Smooth transition

If you are unemployed or sick, one of the biggest barriers to getting a job is worry about your housing costs. Housing benefit is withdrawn at the rate of 65p for every £1 that a person earns above income support levels – apart from a small “disregard” of between £5 and £20 per week. So any help with housing costs to help with the transition to work has to be welcomed.

Yet research published by the Department for Work and Pensions last year shows that many claimants are unaware of a scheme called extended payments. These are payments of full housing and council tax benefit made for the first four weeks of a claimant starting work or increasing their hours or earnings and therefore losing their income support or income-based jobseekers’ allowance.

Extended payments are made irrespective of wages in the new job. To be eligible the claimant must be:

  • receiving income support or income-based jobseekers’ allowance which ends because they or their partner start work or increase their hours of work to at least 16 hours per week – 24 hours for a partner – or increase their earnings by enough to take them off income support/income-based jobseekers’ allowance; and
  • getting benefits for at least 26 weeks immediately before the date income support or income-based jobseekers’ allowance entitlement ends; or
  • getting income support or income-based jobseekers’ allowance as a lone parent, as a carer, through a government training scheme or through being classed as incapable of work.

From April 2004, the extended-payment scheme is being amended to include people coming off incapacity benefit or severe disablement allowance.

The new job or increase in hours or earnings must be expected to last for at least five weeks. Claimants must notify the Jobcentre Plus office or the council that they meet the above rules. The notification can be made in writing, electronically, verbally or by a telephone call. There is no form.

If the claimant’s liability to pay rent or council tax stops during the extended payment period, payments stop. But if they move to somewhere else where rent and council tax are due, they take the four-week payment with them.

There are special rules for lone parents. A lone parent will get a lone parent run-on of income support for two weeks if they start work for, or increase their hours to, at least 16 hours a week and the work is expected to last for at least five weeks. During the period of the run-on, the lone parent is entitled to maximum housing benefit and council tax benefit anyway.

A lone parent receiving the lone parent run-on could then become eligible for an extended payment of housing benefit and council tax benefit as well for a further two weeks. However, the lone parent run-on scheme is to end from 25 October.

The claimant in any extended payment claim should get the same rate of housing benefit and council tax benefit as they were getting when income support or income-based jobseekers’ allowance ended. During the extended payment period, no account is taken of changes in income or capital, wages received, the arrival or leaving of a non-dependant, annual uprating, or rent or council tax increases or reductions.

Gary Vaux is head of money advice, Hertfordshire Council. He is unable to answer queries by post or telephone. If you have a question to be answered please write to him c/o Community Care.

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