Welfare Reform Act (Northern Ireland) 2007

Welfare Reform Act (Northern Ireland) 2007

2007 CHAPTER 2

Commentary on Sections

PART 2: Housing benefit

Section 30: Local housing allowance

Section 30 provides for powers for a new way of calculating maximum housing benefit, known as local housing allowance, across the private rented sector.

The main secondary legislation dealing with housing benefit (referred to as “the housing benefit rules”) is contained in the Housing Benefit Regulations and the Housing Benefit (SPC) Regulations.

Under the current housing benefit rules for claimants in the private rented sector, the maximum amount of benefit that can be paid is the “appropriate maximum housing benefit”, subject to reductions to take account of income. The appropriate maximum housing benefit is the weekly amount of rent eligible to be met by housing benefit, less deductions made in relation to non-dependants. The eligible rent is determined by establishing whether the rent charged is considered appropriate for the particular area, property and the claimant’s particular needs. The Housing Executive decides whether rents are appropriate for the particular area or property and the claimant’s particular needs using a system of “rent restrictions”. Any charges included within the rent that are ineligible for housing benefit purposes, such as for the costs of fuel Acts or meals, must also be deducted.

The local housing allowance replaces the existing rent restrictions by providing a new way to determine the maximum amount of housing benefit payable. Non-dependant deductions and reductions to take account of higher incomes will still apply. Any given claimant would be eligible, as a maximum, to the local housing allowance rate that applies according to the number and mix of occupiers, and the area in which the claimant lives. The detailed rules on how the local housing allowance is set will be in regulations, as is the case under the current housing benefit rules.

Section 30 provides for powers that are more specifically appropriate for the local housing allowance approach to the determination of a claimant’s maximum housing benefit.

Subsection (1) removes section 129(4) of the Contributions and Benefits Act, which requires regulations to be made setting out how a claimant’s appropriate maximum housing benefit should be determined in any case. This provision will be replaced by a new section 129A(2).

Subsection (2) inserts the new section 129A into the Contributions and Benefits Act which provides for the determination of a claimant’s appropriate maximum housing benefit and enables regulations to provide that claimants may have their appropriate maximum housing benefit calculated by reference to Housing Executive determinations. These could be property specific determinations as now, or the generic determinations required under the local housing allowance, which apply to properties of a certain size in a particular area.

Section 129A(4) introduces an additional “treat as liable” power solely for the purpose of calculating the appropriate maximum housing benefit. This provides a more specifically appropriate power centred on the local housing allowance approach, providing for a claimant’s housing benefit to exceed his rent liability if the appropriate local housing allowance is higher than his actual rent liability. Equivalent provision is made by subsection (5) for claimants who are “treated” as having a rent liability under regulations made under section 133(2)(j) of the Contributions and Benefits Act (e.g. because it is their partner who has the actual liability). This provides for their housing benefit to exceed their deemed liability, if the appropriate local housing allowance is higher than their deemed liability.

Section 30(3) provides for a power to prescribe when the Housing Executive must review a housing benefit award. This allows for the Housing Executive to apply a new local housing allowance rate each year to ensure that a claimant’s award is updated.