Housing Benefit and Universal Credit

Most working age people living in the Milton Keynes area cannot make a new claim for housing benefit. Instead, they will claim housing costs with their Universal Credit.

Existing benefit claimants:

If you are already claiming any benefits you don’t need to do anything. You’ll be told when Universal Credit will affect you. However, if your situation changes and this results in your benefits changing you may need to claim Universal Credit.

More information about Universal Credit, who can claim and how to claim can be found on the GOV.UK website 

Council Tax Reduction and Universal Credit

There are special rules for people who are receiving Universal Credit.

People wishing to apply for a council tax reduction can apply at the same time as they claim Universal Credit. There is a question on the Universal Credit application form, which asks if you wish to apply for help with your council tax. If you are liable for council tax at your address (i.e. the person who is named on the bill) you should answer yes. The Department for Work & Pensions (DWP) will then tell us if you are entitled to Universal Credit and give us the details of your income.

  • If you are entitled to Universal Credit and a council tax reduction, the DWP will tell us automatically every time your income changes. We will then work out if your council tax reduction needs to change. If it does, you will get new council tax bill. 
  • If you are entitled to Universal Credit but in any month, you are not entitled to a council tax reduction, for example because your earnings are higher than usual or you have capital over £6,000, the DWP will stop giving us any information about you and your circumstances. This means that we will not automatically know if your wages go down, your capital reduces below £6,000 or your family gets larger and unless you tell us yourself, you may miss out on any further help through a Council Tax Reduction.

Non-dependants

If you have non-dependants living with you, you must provide proof of their income to the council tax reduction section. If this is not provided, a high non dependant deduction may be applied to your claim.

Change of address

If you are already on Universal Credit and move home, you should complete a change of address form straight away. This can be found on the benefit’s main webpage. Information when you move, is not always shared immediately between the Department for Work and Pensions (DWP) and the Council.

The Universal Credit information the DWP provide us with is used to work out any council tax reduction. We compare the amount the DWP say the person/family needs to live on (maximum Universal Credit amount) to the person/family’s total income.

If you have over £6,000 in capital you will not be entitled to a reduction.

For example;

A single person who has no children, and pays a rent of £300 a month, maximum Universal Credit amount for the month is worked out to be

  • Standard allowance of £344.00
  • Housing element of  £300

Total maximum Universal Credit amount of £644.00 a month.

They are working and earning £300 a month. This reduces their actual Universal Credit entitlement to £455.00 a month.

Their total income is therefore £755.00 a month (£300 earnings plus £455.00 Universal Credit), which is £111 more than the maximum Universal Credit amount of £644.00 in this case.

£111 X £0.20 = £22.20. This is how much extra they need to pay in council tax each month. This amount is on top of the 20% that most working age people must pay as a minimum.

If their council tax bill is £100 a month, they would have to pay a minimum of £20 a month (the 20% minimum payment) plus, in the above example, an extra £22.20 because of their income. i.e. the bill would be reduced to £42.20 a month.