Housing Systems: Combating poverty and sustaining tenancies.

Coronavirus: Housing Benefit - Self-Employed
Housing Benefit - Self-Employed
Already getting Housing Benefit?

Someone who is currently in receipt of Housing Benefit should report any change in their circumstances (eg. a drop in self-employed earnings) to the HB Office. Their HB entitlement should be reassessed following a relevant change.

The income figure used by the HB Office is always an estimate of future earnings based on past income. The HB Office can use whatever period of time they think is most suitable as long as this does not exceed 12 months. They can also review this estimate - as long as it is reasonable to do so.

So where someone's self-employed income has dropped and is likely to be low for a while, then the HB Office may agree to review their HB award to use a lower income figure.

If they decide to close their business permanently, then they should let the HB Office know (as well as HMRC and their accountant!). HB can then be re-assessed on any other assessable income they have.

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 hours a week.

(Until 30 September 2021, Coronavirus easements meant that self-employed people who were working reduced hours or temporarily not working, were treated as though they were still working their normal hours as long as they were still trading).

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.

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. And where they are going to recieve a payment from the SEISS them timing could be crucial - click here for more information.

Benefit Cap

If they are going to stay on HB, and their total 'welfare' is higher than their Benefit Cap limit, then make sure the Benefit Cap is not applied straight away if they are entitled to the 'grace period'.

The grace period applies where the claimant or their partner has been in paid work for 50 out of the previous 52 weeks.

In these cases the Benefit Cap should not be applied until after the 9 month grace period. (Note that some claimants are exempt from the Benefit Cap anyway, due to receiving certain other benefits).

Other Help

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 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.

HB and the SEISS

How were payments from the Self-Employed Income Support Scheme (SEISS) treated?

They were treated as earnings, so formed part of the claimant's self-employed income, and could be offset by allowable expenses.
This was confirmed in LA Direct 04/2020
'No changes to HB regulations are required as the SEISS grant remains a payment of taxable income received from self-employment. The SEISS payment is part of the self-employed income assessment for the tax year in which it is received.'

The Housing Benefit Regulations have not been amended to cater for this grant, as confirmed in the DWP bulletin above.

That bulletin says SEISS payments are counted as earnings for the tax year in which they are received, but this does not necessarily mean that they will be spread over the entire tax year. The HB Regulations are very flexible and while one could make a case for taking the income into account over a whole year the payment could also justifiably be spread over three months. 
All that the Regulations require is that the HB Office estimate the claimant's earnings by reference to an "assessment period" of no more than one year. Some councils will estimate this financial year's income for calculating HB based on last financial year's income and expenses. So any SEISS grant received in the previous financial year could affect the claimant's current HB award.
Other HB Offices have taken it into account over three months starting from when it was received. 
It is difficult to say that either of those approaches is wrong.  There does seem to be solid consensus that it would be incorrect to backdate the income over the three months for which it is notionally being paid - very few if any HB Offices will take it into account retrospectively, as any changes to self-employed earnings are always picked up prospectively.