Help Paying for your Home with Housing Benefits

- by Becky Hall
A Guide to the Welfare System in the UK – Chapter 10

Struggling to pay your housing costs? You may be eligible for help. Read this article from Cashfloat to find out all about housing benefits.

Your guide to the benefit system chapter 10 housing benefits- Cashfloat your guide to the benefit system chapter 10 housing benefits- Cashfloat

In this chapter, we will be looking at how housing benefits can help people to pay their different housing costs. We will cover rent, paying a mortgage, living in shared ownership schemes or living in temporary, supported or sheltered housing.

In 1982 local councils introduced the Housing Benefit to provide support for those who needed help paying their housing costs. Universal Credit is currently replacing Housing Benefit.

This chapter discusses how Housing Benefit works, who can still make a claim for it and how the Universal Credit housing element differs. Additionally, we will explain how those receiving Housing Benefit will move over to Universal Credit.



Housing Benefit and Universal Credit

Help is available to pay your rent if you are on a low income or completely out of work. Depending on your circumstances, you might be able to receive all, or part, of your rent, mortgage or other costs.

Traditionally, local councils provided help through Housing Benefit and until recently, people who needed help to pay their housing costs would apply for this. However, Universal Credit is now replacing Housing Benefit. This means that most new claimants for housing support will have to apply for Universal Credit instead. While this is the case, many people still receive Housing Benefit and some people can make a new claim for it.

The amount that people receive for Housing Benefit or Universal Credit is individual. What you receive will depend largely on your circumstances, where you live and what payments you need to cover. You will usually receive a monthly payment.

In this article, we’ll explain everything that people need to know about getting help to pay for housing. We’ll explain how to apply for housing support under Universal Credit, who can still apply for Housing Benefit and what people who are currently receiving Housing Benefit should expect in future.

The amount you receive for housing support depends on where you live- Cashfloat the amount you receive for housing support depends on where you live- Cashfloat

Should I apply for Universal Credit or Housing Benefit?

This is the first question that most people ask. Nowadays, most new claimants for financial support to cover the cost of their housing should apply for Universal Credit. Housing Benefit is now only available to new applicants who are over the state pension age or live in sheltered, supported or temporary housing. For a full explanation of the eligibility rules for Housing Benefit, go to the gov.uk website here.

Who is Eligible for Housing Support Under Universal Credit?

There is no set level of income to be eligible for Universal Credit. What you you can receive depends on your circumstances. Generally, people who are on a low income or are unemployed can make a claim. Therefore, if you struggle to pay for your housing cost, it is worth seeing if you are could get help under Universal Credit. The quickest way you can find out what you might receive is to use a benefits calculator.

Here’s what you need to know about Universal Credit Eligibility:

To be eligible for support under Universal Credit you must:

  • Be over 18 years old (with a few exceptions for 16-17 year olds).
  • Be under the state pension age.
  • Live in the UK.
  • Have less than £16,000 in savings as an individual if you make an individual application or as a couple if you live with your partner.

How the Universal Credit Housing Element Works

Everyone eligible for Universal Credit is allocated a maximum standard monthly allowance, which is calculated according to their age and whether they live with a partner. From the maximum standard allowance, deductions are made according to a person’s circumstances. Following these deductions, a person’s individual standard monthly allowance is calculated. This amount is provided to cover a person’s general living expenses.

On top of a person’s standard monthly allowance, they may be eligible for extra payments if they have extra costs to cover. The cost of housing may be one of these extra costs. If the government approve you for extra help to cover the cost of housing, you will receive a payment for this on top of your standard monthly allowance.

Standard Maximum Monthly Allowances

Personal CircumstancesMaximum Monthly Amount
An individual under 25£344
An individual over 25£411.51
A couple both under 25£490.60 (for both people)
A couple with at least 1 over the age of 25£596.58 (for both people)

Many people will receive less than the standard maximum monthly allowance. People who live with their partner will have to make a joint application and usually receive less per person than an individual claimant. When you make a joint application, both you and your partner’s earnings and savings will affect the outcome.

Extra Payments for Housing

If you qualify for extra payments to cover your housing cost, you will receive these payments on top of your standard monthly allowance. This is known as receiving the ‘housing element’ of Universal Credit. How much you receive depends on your circumstances, such as where you live, whether you rent or own your home and whether or not you have any income. The quickest way to find out what you could receive is to use a benefits calculator.

Different support is available for people according to whether they pay a mortgage, live in a shared ownership scheme or pay rent.


The Benefit Cap

While it is possible to have all of your housing costs covered by Universal Credit, some people will find that the total amount that they can receive in benefits is affected by the benefit cap. The benefit cap applies to Universal Credit and extra payments received under it for housing. Under the cap, there is a limit on the total amount of benefits a person can receive.

Some people, notably those who suffer from a disability or receive Carer’s Allowance, are exempt from the cap. Also, for most people, there is a grace period of nine months after first claiming Universal Credit in which it does not apply.

