What is considered when calculating benefits

Capital is anything that has a monetary value, such as land and property, investments, and savings. You need to let us know if you, or your partner, have a change in the amount of savings or capital you have.

How we treat capital

• If you or your partner are under state pension age the first £6,000 of your savings is disregarded, a notional income of £1 a week for every £250 or part thereof you have in capital is included in your income.
• If you or your partner are over state pension age the first £10,000 of your savings is disregarded, a notional income of £1 for every £500 or part thereof you have is included in your income.
• Regardless of your age, if your (and your partners) combined capital exceeds £16,000 you do not qualify, (unless you get Guaranteed Pension Credit).

The following are some of the most common items counted as capital

• Cash
• Individual Savings Accounts (ISAs)
• Land
• Lump sums such as redundancy payments, insurance payments and back payments of social security benefits
• Premium Bonds and Income Bonds
• Properties you or your partner own or jointly own
• Money held or jointly held in banks, building societies and the Post Office
• Money held or jointly held in any current accounts or pre-paid cards
• Money held in trust
• Money you have borrowed
• Stocks, shares, unit trust holdings, government securities and bonds
• Tax Exempt Special Savings Accounts (TESSAs)
• Tax refunds
• Tessa only ISAs (TOISAs)
• National Savings Certificate

Please note this is not a full list. Other forms of investments, properties, savings, or anything that has monetary value could be counted as capital. Please contact us if you need more information.

 

A non-dependant is someone who lives with you and is aged 18 years and above.

It does not include someone who lives with you, who has a legally enforceable agreement to pay rent to you or your landlord.

A non-dependant might be your child or an elderly relative.

Non-dependants and how they affect your claim

If any non-dependants live in your home, we may have to reduce the amount of help you get.

This is called a non-dependant deduction.

The amount of deduction made depends on how much gross income your non-dependant has and whether they are working over 16 hours a week.

By gross income we mean all the money they get, which includes:

• earnings (before tax and National Insurance is deducted)
• social security benefits
• interest paid on savings

We will need to see original proof of the non-dependant's income and capital, for example pay slips and bank statements. If you don't show us original proof (i.e. not photocopies), we will deduct the maximum allowed.

Attendance Allowance, Disability Living Allowance and Personal Independence Payment do not count as income.

Non-dependent deduction levels

 The non-dependant deductions change every April. You can view the current deduction levels in the PDF files below:

• Non-dependant deduction rates for Housing Benefits 2024/25
• Non-dependant deduction rates for Council Tax Reduction scheme 2024/25

You can view 2022-23 deduction levels in the PDF files below:

• Non-dependant deduction rates for Housing Benefits 2023/24
• Non-dependant deduction rates for Council Tax Reduction scheme 2023/24

Non-dependent couples

If the non-dependants living in your home are married to each other or living together as a couple, we add their incomes together and make one deduction.

Joint tenant or joint owner

If you share your home with a joint tenant/owner and a non-dependant lives in the home with both of you, we will take only half the normal non-dependant deduction.

When deductions are not made

Deductions are not made if you or your partner are:

• registered blind
• receiving Attendance Allowance
• receiving Disability Living Allowance (care component)
• receiving Personal Independence Payment (daily living component)

Deductions are not made if the non-dependant adult living with you:

• is aged under 25 and receiving Income Support or Income Based Jobseeker's Allowance or is on Universal Credit without any earned income
• is aged under 25 and receiving Employment and Support Allowance in the assessment phase (first 13 weeks)
• receives a Youth Training Allowance
• has been a hospital in-patient for more than 52 weeks
• is a prisoner
• is a student (although deductions will be made if they work during the summer holidays)
• usually lives elsewhere
• receives Pension Credit

Deferred deductions

Special rules apply for existing cases (not new claims), when the claimant or partner is aged 65 or over and:

• a non-dependant moves into the household or
• the income of an existing non-dependant increases

In these circumstances, the non-dependant deduction (or the increased deduction) will not take effect for 26 weeks.

