Guidance

A10/2020: Pre-1996 cases: Rent Officer referrals

Updated 10 February 2021

Who should read

All Housing Benefit staff

Action

For information

Subject

Pre-1996 cases: Rent Officer referrals

Guidance Manual

The information in this circular does not affect the content of the HB Guidance Manual.

Queries

For queries about the:

• general or technical content of this circular, email: housing.benefitenquiries@dwp.gov.uk
• distribution of this circular, contact: lawelfare.correspondence@dwp.gov.uk

Introduction

1. The purpose of this circular is to remind local authorities (LAs) of the guidance and legislation covering rent officer (RO) referrals in respect of pre-1996 cases to support the correct calculation of Housing Benefit (HB) subsidy. 2. Pre-1996 cases include:

• those who have been continuously entitled to HB since 1 January 1996 at the same address, subject to permitted breaks in the award and permitted periods in other accommodation; and
• those who live in ‘exempt accommodation.’ The full definition for exempt accommodation can be found in The Housing Benefit and Council Tax Benefit (Consequential Provisions) Regulations 2006 Schedule 3 Transitional and Savings Provisions sub para 4(10).

3. All rent allowance cases subject to the pre-1996 (‘old scheme’) rules must be referred to the RO unless the tenancy is excluded from referral (see schedule 2 to the HB Regulations 2006). Therefore, exempt accommodation provided by a landlord other than a registered housing association is not an ‘excluded tenancy’ through schedule 2 of the HB regulations, so must be referred to the RO.

Rent Officer referrals

4. We are aware that some LAs may not be referring some cases which are assessed using the pre-1996 rules to the RO because they consider the rent to be reasonable. However, a referral to the RO must be made for subsidy purposes, irrespective of whether the size and rent charged are deemed reasonable, when the landlord is not a registered housing association. This circular clarifies and reinforces the guidance in the HB Guidance Manual and the Subsidy Guidance Manual in line with regulations.

5. To clarify, all pre-1996 cases where the landlord is not a registered housing association (in other words, registered with the Regulator of Social Housing, Welsh Government or Scottish Housing Regulator) must be referred to the RO. The requirement to refer to ROs is covered in Regulation 14

6. However, where the landlord is a registered housing association and the LA considers the rent payable is unreasonably high, the case must also be referred to the RO (see Paragraph 3 in Schedule 2 of The Housing Benefit Regulations 2006).

Rent officer determinations

7. The rent officer determination (ROD) is used to determine the relevant subsidy amount for pre-1996 cases (see paragraphs 17 - 21 below for more details).

8. RODs can also be referred to when restricting the rent using Regulation 13 powers. There is guidance on using restricting rent in pre-1996 cases at A4.1060 onwards of the Housing Benefit Guidance Manual. This guidance is currently part of the wider review of specified accommodation rules and guidance.

Making RO referrals

9. The information LAs must include with RO referrals is stated in Regulation 114a and Schedule 1 of The Housing Benefit Regulations 2006. For exempt accommodation in particular, Regulation 114a paragraphs 3(d), 3(f) and 4 and Schedule 1 apply. These require LAs to:

• notify ROs of the total rent the claimant is required to pay (gross rent) (Regulation 114a 3(d))
• identify and value any ineligible support charges, specifically those listed at paragraph 1(a)(iv) and (c) to (f) of Schedule 1 (Regulation 114a 3(f))
• deduct the identified and valued support charges from the gross rent (Regulation 114a 4(a))
• notify the RO of the rent remaining after deduction of ineligible support charges (Regulation 114a 4(b))

10. The charges that are listed at paragraph 1(a)(iv) and (c) to (f) of Schedule 1 which must be valued and deducted are those:

• For cleaning of rooms and windows, except for the cleaning of communal areas or window exteriors that cannot be cleaned by someone in the claimant’s household, provided the charge is not met by LA funding
• For the provision of an emergency alarm system
• In respect of medical expenses (including costs of treatment or counselling)
• For the provision of personal/nursing care
• For counselling or any other support services, regardless of who provides the service

11. Any other ineligible service charges should be identified but do not need to be valued or deducted from the gross rent before the referral is made.

12. It is essential that these charges are valued appropriately where these are included in the gross rent so that the net rent supplied to the RO is as accurate as possible.

