Page created: 21 April 2021

Housing Costs Elements

You can get help paying for your housing if you are eligible for Universal Credit. This is called your housing payment. Find out more about how much you can receive and what your housing payment can help to pay.

Universal Credit housing element has replaced the old Legacy Housing Benefit. This additional element is paid towards liability for rent or mortgage interest.

How much you can receive for housing costs will depend upon how many bedrooms you need, and whether you are living in socially rented or privately rented accommodation.

Socially rented accommodation

For claimants living in socially rented accommodation, such as council properties or housing association assured tenancies, your full rent will be met under Universal Credit.

Private rented accommodation

If you are privately renting, how much housing element you can be paid towards your rent will be based upon the Local Housing Allowance (LHA) rates. Universal Credit will check the LHA rates in your area by looking at the property’s post code and the number of rooms in the home. UC will either pay the actual rent on the property, or the LHA rate, whichever is cheapest.

This means that Universal Credit will never pay more than the LHA rate in your area.

If you are single, under 35 and without any children, you will only be able to receive the ‘shared accommodation’ LHA rates. Unfortunately, the shared accommodation LHA rates are much lower than the usual LHA rates.   

To find out what the LHA rates are for your property, or a potential property you may be thinking of moving to, further information can be found here.

If you find that, due to your circumstances, there is a shortfall in how much housing element you receive and the actual rent of your private accommodation, you can apply for what is called a Discretionary Housing Payment (DHP). A DHP is paid for by your local authority and it is discretionary, so to be eligible you will need to fill out an audit application to find out exactly what your monthly in-comings and out-goings are. With this information your local authority will then decide if a DHP will be paid.

To apply for a DHP,  you will need to contact your local authority to ask for an application audit form.

Bedroom tax

If you have more bedrooms than you need, a bedroom tax can be applied to your housing element, reducing the maximum amount of Universal Credit you receive each month.

There is a 14% reduction for one spare bedroom, or a 25% reduction for two or more spare bedrooms.

Exceptions can be made from the bedroom tax, if:

  • You need an overnight carer, but they do not normally live with you.
  • You are a foster carer who has had a child placed with you, or you have been registered as a fosterer in the last 12-months.
  • You are the parents of an armed forces personnel while your child is away on duty.
  • You are the parent of a severely disabled child who is unable to share a room with a sibling.

Mortgages

For those of you who have a mortgage and find yourself on Universal Credit, unfortunately, you will not be eligible for housing element as you will not be considered as someone liable to pay rent. However, you can get help towards paying your mortgage interest rates in the form of a loan from the DWP of up to £200k.

This is called Support for Mortgage Interest (SMI).

You will need to have had nine consecutive assessments periods (39 weeks) under Universal Credit, and also, have not earned any income within this period (zero earned income). This means you have not earned even one pound within this time.

For further details on SMI and how to apply can be found here.