If you have to pay for childcare costs, some of your earnings can be disregarded. This can be up to £175 for 1 child and £300 for 2 or more children each week.

To qualify, your childcare provider must be registered with a local authority or Ofsted. You must also fall into one of the following groups:

• lone parent in paid employment of at least 16 hours a week
• couples where both partners work at least 16 hours each week
• couples, where 1 partner works and the other partner is in hospital, prison, or treated as incapacitated

We will need proof of the childcare payments you make, and if the care is provided by a Childminder, a copy of their Registration Certificate.

You can download a Childcare Costs form for completion by the Childcare Provider:

Childcare Costs Form

If you are a full-time student, you may qualify for help with your rent.

This is if you fall into one of these categories:

• you receive Income Support, Income Based Job Seekers Allowance or Employment & Support Allowance (Income related)
• students who count as part-time
• students under 21 not in higher education (the course must have started before you turned 19)
• students under 20 on non-advanced course of full-time education - or approved training which started/you enrolled on before you turned 19
• students who are pension age
• students who qualify for a disability or severe disability premium
• lone parent
• student couples with dependent children
• you are solely responsible for a child aged under 19 and following a course of further education

Couples - Who must make the claim?

Partners of students, who are not students themselves, are eligible to claim Housing Benefit on behalf of the couple.

Further information

We will need information about the student's income, where they study and the course dates. Please contact us if you need further advice.

Housing Benefit is reduced for some people who are living in a property larger than required for their household size. This applies to working age people renting from a social landlord such as the Council or a housing association.

It does not apply to pensioners.

What are the rules?

The rules restrict the size of accommodation you can receive Housing Benefit for, based on the number of people in your household. The rules allow for 1 bedroom for:

• every adult couple (married or unmarried)
• any other adult aged 16 or over
• any two children of the same sex aged under 16
• any two children aged under 10
• any other child (other than a child whose main home is elsewhere)
• a carer (or team of carers) who do not live with you but provide you and your partner with overnight care
• a disabled person in receipt of certain disability benefits, where they are physically unable to share a room
• an approved foster carer, who is between placements (up to 52 weeks from the end of the last placement)
• a newly approved foster carer (up to 52 weeks from the date of approval), if no child is placed with them during that time

What does under-occupying mean?

If someone is assessed as having more bedrooms in their accommodation than is necessary, they will be under-occupying that property.

This means they will get a reduction on their Housing Benefit.

Under-occupying is also known as 'Bedroom Tax'.

If I am under-occupying, what reduction will I get in my Housing Benefit?

• 14% of your eligible rent for under-occupying one bedroom
• 25% of your eligible rent for under-occupying by two bedrooms or more

If you are thinking of moving, you need to consider these changes before you renew or make a new tenancy agreement.

If your Housing Benefit is cut, you will have to pay the difference between your Housing Benefit and rent to your housing provider.

What are my options?

• pay the difference between your rent and the amount of Housing Benefit you receive
• move to a smaller property (visit Gateway to Homechoice's website for more information about social housing transfers)
• look at the possibility of taking in a lodger - you could rent out your additional room(s) to a lodger for additional income. You would need to check that your landlord allows this. Additional income received from a lodger may count as extra income, so you would need to report this as a change in your circumstances

If you don't want to move, you can remain in your present home but you will have to pay any shortfall in rent due to any extra unoccupied or 'spare' bedrooms.

If you have a specific reason for needing to stay in your property, such as disability, you may be able to apply for Discretionary Housing Payments

Who does under-occupying not apply to?

• anyone who lives in a one bedroom flat or bed-sit
• anyone who is old enough to receive Pension Credits
• anyone whose partner is old enough to receive Pension Credits
• anyone with a shared ownership property

My house has been adapted to cater for my disability - am I included in the size limit rules?

Other than the cases stated above, there are no exceptions to the application of the size limit rules.

