimants will begin to feel the effects from January 2012.

The average person is predicted to be over �600 a year worse off after the changes. It's important you're ready and act know how it will affect you. Read the guide for how to cope with the changes.

First things first:
If you rent from the council or housing association
these changes DO NOT affect you.

For everyone else the changes could be huge

Someone living in a five bedroom house in West London used to get about �950 per week on the old system, since the changes that's reduced to just �400. That's a massive drop of �28,600 a year.

Though the difference for a three bedroom house in Tyneside is much less, with a reduction from �125 to �115 per week. That adds up to over �500 a year.

To find out how you're affected, read on.

What is housing benefit?

Housing benefit is help from the Government for those with low earnings who struggle to pay their rent. You may be able to get this help with your rent if your income, savings and investments are below a certain level. You might also qualify if you are out of work and claiming a means tested (income based) benefit.

You usually CAN'T apply if:

• you have savings over �16,000, unless you are getting the 'guarantee credit' of pension credit.
• you live in the home of a close relative.
• you're a full-time student (unless you're disabled or have children).
• you're an asylum seeker or are sponsored to be in the UK.

Or if...

• you live with a partner or civil partner only one of you can get housing benefit.
• you're single and aged under 35 you can only get housing benefit for a bedsit or one room in shared accommodation. This changed from 25 on 1 Jan 2012, see below...

See what other benefits you could be entitled to in the full Benefits Check Up guide.

Need to check entitlement?

To see if your income is low enough to qualify for housing benefit try the MSE Benefits Checker.

Big housing benefit changes

The Government announced a number of changes to the amount of Housing Benefit people can receive, which will affect most claimants.

WHEN DO CHANGEs happen (see more below)?:
For new claims - straight away
For existing claims, 9 mths after anniversary - so started to hit from 1 Jan 2012

• Single and under 35? You'll only get bedsit or shared accommodation
  
  Since 1 Jan 2012, single new claimants aged under 35 only get housing benefit for a bedsit or one room in shared accomodation - this used to only apply to under 25s. Existing claimants will be affected by this change nine months after the anniversary of your claim.
  
  There are some people who won't be affected by these changes, including ex-offenders who may be of risk to others if they were to share accommodation and homeless people who've spent three months or more in a homeless hostel.
• Removal of five bedroom housing benefit rate
  
  Since April 2011 the maximum number of bedrooms per house allowed was reduced from five to four.
• Introduction of caps on the weekly amount that can be paid out
  
  Before April 2011 the amount that could be paid out was uncapped, it was based on the middle rental value of properties in the area (see below), so in certain places, particularly London, people were getting high payments. They have now been capped to control this.
  
• The rates will be set at the 30th percentile of rents in area
  
  The rate at which payments were set used to be based on the median value of properties in the area. The best way to explain this is imagine a line of renters in order of how much they pay. The median is the middle person, so 50% of people pay more rent and 50% pay less.
  
  Since April 2011 the rates are set so 30% of rental properties in the area are less expensive and 70% more (i.e. the rates are lower).
  
• Removal of �15 per week excess benefit
  
  On the old system if a claimant's rent was lower than the housing benefit rate, they could keep any extra up to a maximum of �15 per week. Since April 2011 this has been removed for everyone.
  
• Additional bedroom space for disabled claimants
  
  Since April 2011 claimants or their partners who meet the criteria who are disabled (with a long term health condition) who need overnight care provided by a non-resident carer will get additional bedroom space for the carer.
  
  Inform your local authority that you have an overnight carer so that they can look at your housing benefit claim again and you must have an extra bedroom in your home available for the carer to use before you get this help.

See below for full details of the changes

When these changes will affect you

Whether or not you're affected depends on when you first made a claim and if your circumstances have changed.

Click the option below that relates to you to see what you can do.

For more information on help that could be available to you see the Benefits Check Up and Tax Credits guides.

To get help from other MoneySavers, or discuss the changes, go to the Benefits & Tax Credits forum board.

How to cope with the changes

For most the changes are unavoidable, however there are still ways in which you can protect and prepare yourself for the changes.

• If you make a change now you'll automatically go on the new system
  
  If your situation changes your housing benefit will automatically be calculated using the new rules.
  
• Managing the change in payment
  
  Firstly read through the changes that are going to happen and see if they will make a difference to how much you're going to get. Then:
  • Budget NOW to prepare for the changes. To help ease you into the payment changes find out exactly how it will affect your finances and try to cut back now to see whether the drop in benefits is manageable (see the Stop Spending Guide). It may mean you'll need to pay some or more of the rent yourself. If you really can't manage, then unfortunately you may need to move house.
  • Ask your local authority. Your local authority may be able to help some people with discretionary housing payment to meet the gap between your benefit payment and the rent you pay. Though it's not available for many and the money for these payments is limited so your authority will have to consider your circumstances carefully.
    
    To apply for the discretionary housing payment you will have to fill in a claim form which you can get by phoning or going into your local council office.
  See below for information on what to do if you're unable to make your rent payments.

What if I can't pay my rent?

Don't hide away, there are several measures you can take:

• Talk to your landlord
  
  Try asking your landlord to reduce your rent, in most cases it's unlikely to work. Although if you've been a good tenant you may be able to negotiate with them.
• Have a benefits check up
  
  You could be eligible for help from the Government, find out what you might be due in the Benefits Check Up and Tax Credits guides.
  
• Manage your spending
  
  Try to manage your spending by cutting out unnecessary purchasing and creating a budget. See the Stop Spending guide and the Budget Planner for ways to help.
  
• Seek professional advice
  
  If you're unable to pay your rent, you could end up with arrears. This is incredibly serious, because unlike some other debts it could mean you get evicted.
  
  If you're in this position the housing advice helpline by Shelter (Tel 0808 800 4444) can help or see alternative free advice providers, such as Citizens Advice, in the Debt Problems guide.

Find your new rate (and check towns nearby)

For more details of the housing benefit rate changes in your area you can check one of the following websites. These could be particularly useful if you need to compare one area to another when choosing where to live:

This information will give you an idea of the amount of rent that might be met by housing benefit. The figures are estimates and will be updated regularly. Rent levels and rates may change.