13. If the charge is specified, LAs should deduct the whole amount of the charge unless they consider the charge to be unreasonably low for the service provided. In this case, LAs should substitute their own valuation of the cost of providing that service and deduct that amount.

14. Where the charge is not specified, the LA should apportion the charge out from the overall rent at an amount that is attributable to the provision of the service. LAs should have regard to the cost of comparable services when determining the amount to apportion.

15. LAs should refer to A4.720 and A4.860 of the HB Guidance Manual for further guidance on ineligible service charges and valuing them.

16. If the referral does not have the information required by legislation, or the RO requires clarification, they can request further information. The LA is required to then provide that information.

Calculating subsidy

17. Subsidy control is retained for HB expenditure on cases required to have a ROD. The ROD determines the level of DWP subsidy LAs will receive on their HB expenditure. Ordinarily, full subsidy is provided up to the ROD with no subsidy provided for expenditure above the ROD.

18. Where the claimant or their family member is in a vulnerable group, additional considerations must be made before the rent can be restricted. The vulnerable group is defined in The Housing Benefit and Council Tax Benefit (Consequential Provisions) Regulations 2006 Schedule 3 Transitional and Savings Provisions sub-paragraph 13 (4). If the rent cannot be restricted due to these provisions, subsidy is awarded at 60% on expenditure above the ROD and full subsidy on expenditure up to the ROD.

19. To calculate the eligible rent for subsidy purposes, use the claim-related rent figure from the ROD which will already be net of all ineligible charges, for example, fuel, water charges, laundry, cleaning, etc. unless the tenant occupies accommodation where the landlord provides substantial board and attendance. In these cases, the RO will return a claim-related rent, which may include an amount for meals from which the standard deduction for meals should be made.

20. In general, no subsidy will be payable on HB attributable to rent above the ROD. However, there are exceptions to this general rule which are when:

• LAs are satisfied that the claimant could have met their rent when they took on the liability and that they did not claim HB within the previous 52 weeks to their claim. This means that the claimant will be entitled to HB based on the contractual rent less ineligible charges for the first 13 weeks. The effect is for that period full subsidy will be paid; or

• The LA concludes that it is unable to reduce the eligible rent because of the provisions of the old regulations 13(4), (5) and (7) and 13ZA. Subsidy at the rate of 60% will be payable on HB attributable to that part of the eligible rent which exceeds the ROD, see HB/CTB Guidance Manual, A4.960, Eligible rent; or

• The LA decides that a ROD is not required because the landlord is a registered housing association and the rent is not unreasonably high subsidy will be claimed at the rate of 100%.

21. Where the eligible rent used in the HB calculation exceeds the ROD, nil or 60% subsidy will apply to HB attributable to the excess. For example, if the eligible rent used to calculate HB exceeds the ROD by £10, the first £10 of any HB awarded will attract a reduced rate of subsidy (60% or nil). The following examples show how subsidy should be calculated.

Example 1

Rent significantly higher than rents for similar tenancies. The LA cannot restrict HB under the old regulations 13(4), (5) and (7).

Rent charged = £169.00

Claim-Related Rent = £140.00

Eligible rent figure used to calculate HB = £169.00.

Since the eligible rent is £29.00 above the CRR the first £29.00 of any benefit awarded will attract a reduced rate of subsidy (60%).

If HB award is £169.00, subsidy is 60% on £29.00 (£169.00-£140.00) and 100% on £140.00.

If HB award is £100.00, subsidy is 60% on £29.00 and 100% on £71.00.

If HB award is £29.00 or less, subsidy is 60% on amount paid.

Example 2

Rent significantly higher than rents for similar tenancies. The old regulations 13(4), (5) and (7) do not apply; the LA restricts HB but not to the level of the determination.

Rent charged = £275.00

Claim-Related Rent = £105.00

Eligible rent figure used to calculate HB = £228.00

Since the eligible rent is £123.00 above the CRR the first £123.00 of any HB awarded will attract nil subsidy

If HB award is £228.00, subsidy is nil on £123.00 (£228.00-£105.00) and 100% on £105.00

If HB award is £150.00, subsidy is nil on £123.00 and 100% on £27.00

If HB award is £100.00 or less, no subsidy is payable