DWP Central Freedom of Information Team

e-mail: [DWP request email]

Our Ref: VTR93

24 February 2009

Dear Watts,

Freedom of Information Request - VTR 93

I am writing in response to your request for information about Housing Benefit which you requested on 20^th January 2009.

In that request you asked:

If my only pension upon retirement is a state pension and I DO NOT OWN my own home will I be entitled to Housing Benefit to meet the rent payments and Council Tax Benefits to meet the Council Tax Demands.

I realise I am asking you to make a statement about an unknown date in the future so please base your response on the present entitlements for pensioners to benefits and normal state pensions contracted in.

Applicable amounts & tapers

Housing Benefit (HB) and Council Tax Benefit (CTB) are income-related benefits intended to assist people who need help to pay their rent and council tax. Entitlement is assessed by comparing a person's net income with an amount, known as an applicable amount, which is intended to cover day-to-day living expenses, taking account of the size and make-up of the household. The applicable amount is made up of personal allowances, paid according to age and family status, and flat-rate premiums for groups recognised as having special needs, such as disabled people, families and the elderly.

If the person's income is below or equal to the applicable amount, they will normally receive the maximum available help with their rent and council tax. This will be subject to any deductions which have to be made in respect of ineligible service charges or non-dependants in the household or restrictions owing to his property being considered too large or too expensive. If their income is above the applicable amount, benefit is reduced by fixed tapers of 65 pence for HB and 20 pence for CTB for each pound that their income exceeds that level.

HB and CTB are aligned with Income Support (IS) and income-based Jobseeker's Allowance (JSA(IB)) to help to ensure that people on similar levels of net income are treated the same. At the same time, the tapers mean that people with income above the level of IS or JSA(IB) should be better off because only a percentage of their excess income is taken into account. People are better off under tapered benefit arrangements than under schemes which operate a cliff-edge cessation of benefit. Such schemes remove all entitlement to benefit when income exceeds a certain level. The tapers in the HB and CTB schemes ensure that, although any increase in net income normally reduces the amount of benefit payable, the claimant should always see some increase in their overall financial position.

Capital

The income-related benefits have lower capital limits above which benefits are reduced and upper limits above which benefits cannot be paid. By “capital” we mean savings and capital assets in whatever form, for example money held in a bank or building society account, Premium Bonds, National Savings Certificates, stocks and shares and property. The value of most forms of capital is counted for benefits purposes; however some forms of capital are disregarded.

For HB and CTB, the lower capital limit is £6,000 (or £10,000 for people permanently living in residential care and nursing homes). The upper limit is £16,000. Capital of between £6,000 and £16,000 will affect entitlement because for every £250 or part of £250 held over £6,000 the council will make a deduction from benefit (known as “tariff income”) of £1 per week when calculating entitlement. For people who have reached the qualifying age for State Pension Credit, the Council takes into account £1 per week for each £500 or part £500 held over £6,000. The amount of any deduction is reduced by the income taper that applies in HB and CTB. Different rules apply for certain people who live permanently in residential care accommodation.

The Government acknowledges that people on low and moderate incomes may be concerned that any saving may affect their entitlement to benefits. With this in mind the treatment of capital in income-related benefits will be kept under review so that it strikes a sensible balance between providing targeted state support and not unfairly penalising those who have acted responsibly by saving.

Local Housing Allowance entitlement

April 2008 saw the national rollout of the Local Housing Allowance (LHA). This applies to customers in the deregulated private rented sector who make a new claim for Housing Benefit or to existing customers who move address.

LHA is a new way of calculating the rent element of Housing Benefit based on the area in which a customer lives and household size.

LHA is paid to the tenant rather than the landlord in most circumstances. Tenants are able to keep any excess benefit up to a maximum of £15 per week that is over and above the cost of their rent. If their rent is higher than their LHA entitlement they must make up the difference from other sources of income.

LHA was introduced in nine pathfinder authorities in 2003/04 and was subject to extensive and independent evaluation. A further nine authorities implemented the scheme in 2005 to test operational readiness of the scheme.

Unfortunately, it is not possible for me to confirm your likely LHA entitlement on the basis of the information you have supplied. These decisions are made by local authorities and neither Ministers nor officials of this Department can comment on, or intervene in, individual cases due to the independent nature of the decision-making process.

I would therefore suggest that you contact the staff of your local authority benefits office who will be pleased to assist you.

Information about LHA rates for properties of various sizes in your area is available on The Rent Service website at https://lha-direct.therentservice.gov.uk/Secure/Default.aspx

If you are not satisfied with my handling of your request please tell me why within two calendar months of the date of this letter. I will then arrange for someone to conduct an internal review of your request and my handling. The review will be conducted by another officer, usually of a more senior grade to myself. This person will have taken no part in my original decision. You will be advised of their decision in writing.

If you are still not content with the outcome of the internal review you have the right to apply directly to the Information Commissioner to look into the way your request has been handled. Please note that generally the Commissioner cannot make a decision unless you have first exhausted DWP's own complaints procedure. The Commissioner can be contacted at:

FoI Complaints Resolution

Information Commissioner's Office

Wycliffe House

Water Lane

Wilmslow

Cheshire

SK9 5AF
Fax: 01625 545 510
email:[email address]

Yours sincerely

DWP Central FoI Team