Are you of working age and currently in receipt of housing benefit? If so, you may be affected by the under-occupation cap.
What is the under-occupation cap?
The government is introducing a cap on housing benefit for working age tenants who are under-occupying their home. From April 2013, you will have a reduction in your housing benefit if you have:
- one spare room - your housing benefit will be cut by 14% of the rent
- two spare rooms - your housing benefit will be cut by 25% of the rent.
You will be considered as under-occupying if you have more bedrooms than you need. Under the new rules, one bedroom is allowed for each of the following:
- every adult couple
- any other adult aged 16 years or over
- any two children of the same sex aged under 16 years old
- any two children aged under 10 years old, regardless of sex
- any other child aged under 16 years old
- a non-resident carer (the claimant or their partner has a disability and need overnight care).
If your housing benefit has been reduced, you may need to make up the difference from other income. If you do not pay your rent in full, you could lose your home.
How do I know if I am affected?
Housing benefit entitlement letters will include details of any reduction and what your housing benefit entitlement is. We will also contact you if we know you have been affected by the cap.
All tenants considering downsizing will be offered individual support on moving home, which will include registering them for a cash incentive.
Which households will be exempt from the cap?
The cap only affects working age households. Working age claimants are normally aged over 18 years old and under pension age. Pension age claimants are people who have reached the qualifying age for State Pension Credit. The qualifying age is gradually increasing. To find out if you are eligible visit the gov.uk website.
What options are available?
If you are under-occupying you can:
- move to a smaller property which matches your current household size
- make up the difference in rent from other benefits or income.
What can I do to avoid the under-occupation cap?
The best course of action to avoid the under-occupation cap is to move to a smaller property. If you do decide to move, we recommend you take action quickly, as you will still be required to pay the shortfall in rent until you move. Find our more about moving home here.
Where can I get help to manage a reduction in benefits?
If you are affected by the under-occupation cap and you choose not to move, or you are waiting to move, your income from benefits will reduce. Working out a household budget can help with managing your finances. The money advice service provides a useful online budget planner to help you manage your finances.
We can also make an appointment for you to see a specialist adviser, who can give budgeting, debt and benefits advice.