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Housing cost interactions
I have two queries:
1) If I am working and liable to pay a mortgage, on the one hand I can get no housing costs help in my UC, but by the same token I assume I will be eligible for the higher earnings disregard. What is the philosophy that gets us to this place, in comparison to rent payers?
2) If I am a rent payer and a worker, will I nevertheless be able to enter ‘nil’ for my UC housing costs in order to get the higher earnings disregard (assuming that was advantageous)?
Any comments welcome!
Steve
I have two queries:
1) If I am working and liable to pay a mortgage, on the one hand I can get no housing costs help in my UC, but by the same token I assume I will be eligible for the higher earnings disregard. What is the philosophy that gets us to this place, in comparison to rent payers?
Any comments welcome!Steve
Philosophy behind it ...?
Maybe Ministers hope to undermine any redistributive effect that the benefits system might have by ensuring that the wealthiest (e.g. owner occupiers who’ve paid off their mortgages) get the most benefit?
Re point (2), who knows? It would be perverse not to allow claimants the “better buy” ; not exactly simplication is it?
2 seems like fraud to me. Weird fraud but still putting something that itsn’t true to get more money.
If you don’t provide the info (rather than writing ’ nil’) it looks like the SSWP will assume you have no housing costs - see reg 39 (4) of the UC etc DMA regs. It is modelled on the bit in the current DMA regs which allow IS decisions without housing costs where someone does not send back to MI12.
Reg 22(2)(a) of the draft UC Regs says
“The amount of the work allowance is—
(a)if the award contains no amount for the housing costs element, the applicable amount of the higher work allowance specified in the table below; and
(b)if the award does contain an amount for the housing costs element, the applicable amount of the lower work allowance specified in that table”.
Note the word ‘contains’. That is not the same as ‘I have housing costs, whether or not they have been entered in the claim’ (which appears to be the other way of looking at it). Seems to me it is up to the claimant what the claim ‘contains’.
The difference between lower and higher work allowances can be considerable. For joint claimants with a child, it is the difference between £222 and £536. Thats £314 that could be shielded from the 65% taper, which would prevent a taper loss of £204pm. For a lone parent, it is a potential £471pm that could be shielded, which prevents a taper loss of £306pm
If your housing costs are lower, there would seem to a potential gain. Does seem too could to be true though. I do hope I am not barking up the wrong tree.
I don’t think it would work unfortunately.
Section 11 of the Act states “The calculation of an award of universal credit is to include an amount in respect of any liability of a claimant to make payments in respect of the accommodation they occupy as their home”. That’s mandatory and so an award will contain an amount for housing costs if the person has liability to make payments in respect of a dwelling.
If the person says nil housing costs, they are potentially making a misrepresentation and if they get excess benefit as a result, (which is likely given the difference in earnings disregards is the reason they would be inclined to say nil housing costs) they could be facing an overpayment and presumably the new £50 fine as well!
Point taken - thanks.
sounds discriminatory somehow
Have there been any bright ideas yet regarding the shared ownership anomaly?
There are a couple of anomalies for shared owners / shared equity. I’m just finishing off a piece for my blog. No bright ideas unfortunately.
I’ve posted a piece on shared ownership on my blog at http://blog.cix.co.uk/gmorgan which is slightly embarassing as I’ve been making some wrong assumptions. On the other hand there’s quite enough meat to be interesting I think.
Another query in respect of this - and apologies if you have addressed this in your blog Gareth - but would bedroom tax also be an issue in shared ownership cases if there were more bedrooms than what was deemed necessary??
Ah just checked your blog Gareth - and it answered my query - thanks ! :)
No, shared-owners are exempt from the bedroom tax.
Taking an oddity I mentioned on my blog.
A single parent paying £15 a week rental element could be better off under Universal Credit by about £55 a week if they take in a non-dependant.
What’s the penalty for pretending you’ve got a non-dependant so that the DWP would apply a HCC, reducing your Universal Credit needs amount but making you better off?