However, the cap will affect many people. Here’s how much the cap is set at:

Inside Greater London per week / per yearOutside Greater London per week / per year
For a single adult£15,410 / £296.35£13,400 / £257.69
For a single parent whose children live with them£23,000 / £442.31£20,000 / £384.62
For a couple£23,000 / £442.31£20,000 / £384.62

Find out more about the benefit cap here.

How to Apply for Housing Benefit under Universal Credit

If you are unsure whether you are entitled to help under Universal Credit, it is always good to use a benefits calculator to what you could receive. You can apply online, and you will need to provide personal information. This includes information about your income, details of any savings you have and details of the current cost of your housing. If you need help with your application, ring the Universal Credit helpline on 0800 328 5644.

Remember that if you live with your partner, you will need to make a joint claim. You will normally have to make a joint claim if:

  • You are married
  • In a civil partnership and live together
  • You are unmarried but live together as if you are a married couple

Generally, if your partner is a regular visitor to your home but owns or rents a property elsewhere, this will not count as living together. Also, if you still live in the same household as your previous partner, but you are no longer a couple, this will not require a joint application.

It will take around five weeks from application until you receive your first Universal Credit payment. If you need the money before that, apply for a payment advance here. Alternatively, you could apply for a loans for unemployed online. As these loans tend to be expensive, make sure you will have the money to pay it back on time.

Housing Benefits Change of Circumstances

After your claim for Universal Credit is accepted, you will continue to receive regular payments until either your circumstances change and you become eligible for more benefits, or until you begin to earn money. As you earn more money, the amount that you receive will decrease. For every £1 you earn, your Universal Credit payment will drop by 63p until you reach your personal limit. Your limit varies according to your circumstances. After you reach your limit, your Universal Credit payments will stop.

The Work Allowance for People with Children

People who have children are given a ‘work allowance’ under Universal Credit. This is an amount that they are allowed to earn before their Universal Credit payment will decrease. People who receive support for their housing costs have a reduced work allowance. For people who receive no support for their housing costs, the work allowance is £515 per month. For people who receive support for the cost of their housing, it is £293 per month.


If you receive housing support, the work allowance for people with children is £293/month- Cashfloat If you receive housing support, the work allowance for people with children is £293/month

What Happens to Other Benefits When you Claim Universal Credit

If you are already claiming other benefits and need to make a new claim for Universal Credit to cover your housing costs, your other benefits may be affected. Normally, payments you receive for Housing Benefit, income-related Employment and Support Allowance, income-based Jobseeker’s Allowance, Child Tax Credits, Working Tax Credits and Income support will end when you start a new claim for Universal Credit. While you will still receive support under Universal Credit, the amount that you receive may be different. You can use a benefits calculator to determine if you would be better or worse off under Universal Credit.

Note: Don’t forget that you may also be entitled to Discretionary Housing Payment if you need additional help on top of what you can receive under Universal Credit. Go to the end of this chapter to find out more.

Housing Benefit Application

Most people making new claims for support with housing costs, will now have to apply for Universal Credit. However there are some people still eligible for the legacy housing benefit, and they can still make a claim. Below are eligibility requirements:

If you are over the state pension age, to be eligible for Housing Benefit you must be one or more of the following:


  • Single.
  • Living with your partner and you have both reached the state pension age.
  • Living with your partner and one of you has reached the state pension age and started claiming Pension Credit (as a couple) before 15th May 2019.
  • Be in supported, sheltered or temporary housing.

If you are under the state pension age, to be eligible for Housing Benefit you must be one or more of the following:


  • In temporary accommodation, such as a bed and breakfast, arranged by your council.
  • In a refuge for survivors of domestic abuse.
  • Living in sheltered or supported housing, which provides you with care, support or supervision.


In addition to meeting the above requirements, several things may make you ineligible for Housing Benefit. Among other things, you will be ineligible if you are paying a mortgage on your own home, if you have over £16,000 in savings, if you live with a close relative or if your partner already claims Housing Benefit.

What People Can Receive

You can receive Housing Benefit to pay for privately rented housing, or housing that you rent from a local authority or a housing association. Unlike Universal Credit, there is no support for people who own their own home and need to make mortgage payments. However, these people may be able to claim Support for Mortgage Interest.


How the Benefit Cap will Affect your Claim

As with housing support provided by Universal Credit, payments made under Housing Benefit may be affected by the benefit cap. Under the benefit cap, the total amount of benefits that a person, or a couple, can receive is limited. For a couple outside of Greater London, the maximum amount they can receive is usually £20,000. Inside Greater London, it is £23,000. Find out more about the benefit cap here.

Note: Don’t forget that you may also be entitled to Discretionary Housing Payment if you need additional help on top of what you can receive under Housing Benefit. Go to the end of this chapter to find out more.

