Housing Benefit and Council Tax Benefit Circular. For information

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1 Housing Benefit and Council Tax Benefit Circular Department for Work and Pensions The Adelphi, 1-11 John Adam Street, London WC2N 6HT HB/CTB A8/2007 ADJUDICATION AND OPERATIONS CIRCULAR WHO SHOULD READ All Housing Benefit (HB) and Council Tax Benefit (CTB) staff ACTION SUBJECT For information The Housing Benefit (Amendment) Regulations 2007 Work Search Premium for Working Tax Credit Partners project Guidance Manual The information in this circular does affect the HB/CTB Guidance Manual. Please annotate the number of this circular against A3.282, A4.130, A4.260, A4.280, A4.1260, A4.1720, A Queries If you want extra copies of this circular/copies of previous circulars, they can be found on the website at have any queries about the distribution of this circular, contact Corporate Document Services Ltd Orderline Tel: Fax: Crown Copyright 2007 Recipients may freely reproduce this circular.

2 Contents para The Housing Benefit (Amendment) Regulations 2007 Introduction... 1 Shared ownership leases... 2 Previously leaseholder... 7 Partner is owner week protection Time limit for redetermination Queries Work Search Premium for Working Tax Credit Partners project Queries... 21

3 The Housing Benefit (Amendment) Regulations 2007 Introduction 1 Statutory Instrument 2007 No was laid in Parliament on 3 May 2007 and comes into force from 1 October It introduces a number of changes included in the 2006 Budget announcement which allow help with rent on a shared ownership lease/tenancy with a private sector provider provide consistency of treatment in a number of areas Shared ownership leases 2 The definitions of shared ownership tenancy in HB Regulation 2 and HB (SPC) Regulation 2 will be amended to better align with the definition of a shared ownership lease in the Housing Act 1985 as it relates to England and Wales. 3 HB Regulation 12(2)(a) and HB(SPC) Regulation 12(2)(a) will be amended to enable Housing Benefit (HB) to help with the rental element of a shared ownership lease or tenancy when this is granted by an organisation other than a housing association or housing authority, which are provided for already. This will enable HB to help with the rental element of private sector shared ownership leases. 4 Corresponding changes to Schedule 2 of the HB and HB (SPC) Regulations will exclude all shared ownership tenancies from referral to the rent officer. Apart from a handful of known cases, private sector shared ownership tenancies should come on line after the rollout of the Local Housing Allowance (LHA) in April 2008 from which these tenancies will not be exempt. 5 While the Welsh Assembly and the Scottish Executive have no immediate plans to extend the use of shared ownership, Communities and Local Government (CLG) envisage greater diversity in England of the shared ownership sector in the future, with greater involvement of private sector landlords. At the point of entry for all new shared ownership leases the home buyer will need to demonstrate the financial capacity to meet the mortgage and rental liabilities. 6 HB is only expected to support those who subsequently face a change in circumstances that necessitates a claim for benefit. The Housing Corporation will make funds available and have rents set through contract with the provider on a similar basis to that with Registered Social Landlords.

4 Previously leaseholder 7 Since January 1999 a person who had once owned the dwelling they now rent, although liable to pay rent, is treated as not liable to pay rent for HB purposes if they sold the dwelling less than five years before and did not need to sell it to remain living in it. This exclusion from benefit reflects one of those situations where abuse of HB had previously been common. 8 A Social Security Commissioner had decided that what is meant in the provision by owned should be determined by the definition of owner which only applies to freeholders. It had been assumed that leaseholders were covered by this provision. 9 HB Regulation 9(1)(ha) and HB (SPC) Regulation 9(1)(ha) will ensure that a former leaseholder who had once owned the dwelling they now rent through holding a long tenancy on it, although liable to pay rent, is treated as not liable to pay rent for HB purposes if they sold the dwelling by relinquishing the long tenancy less than five years before, and did not need to sell it to remain living in it 10 This change will provide for consistency of treatment between long leaseholders and freeholders who previously owned the home they now rent. Partner is owner 11 HB Regulation 12(2) and HB (SPC) Regulation 12(2) will be amended to exclude from HB payments in respect of a dwelling when the claimant s partner is the owner of that dwelling. 12 This is a consistency measure as the provision only presently applies when the claimant owns the home. This was highlighted by an appeal tribunal chairman who commented that it appeared inconsistent that the exclusion from entitlement to benefit in respect of owners did not apply where the claimant s partner owned the dwelling that a couple lived in as their home. 13 The relevant legislation prevents double provision as help is available with an owner s housing costs through Income Support (IS), Jobseeker s Allowance (JSA) or State Pension Credit. 13 week protection 14 To remove a potential area of abuse, HB Regulation 13(15) and HB (SPC) Regulation 13(15) will be amended to take account of a partner s previous award of benefit, when deciding if the 13 week protection applies.

5 15 Currently if a claimant or prescribed individual was able to afford the rent when the liability was taken on and the claimant has not received HB in the previous 52 weeks, the 13 week protection would apply and there is no restriction on their rent for the first 13 weeks of their award. If the claimant s partner had claimed HB in those previous 52 weeks, then the 13 week protection would still apply. This means that it is sometimes advantageous for the claimant and partner to swap roles. 16 Following the change, the 13 week protection will apply when the claimant is a member of a couple and the rent was affordable when the liability was taken on, and claimant and partner have not received HB in the previous 52 weeks Time limit for redetermination 17 The appeals process for HB changed from 2 July 2001 and included changing the time within which an appeal had to be made from six weeks to one calendar month. However, there remained a six week deadline in the regulations covering situations where the claimant wishes to seek a redetermination of a decision by the Rent Officer. 18 HB Regulation 16(1)(c) and HB (SPC) Regulation 16(1)(c) will be amended to align the time limit for seeking a redetermination of a decision by the Rent Officer with that for making an appeal, from six weeks to one month. The change will create consistency in the timescales for making an appeal and requesting a redetermination. Queries 19 If you have any queries about the technical content of this subject, contact Dave Jones Tel: dave.jones@dwp.gsi.gov.uk

6 Work Search Premium for Working Tax Credit Partners project 20 Please note that the Work Search premium for Working Tax Credit (WTC) Partners project was formally closed to new customers from 30 April Queries 21 If you have any queries about the Work Search Premium for WTC Partners project, contact Gordon Calvert Tel: