Already getting Housing Benefit?
Someone who is currently in receipt of Housing Benefit should report the change in their circumstances to the HB Office who will re-assess their entitlement.
How should the HB Office assess entitlement when someone receives a furlough payment?
Payments under the Job Retention Scheme (furloughed payments) are treated as earnings.LA Direct Bulletin 4/2020
'No changes to HB regulations are required as CSJR enables employers to continue to make payments to their employees of taxable earned income, which continue to be treated as earned income in HB. This continues to be based on the number of hours the employee normally works, which enables the additional earnings disregard in HB to remain applicable
Where the claimant has received confirmation from their employer that they will receive a wage based on being furloughed, then the HB Office can estimate what this is and reassess the claimant's HB entitlement appropriately. Once the claimant has received their wages, as long as the amount is not too different from the one that the HB Office used, the HB Office do not need to review the HB paid - ie they do not need to re-assess the past period and create an overpayment. They can just review their estimated earnings figure going forward.
What if wages are currently nil?
Where the claimant's wages have dropped to nil and it is unclear whether they will receive any future wages, then the HB Office can reassess the claimant's HB award using a estimate of nil wages.
If it turns out that the claimant's employer is able to pay some wages for a past period, then the claimant should notify the HB Office who will review the HB paid and create an overpayment as well as reviewing their estimated earnings figure going forward.
What about the 16/30 hour earnings disregard?
This will be applied where the claimant is still in receipt of Working Tax Credit and that award continues to include the 30 hour element.
If the claimant is not getting the 30 hour element in their WTC award, then whether they are entitled to the 16/30 hour additional disregard in their HB award will depend on whether they are working 16 or more 'remunerative' hours a week.
If they have been furloughed then their furlough hours are treated as holiday and are therefore classed as 'remunerative',
If they have not been furloughed, then it will depend on the hours they are now working.
What if they are awaiting an increase in their Tax Credit award?
Where a claimant is in receipt of Housing Benefit, any payment of Tax Credit arrears should be treated as capital and not as income.
HB Circular A7/2020
confirmed this where Tax Credit claimant are waiting for the increased £20 a week announced by the government - but this rule applies to all Tax Credit arrears payments:
'This means that in cases where HB claims do not see the increased rate of the additional earnings disregard and increased rate to the basic element of WTC applied to individual claims within the same benefit week, overpayments are not created.'
Could they be better off on Universal Credit?
Perhaps. Someone whose earnings have dropped may now be better off if they claim Universal Credit if eligible – they should seek advice from a Benefits Adviser, who will be able to conduct a better off calculation.
NOTE: Some claimants - ie those protected by the ‘SDP Gateway (NOTE: the SDP Gateway no longer applies - it was revoked from 27th January 2021)’ - may be able to make a new claim for Income-Related ESA or Income-Based Jobseekers Allowance.
If they are not already receiving Council Tax Support they should notify the Local Authority that they would like to claim as soon as possible.
If they have school age children they may now be entitled to free school meals.
Not currently getting any means-tested benefits?
They will not be able to make a new claim for Housing Benefit unless they are fall into one of the special groups who can - click here. As long as they meet the general eligibility criteria for UC then they can make a claim for it - click here..