Information for People Who Already Receive Housing Benefit

Housing Benefit is now one of the legacy benefits, which Universal Credit is replacing. However, as of November 2020, there were 2,996,172 people still receiving Housing Benefit, at an average of £108 per week. The government plans to move everyone eligible to receive Universal Credit over to it by 2024. In the meantime, many people who receive Housing Benefit but are eligible for Universal Credit can stay on Housing Benefit.

Between 2018 and 2020 the number of housing benefits claimants decreased from 3.9 million to 3 million as universal credit claims increased-Cashfloat Between 2018 and 2020 the number of housing benefits claimants decreased from 3.9 million to 3 million as universal credit claims increased-Cashfloat

When will People Move Over to Universal Credit?

As of early 2021, people are only moving over to Universal Credit, from legacy benefits such as Housing Benefit, in what is called ‘natural migration’. This means that people are moving over voluntarily for one of the following reasons:

  • They need to make a new claim for Universal Credit because they have become entitled to another benefit covered by it.
  • They choose to move over to Universal Credit, as they will be better off on it.
  • Their current claim for a legacy benefit ends, then they will be unable to renew their claim but will have to apply for Universal Credit instead next time they make a claim.

The government plans to move everyone over from legacy benefits to Universal Credit by 2024 and eventually they will introduce ‘managed migration’. Under managed migration, the government will write to people and request that they apply for Universal Credit and end their current claims to any legacy benefits they receive.

Want to know whether you'll be better off under Universal Credit? Use a benefits calculator to find out-Cashfloat Want to know whether you'll be better off under Universal Credit? Use a benefits calculator to find out-Cashfloat

Will I Receive More or Less Under Universal Credit

Whether a person will receive more or less under Universal Credit depends on their circumstances. Use a benefits calculator to see how much you will receive under Universal Credit. You may find that you will be better off under Universal Credit.

Note: Don’t forget that you may also be entitled to Discretionary Housing Payment if you need additional help on top of what you can receive under Housing Benefit. Read on to find out more.

Extra Housing Support: Discretionary Housing Payment, Extended Payment of Housing Benefit and Council Tax Reduction

On top of the normal help that is available through Universal Credit and Housing Benefit, other support is available. If your payments do not cover what you owe, you may be able to claim Discretionary Housing Payment. If you are claiming Housing Benefit and will struggle to pay your rent when you return to work, you may be able to claim an extended Housing Benefit payment to tide you over while you return to work. In addition to this, many people who are eligible for Housing Benefit or Universal Credit will become eligible for Council Tax Reduction.



FAQs about Housing Benefit and Universal Credit for Housing

If I have a child studying away from home as a full-time student, does his room count as a spare bedroom?

No. If your child is a full-time student or in the Armed Forces, their bedroom does not count as a spare bedroom.

Can I receive Housing Benefit or Universal Credit for a room in a flatshare?

Yes, you can claim for a bed-sit or a single room in shared accommodation. You will receive the Shared Accommodation Rate of either Housing Benefit or Universal Credit. Single people under 35 can only claim the shared accommodation rate, whether they live in shared accommodation or not.

Can I claim Housing Benefit or Universal Credit if I am a full-time student?

Full-time students are not eligible for Housing Benefit unless they:

  • are disabled.
  • have a child.
  • live with their partner and they are eligible for Universal Credit.
  • are under 21 and have no parental support.
Why can’t I claim Housing Benefit if I receive Universal Credit?

Your monthly Universal Credit payment includes a housing benefit so you can pay your landlord directly.

When will I have to move from Housing Benefit to Universal Credit?

The government plans to move everyone over by 2024.

Should I apply for Housing Benefit or Universal Credit?

Universal Credit is replacing Housing Benefit. Apply for Universal Credit unless you are over the state pension age or live in sheltered, supported or temporary accommodation.



Summary: Housing Benefits UK

This article mainly discussed Housing Benefit and Universal Credit for those who need support for their housing payments. If you are on a low income or unemployed, you should see if you are eligible to receive either of these benefits. Don’t forget that there are more benefits that you can get for housing costs if these are not enough. These include Discretionary Housing Payment, Extended Payment of Housing Benefit and Council Tax Reduction. On top of this, you may be able to receive benefits that aren’t related to your housing. Have a look at the rest of our guide to see what else you might be entitled to.



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About The Author
Becky Hall
Becky never thought she would be a financial blogger. But Fate arranged that Becky had to put her accounting degree on the back burner right after she graduated with a first in Business and Accounting. While doing bookkeeping as a freelancer for private clients, Becky noticed how many cashflow problems can be solved with a little bit of education. Trying to keep her clients out of debt, Becky began writing resources which she distributed to clients. What began as writing advice for clients evolved into a passion and now Becky found her platform at Cashfloat. When she isn’t writing, calculating or budgeting, Becky can be found at her piano playing something classical.
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