Does housing benefit via pension credit cover my full rent?

I am a single pensioner who receives the Guarantee Credit component of Pension Credit.

But my rent allowance only covers £85 per week of my weekly rent which is £129 per week. Why is this?

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Steve Webb replies: While having retirement credit can often be a “passport” to a range of other benefits, such as assistance with rent, council tax and fuel bills, there are several reasons why your housing allowance may still be short of your entire rent.

Whether you rent from a social landlord (such as a municipality or housing association) or a private landlord, a reason for a shortage may be that you have ‘non-dependent’ adults living with you. This could be, for example, an adult son or daughter.

The government will then deduct an amount from your rent allowance, assuming that this other person can be expected to contribute to the rent.

The amount of the deduction depends on the circumstances of the non-dependent and is made regardless of whether or not they actually pay a rent contribution.

The amount that is written off can be very significant. Also if the non-dependent is a young person on benefits, the deduction will be £18.10 per week in 2023/24.

At the other end of the scale, if the non-dependent has a gross income of more than £511 per week, they will be deemed to contribute £116.75 per week towards your rent, which will be deducted from your rent allowance.

For those renting from a private landlord (as you told me is true for you), there are even more reasons why housing benefit may not cover your entire rent.

The first is that the ‘local rent allowance’ (LHA) scheme (the name given to rent allowance for private tenants) is not based on the actual rent you pay, but on the type of housing you are deemed to need. There are two elements here.

First of all, the rates of the local rent allowance are determined on the basis of the ‘needs’ of your bedroom.

For example, a married couple would get a bedroom and teenage children of the opposite sex would each get a bedroom, but younger children might be expected to share a bedroom.

The amount of your rent allowance therefore depends on your family size and composition, regardless of the actual rent you pay. If your rent reflects a ‘spare’ bedroom, this may result in a gap between the standard benefit rate and your actual rent.

But you told me that you live in a one-bedroom house, so you don’t have a spare room, and no one lives with you either, so there’s no deduction for a “non-dependent.”

The other major reason people can be short is that the benefit system is explicitly designed only to cover rents at the lower end of the rental market.

The cabinet believes that benefit recipients should not be allowed to live in the ‘best neighborhoods of the city’, paid for by the taxpayer, while people with low-paid work (for example) may not be able to afford it. So.

The exact rate to be paid has varied over time, but roughly speaking, the idea is that in the area where you live and surrounding areas, the LHA limit would only cover the full rent of about 1 in 3 properties (or less ).

An important point is that when they look at local rent levels, they’re not necessarily looking just at the city you live in, but at a larger area known as a “broad rental market area” in the jargon.

This means that there may be few, if any, available homes near where you live where the standard benefit rate would fully cover the rent, but in principle there should be some such homes in a much wider area.

You have told me where you live and I have confirmed that in your broad rental market area the standard rate for a one bedroom property is indeed £85 per week which is what you will get even if it is well below your actual rent.

If you’re struggling to make ends meet because of the shortfall between your benefits and your actual rent, I’m afraid your options are limited.

You can apply for a ‘discretionary’ rent allowance from the council to supplement your benefit, but this is generally only granted in exceptional circumstances (for example, if you have some short-term need or hardship) and it is unlikely that the shortfall will become permanent. covered .

Another option is to see if you can find a home in the wider area with a lower rent. If you could find a one bed property at a rental cost of (say) £120 a week or £110 a week you should still be eligible for £85 a week in benefits so this would reduce the shortfall that you need to catch up on your pension credit.