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Article: Housing
Benefit
If the tenant has a low wage or is claiming
benefits he or she can get help from the Council will all or part of
the rent under the Housing Benefit Scheme. It is useful for you to
check with the tenant to see if he or she is entitled to claim.
There are three things you need to clarify -
*
will the Housing Benefit meet the rent charged
*
how long will it be before the first payment is made
*
can Housing Benefit be paid directly to you as landlord and
landlady
How
much rent will Housing Benefit cover
The rules on how much Housing Benefit will pay
are extremely complicated.
Once a tenant has made a Housing Benefit claim,
the property will be inspected by an independent Rent Officer
Service. The service will tell the Council whether the rent charged
is an appropriate market rent for the property.
Factors Affecting Potential Housing Benefit Claimants
Size Criteria
A person in receipt of housing benefit may live
in any size dwelling he/she chooses. However, there is a limit to
the number of rooms that the Rent Officer must take into account
when determining rents for housing benefit subsidy purposes.
A couple is entitled to one bedroom
Two children of the same sex, under the age of
16, are entitled to one bedroom.
Two children of either sex, under the age of 10
years are entitled to one bedroom.
If the Rent Officer decides that the premises
are larger than the size criteria allowed, he will assess a notional
rent. It is possible for the Rent Officer to determine that a
dwelling exceed the size criteria but not to assess a notional rent.
This would be because the contractual rent is low, and would be
acceptable for the appropriate size notional accommodation.
Exceptionally High Rent
A level of rent which the Rent Officer decides
is appropriate for a property where both the asking rent and the
lowest of his other determinations is exceptionally high.
The exceptionally high test is made by
comparing with premises in a wide locality with the same number of
rooms as the referred dwelling, or with the number permitted by the
size criteria.
Local Reference Rent (LRR)
The local reference rent represents the general
level of rents in a broad locality for dwellings with the same
number of rooms. It is not
based on property type but on number of rooms (bedrooms and rooms
suitable for living). The Rent Officer will indicate the local
reference rent to the local authority when it is lower than any of
his determinations
Single Room Rent (SRR)
The maximum rent used in the calculation of
housing benefit for single young individuals under the age of 25
years with no children is the Single Room Rent. Single Room Rents
are based on a similar formula to Local Reference Rents, but relate
to a single room without use of any additional shared rooms, and
assuming that the toilet AND kitchen facilities (if any) are shared.
A Single Room Rent is only notified to the local authority if it is
lower than any of the determinations (other than LRR) made by the
Rent Officer
The amount of the SRR will vary month to month
as market rents change in the area.
You should contact the local Rent Office to
find out the current SRR at the time of enquiry
Pre-Tenancy Determinations (PTD)
A Determination made by the Rent Officer prior
to a proposed tenancy being taken up or renewed. The application
must be directed via the local authority and the Rent Officer will
issue the decision within 5 day of its receipt. A PTD application
should only be made where there is a clear intention to create
rental liability in the future.
Unfortunately neither the Housing Benefit
Office nor the Rent Officer can indicate how much Housing Benefit
will be actually be allowed on the property UNTIL the tenant has
moved in and made a claim. However, this process gives some guidance
on the sort of maximum levels that would be paid.. This does not
imply that the Housing Benefit will pay at this level.
Claim Related Rent
From 3rd April 2000 a new
Claim-Related Rent determination replaces the decisions the Rent
Officer sends to local authorities. The Rent Officer will still
carry out all usual determinations but the lowest valuation will
become the Claim-Related Rent. The Claim-Related Rent will be the
net of all ineligible
Service charges except meals and it will not
include water or sewage charges. The Rent Officer will notify the
local authority of the total valuation of all ineligible services,
water and sewage charges, which will be excluded from the
Claim-Related Rent.
Claw Backs
If the Council has paid Housing Benefit to a
tenant that he or she is not entitled to. Then they will stop the
benefit until the overpayment has been "Clawed Back".
Similarly, if the Council has paid Housing Benefit direct to the
landlord or agent, that the tenant is not entitled, any overpayment
will have to be paid back to the Council and then, of course, this
amount would have to be recovered from the tenant.
A tenant who is on a low income may not be able
to afford this. Hence the caution over Housing Benefit claims.
If you are a landlord of a number of
properties, and are being paid housing benefit on some or all of
them (including houses in flats). The council can claw back the rent
from any of the payments you receive.
A word
of warning – make sure that you have a suitable clause in your
letting terms and conditions to cover claw backs
A suggested clause would be:
Should
a tenant be or become eligible for Housing Benefit, and that benefit
is paid directly to the
Landlord
or Landlord's Agent, it is hereby agreed that the Landlord
indemnifies the Agent against any
"claw
back" made by the local authority's Housing Benefit Department.
Claims
It can take several weeks before the first
payment of Housing Benefit is made. Some councils time delay can be
anything up to 12 weeks!. It is therefore advisable to obtain at
least some monies from the tenant until the Benefit is paid. This
will help keep any shortfall to a minimum.
Tenants that move from one property to another
will have to make a fresh Housing Benefit claim, and therefore may
not be entitled to the same level of Benefit claimed previously.
This even includes moving from one bedsit to another in the same
house!
Remember the tenant is responsible at all times
for the payment of rent. The council may assist the tenant to pay
the rent through the Housing Benefit Scheme, but the Council is not
itself responsible to you.
Conclusion
This article attempts
to summarise these specific areas of property
management. They do not set out to provide definitive
answers or requirements to any one situation. It is
strongly recommended that you seek local information
regarding Housing Benefit.
Robert J. Lewis FNAEA
MICHAEL G. LEWIS & SON
Property Managers & Letting Agents
54 Mansel Street
Swansea SA1 5TE
Tel: +44 (0)1792 651166
Email mglas@globalnet.co.uk
Website www.mglewisandson.co.uk
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LandlordZONE® 2006 all
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