How Is Housing Benefit Calculated?

How much Housing Benefit you can get is calculated by taking various factors into consideration, such as those listed below. If you have more than £16,000 in savings then you will not be eligible for Housing Benefit unless you get the Guarantee Credit of Pension Credit.

Should you wish to find out what you could be eligible for before applying, you can use an online benefits calculator from the website.

Your Income and Savings

This includes any benefits, child support or wages, it also includes the income of your partner if they live with you. Savings includes any money you have in current or savings accounts, ISAs, stocks and shares or cash.

If you are of working age, Housing Benefit is reduced if you have savings of more than £6,000. The amount that it is reduced by will depend on how much you have over £6,000.

If you are of State Pension age (or in a care home) and you have savings of more than £10,000 then the amount of Housing Benefit you are entitled to is also reduced depending on how much you have.

You are not eligible for Housing Benefit if you have capital (which includes savings and property we cannot disregard) of more than £16,000 unless you are in receipt of the Guarantee Credit of Pension Credit. If the amount of savings you have changes or they increase to more than £16,000, you must tell us immediately.

Your Eligible Rent

This is the amount of rent you would need to pay to live in a property in your area. It covers some service charges that must be paid for if you are to live there – for example maintenance of communal areas. Eligible rent does not provide cover for living expenses such as heating, hot water or fuel costs.

If you rent from a private landlord and are entitled to Housing Benefit, your eligible rent is either the weekly Local Housing Allowance or the cost of your actual rent - whichever one is lower.

People in Your Household

The amount of Housing Benefit you could get will depend on how many people live in your household and their circumstances – for example if they are disabled. Housing Benefit will also depend on the number of non dependants living with you. Your benefit will be reduced by a fixed amount per non dependant living with you. This amount is set by the government – you can find out more on our Non Dependants page.

How Many Bedrooms You Need

Since April 2013 Housing Benefit payments will only cover the number of bedrooms that your household needs. For the purposes of working out your Housing Benefit, the following people are expected to share a bedroom:

  • An adult couple
  • Two children under 16 if they are of the same sex
  • Two children under ten regardless of their sex

Having more bedrooms than you need (according to the above) is known as under occupancy and your Housing Benefit payments will be reduced. If you have one spare bedroom then your Housing Benefit will be reduced by 14%. If you have two or more spare bedrooms then your Housing Benefit will be reduced by 25%.

However, the following people are allowed their own bedroom:

  • A single adult (16 or over)
  • A child that would normally share but can't because all the shared bedrooms are already full – for example if you have three children and two already share
  • Children who cannot share a bedroom because they have a disability or medical condition
  • An overnight carer (but only if they need to stay overnight and don't otherwise normally live with you)
  • Adult children in the armed forces who are deployed on operations but usually live at home

Are There Any Exceptions to Under Occupancy Rules?

You will not be affected by under occupancy rules if:

  • you or your partner (that you live with) is of State Pension age
  • you are living in some types of temporary accommodation
  • you are living in supported accommodation
  • you are the parent of a student who studies away but your home is their main place of residence
  • you have recently suffered a bereavement which has resulted in under occupancy – in this situation one year is given before under occupancy deductions are made

Find out how many bedrooms you are entitled to using the Direct Gov, Bedroom Calculator

Foster Carers

One spare bedroom is allowed for foster carers. If you are a newly appointed foster carer, you are allowed a spare bedroom for up to 52 weeks if no child is placed with you in that time. The 52 weeks starts from the date you were approved.

If you are an approved foster carer you are allowed a spare bedroom for up to 52 weeks from your last placement.