The Changes to Housing Benefit and What It Actually Means

The changes to benefits introduced in the Welfare Reform Act 2012 and due to be applied from April 2013 have brought with them a host of difficulties for social housing tenants wanting to exchange their properties. Not only will it force many to seek mutual exchanges in lower rent areas which tend to be estates and the more undesirable areas of the United Kingdom. This being due to the capping of nearly all benefits lumped together which will include child benefit, child tax credit and, housing benefit, to name a few.

Technically speaking, this benefit cap is really a “Housing Benefit cap” as it is housing benefit awards that will be restricted for social housing tenants as well as private renting tenants in receipt of it.

The benefit cap means that single people, without children, being capped at £350 per week and couples or lone parents awarded a maximum of £500 per week regardless of the number of children. Amounts above these stated will be offset against the amount of Housing benefit received. For example, if a household is £50 per week above the benefit cap level after calculating the amount received from all inclusive benefits, then their award will be reduced by £50 per week. A household that is above the cap level by £50 per week but receives less than £50 per week in Housing benefit will see their award reduced until the last 50p of it remains. This highlights that a household may receive more income than the benefit cap level without it adversely affecting their benefits other than housing benefit received. Until Universal Credit is completely operational the benefit cap can only be applied to those in receipt of Housing benefit. However, once a household has been transferred to Universal Credit the benefit cap will be applied without restriction to a particular benefit.
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