The Income-related Benefits (Subsidy to Authorities) Amendment Order 2004

Explanatory Note

(This note is not part of the Order)

This Order is made in consequence of the amendments made by the Local Government Act 2003 extending the provisions in sections 140A to 140G of the Social Security Administration Act 1992 concerning housing benefit subsidy to include subsidy in respect of rent rebates in England and Wales in respect of dwellings within authorities' Housing Revenue Accounts. The Order amends the Income-related Benefits (Subsidy to Authorities) Order 1998 (“the 1998 Order”), which makes provision about claims for and calculation and payment of subsidy, so as to make provision about subsidy in respect of those rent rebates.

Article 2 introduces the Schedule to the Order which contains detailed amendments of the 1998 Order.

Paragraph 2 of the Schedule amends article 4 of the 1998 Order so as to require that authorities in England make base data returns to the Secretary of State by 31st August in the year before the relevant year (that is, the year in which the rent rebate subsidy in question will be paid) giving information relating to the subsidy, and provide that authorities in Wales may be asked to give such information by the Secretary of State or the National Assembly for Wales.

Paragraph 3 of the Schedule amends article 6 of the 1998 Order so as to require that an audited copy of the base data return is sent to the Secretary of State by 10th October in the year before the relevant year.

Paragraph 4 of the Schedule amends the definition of “rebate” in article 11(1) of the 1998 Order so as to remove the words that exclude Housing Revenue Account rebates by local authorities in England and Wales, and so extends all the existing provisions of the 1998 Order that apply to rebates to those rebates.

Paragraph 5 of the Schedule amends article 13(1) of the 1998 Order, which provides for the amount of the subsidy, so that the amount specified there is subject to any deductions applicable under a new article, article 20A, that is inserted by paragraph 6 of the Schedule. Article 20A makes provision for deductions from rent rebate subsidy to be made in accordance with a new Schedule to the Order, Schedule 4A, that is inserted by paragraph 7.

Schedule 4A contains 5 Parts. Part 1 contains provisions about interpretation of expressions used in the Schedule and applies to the whole Schedule. Parts 2 and 3 of the Schedule only apply to local authorities in England and Parts 4 and 5 only apply to authorities in Wales.

Paragraph 2 of Schedule 4A deals with when a deduction may be made from the subsidy payable to authorities in England. It provides that the weekly rent limit for a dwelling for the authority must be less than the subsidy limitation rent. The weekly rent limits for those authorities which have dwellings within their Housing Revenue Accounts are specified for each year in a Table in Part 3 of the Schedule. Paragraph 2 of Schedule 4A explains how the subsidy limitation rent is calculated. Paragraph 3 of Schedule 4A sets out how the amount of the deduction is to be calculated.

In the case of authorities in Wales, paragraph 4 of Schedule 4A sets out a formula for determining if a deduction is to made from the subsidy payable to an authority. A deduction is made if the sum of two amounts that are specified as respects the authority in the Table in Part 5 of Schedule 4A is less than the average amount of rent for a dwelling of the authority. Paragraph 5 of Schedule 4A sets out how the amount of the deduction is to be calculated.

A full regulatory impact assessment has not been produced for this instrument as it has no impact on the costs of business.