Welfare Rights: More parents to receive help with their rent and council tax from November 2009

Extra help is at hand for lower income families thanks to changes to housing and council tax benefits. Gary Vaux considers who will be affected

From November 2009, more than 200,000 families will gain extra help with their rent and council tax because of changes that are being made to the housing and council tax benefit scheme. In addition, there will be many families who have missed out on help in the past – because their income was just too high to qualify – who will now get extra assistance.

The change concerns the treatment of child benefit. Until November 2009, child benefit counts as income when housing benefit (HB) and council tax benefit (CTB) is calculated. Given that child benefit for one child is currently £20 a week for the oldest child (and £13.20 for the others), that extra income means that even a parent with one child would have their housing benefit cut by £13 and their council tax benefit cut by £4. For families with more than one child, the impact of extra child benefit is even greater, as effectively 85% of the value of the child benefit is “lost” by reductions in housing and council tax benefit.

Immediate gains

From 2 November 2009, that reduction will no longer apply. Child benefit will be ignored as a source of income when housing and council tax benefit are calculated. This will help tenants and some homeowners who have children and receive help with rent and council tax already. The DWP estimates is that about 200,000 households stand to gain immediately. In addition, many families who have just missed out on HB and CTB in the past may now qualify for help – we don’t know how many that will be.

Unfortunately, the DWP has announced that it has “no plans to run a specific take-up exercise or additional publicity alongside the introduction of the full disregard of child benefit”. Given the government’s commitment to combating child poverty, and its welfare reform goal to make employment more attractive than being on benefits, this is somewhat surprising. It could be down to local publicity campaigns to get the news across – especially to those who may be newly eligible. Social workers, children centre staff and anyone in contact with low-income families need to be aware of this change.

The new measures will help lower-income working families in particular, as well as those parents on benefits such as widowed parents allowance, contribution-based jobseekers allowance or ESA, or incapacity benefit who are not receiving income support or other means-tested help. Those families on income support etc are already getting maximum housing benefit, so there is no gain for them from the new system.

Recalculated automatically

Existing claimants shouldn’t have to do anything – their benefit should be recalculated automatically from 2 November. But those who are now likely to qualify for HB and CTB will need to be identified and encouraged to make a claim.

For example, Jayne is 35, has two children and works 25 hours per week for £270. Her rent is £90 a week and her council tax is £20 a week (after the 25% discount for being a single adult). She receives just £4 a week towards her rent and no help with her council tax. From November, she will automatically gain £25.55 housing benefit and will even receive a small amount of council tax benefit.

Her friends Greg and Lisa are in a similar position, with just one wage coming in since Greg lost his job. Lisa earns £400 a week and they have two kids and the same housing costs as Jayne. At present, they don’t get any help at all (apart from some tax credits) but from November, they’ll receive £15.35 a week towards their rent – so long as they know to claim.

Gary Vaux is head of money advice, Hertfordshire Council. You can e-mail a question to him

This article is published in the 10 September 2009 edition of Community Care under the headline “Why some clients might soon be a little bit better off”