Someone in my household has a disability and is not able to share a room - will I be allowed an extra room for them?

You may be able to receive an extra room allowance if you have a disabled person who is unable to share a bedroom. The disabled person must be in receipt of:

• the care component of Disability Living Allowance (middle or high rate)
• Personal Independence Payment
• Attendance Allowance or
• Armed Forces Independent Payment

If you think this applies to someone in your household, please complete our online form:

Apply for extra bedroom allowance

I have a carer (or team of carers) who do not live with me but provide me and my partner with overnight care. What can I do?

They may be entitled to a bedroom. Complete the Additional Bedroom for Overnight Carers form to provide us with details and we will give you a decision.

FAQs

Under Occupation - Frequently Asked Questions

Self-employed people are workers who are not employed under a contract.

Self-employed workers, for example, might be window cleaners, certain taxi drivers, painters and decorators.

A person can be self-employed as a sole trader or as part of a business partnership.

Information Requirements for Self-Employed Customers

If you have recently started trading on a self-employed basis, we will ask for an estimate of the likely income and expenses for the business over the first few months trading. This will help us to work out your entitlement. 

If you have been trading for over 12 months, we will ask for a full year's trading figures – normally in the way of a "profit and loss account". We will ask you for your unique tax reference number.

We may also ask for the most recent tax assessment form received from the HM Revenue and Customs (HMRC).

We may also ask you to complete a Self-employed earnings form.

Complete a self-employed earnings form

What is my Total Income for Housing Benefit/Council Tax Reduction Purposes?

The starting point in the calculation is to work out the total business income for the period in question. This will include all money coming in, business start-up allowances, etc. but will not include sums of capital paid into the business.

Which Expenses are then taken off this Income?

The rules the Council use are like the rules operated for Tax purposes. Notable differences are that we cannot deduct any sums for expenses such as depreciation, business entertaining, capital repayments on loans or any sum which relates purely or partially to a private expense.

Self-Employed Childminders

Childminders are treated differently. Instead of working out what their actual expenses are, two thirds of their total income will be disregarded. The remaining third becomes their "business income" in our calculations.

Business Partnerships

If you are a partner in a partnership, the pre-tax profit for the business (i.e. gross income less expenses) is divided equally between the number of partners. If there is a formal agreement in the partnership which governs that profit should be treated differently, this will take priority.

Tax & National Insurance

We will calculate Tax and National Insurance deductions ourselves based on the pre-tax profit figure. These figures may differ from the figures worked out by HMRC. Half of any private pension contributions are also disregarded.

All the above are then deducted from your pre-tax profit figure to give us the net income amount to be used when calculating Housing Benefit and Council Tax Reduction.

It is a condition of receiving Housing Benefit that you are living in the property for which you are claiming benefit.

There are certain exceptions to this rule which means that some people can continue to claim Housing Benefit during periods of absence.

General rules

1. The person must have an intention to return and occupy the dwelling as their home
2. The person (or the landlord) must not let or sublet the accommodation whilst the person is away
3. The person must return within the time limits stated below:
   • for an absence within Great Britain (England, Scotland and Wales) a person can be absent up to 13 weeks for any reason
   • for an absence outside Great Britain a person can normally only be absent for a continuous period of up to 4 weeks

It is possible to have these periods extended in certain circumstances. Please download our temporary absence information for details about how long you can be absent and still retain your Housing Benefit.

If you are unsure how your absence will be treated contact us for advice.

Information you need to supply

If you know that you will be away from your property for a length of time, please advise us beforehand. We need the following information:

• the dates of the likely period of absence
• the reason for the absence
• a statement confirming that the person will return to live in your property and
• that you will not sublet it during the absence

You may also be asked to complete a new application form.

During the absence

If anything changes during the absence you need to let us know immediately if:

• the person decides not to return to the property
• the reason for absence changes
• the absence is likely to be for longer than expected

Report a change of circumstances