How is my Housing Benefit calculated?

If you get Income Support, income-based Jobseeker’s Allowance, income-related Employment Support Allowance or Pension Guarantee Credit, you will normally get all your rent paid. However, deductions may apply.

If you are not getting the above benefits, we will compare your income with your ‘applicable amount’. The applicable amount is the minimum amount the government says you and your family need to live on each week.

When working out your applicable amount we will look at:

  • your and any partner’s age

  • any disabilities you and your partner may have

  • any children you get child benefit for.

What is counted as income?

  • wages less deductions for tax and National Insurance

  • self-employed earnings

  • Tax Credits (child and working)

  • State Pensions

  • Pension Credit (savings credit element)

  • other pensions (including occupational and private pensions)

  • annuities

  • Employment Support Allowance (contribution-based)

  • Incapacity Benefit

  • other Social Security benefits/allowances  (Jobseeker’s Allowance (contribution-based)), Severe Disablement Allowance, Widows Pension etc)

  • maintenance received (except payments made specifically for children)

  • charitable payments

  • student grants/loans

  • any other income received by you or your partner on a regular basis

Some benefits and allowances, such as Child Benefit, Attendance Allowance, Disability Living Allowance and Personal Independence Payments are not counted as income, but do affect the calculation so you must tell us if you receive any of them. We also ignore payments for War Disability Pensions or War Widows Pensions, but you must tell us if you receive them.

We will deduct the following expenses from the income we use to calculate your entitlement:

  • 50% of the contributions paid into a pension scheme either from your wages or through personal contribution schemes

  • child care costs (up to £175 for one child and up to £300 for two or more children) if you and your partner work 16 hours or more per week.

See Child Care Costs for more information.

What about savings?

Unless you receive Pension Guarantee Credit, Income Support, income-based Jobseeker’s Allowance, or income-related Employment Support Allowance, we will look at the amount of savings and other capital you and any partner have. This includes:

  • money held in  banks, building societies or the Post Office

  • income bonds

  • National Savings Certificates

  • shares

  • ISAs

  • TESSAs

  • cash held at home

  • property (not the one you live in) or land you own.

How are savings used in the calculation?

The way we treat your savings is different depending on your age.

People of Working Age Pensioners

When we look at your savings we do not count the first £6,000.

For every £250 or part of £250 you have in savings above £6,000, £1 will be used as income. We call this 'tariff income' and it will be added to your other money when we work out your normal weekly income.

For example:

  • if you have £8,450 in savings, we do not count the first £6,000 leaving £2,450

  • £2,450 divided by £250 = £10 (tariff income)

When we look at your savings we do not count the first £10,000.

For every £500 or part of £500 you have in savings above £10,000, £1 will be used as income. We call this 'tariff income' and it will be added to your other income when we work out your normal weekly income.

For example:

  • if you have £14,000 in savings, we do not count the first £10,000 leaving £4,000

  • £4,000 divided by £500 = £8 (tariff income)

If your total savings are £16,000 or more, you will not qualify for any benefit.

Some types of compensation payments (e.g a Far East compensation payment) do not count when working out your total savings. You must tell us about all savings and we will let you know if we can ignore them.

Benefit for pensioners

The way we work out benefit for people of state pension credit age is different. Find out more about Housing Benefit for Pensioners.

Deductions which may apply to your entitlement

The amount of benefit you get may be reduced because:

  • the amount of rent we can use to work out your housing benefit may be restricted by the Valuation Agency if your claim has been worked out under the Local Housing Allowance rules - the rate used may be lower than the actual rent charged

  • you are subject to an under-occupation deduction because you have more bedrooms than you need

  • you have other adults (also called non-dependants) living with you.

Find out more about Non-Dependant Deductions.

How long does it take?

We will try to deal with your claim within 14 days of receiving all the information we need.

Once we have worked out your claim, we will send you a decision letter explaining how we have worked out your benefit. Please read the letter to make sure we are using the correct information. If we aren’t, let us know straight away.

Our guide, Housing Benefit Notification Letters Explained, will help you to understand the letters we send you.

How often is my benefit paid?

Housing benefit is normally paid every four weeks and each payment covers the previous four weeks housing benefit entitlement.

Who is it paid to?

If you rent from a housing association, you can choose to have it paid to you or your landlord.

If you rent from a private landlord, your benefit will be paid to you. For more information about this, visit the Local Housing Allowance page.