Since April 2013 the government has imposed a maximum limit on the total amount paid for welfare benefits for people below pension age. The cap is applicable to unemployed claimants receiving: job seeker's allowance, income support, and employment and support allowance. It also includes housing benefit (unless you reside in supported housing); child benefit, child tax credits, maternity benefits, severe disablement allowance, carer's allowance, guardian allowance, and widow's benefits.
The maximum limits mean:
In April 2013, councils introduced a regulation for housing benefit which is applicable to housing association and council tenants. This allows the council to apply a 'bedroom tax' if they think that the home is larger than necessary for the tenant's basic requirements. Basically, if you have one or more spare rooms, this regulation is applied and the housing benefit entitlement will be automatically reduced under the 'bedroom tax' or 'under-occupancy rule'. This will mean that if you want to continue living in the property, you will have to pay the shortfall in the rent yourself.
The eligible rent for the accommodation will be reduced by a fixed percentage as follows:
Since April 2013, full council tax benefit has been subject to a reduction, and the entire bill is no longer paid. The amount you can receive is calculated according to council regulations. This will mean that you will be liable for any shortfall.
The effects of the cuts in benefits may mean that you may fall behind in your rent and face eviction. It is your responsibility to pay the full rent on the due day, so if you run into difficulties it is very important to seek help right away, and ensure that you are in receipt of all the benefits that you are eligible to claim. It may be possible for you to budget and cut back on some of your outgoings, but if this is not feasible and there are suitable properties in your area, then you may have to look for a smaller home that will be less expensive to live in. You could contact the Citizen's Advice Bureau or a welfare and benefits adviser for further help in these matters.