Housing costs rules revisited
Simon Osborne describes the latest version of the rules relating to the 13-week waiting period for housing costs.
The rules relating to the 13-week waiting period for housing costs in income-related employment and support allowance, income support and income-based jobseeker's allowance have been significantly amended with effect from 5 January 2010. The changes were brought in by The Social Security (Housing Costs Special Arrangements) (Amendment) Regulations 2009,1referred to here as the 'new rules'. The official intent2is to rectify a defect in the original rules, introduced on 5 January 2009 by The Social Security (Housing Costs Special Arrangement) (Amendment and Modification) Regulations 2008,3referred to here as the 'original rules' (for a description of those, see Bulletin 208, p. 11).
The defect, as many advisers will be aware, was that the original rules did not permit application of the 13-week waiting period to claimants not actually entitled to benefit during the waiting period due to excess income (i.e. those who not entitled unless and until housing costs were included in their applicable amount). The 26 week or 39 week waiting period would continue to apply to such claimants. The amending rules do correct that defect, but (inevitably, it seems) create new complexities and adverse effects.
The new rules - overview
The new rules remove, from 5 January 2010, the need for a claimant to be actually entitled to a 'relevant benefit' during the waiting period for the 13-week waiting period to apply. The definition of 'relevant benefit' is not changed from the original rules, and continues to mean employment and support allowance (ESA, either contributory or income-related), income support (IS) or jobseeker's allowance (JSA, either contribution-based or income-based). Also as before, along with the 13-week waiting period comes an increase in the capital limit for eligible loans from £100,000 to £200,000, and a 104 week limit on housing costs paid with JSA.
The new rules also provide that claimants who reclaim a relevant benefit or move from one relevant to another (e.g., from IS to JSA) will no longer be entitled to the 13-week waiting period (or the £200,000 upper limit on loans). Exceptions to this apply if they previously came under the old rules by virtue of actually being entitled to a relevant benefit whilst in a waiting period on 4 January 2009, or came under these new rules (i.e., as in force from 5 January 2010), or have had a break such that the claims cannot be linked under the housing costs linking rules. The DWP cite as an example of those no longer covered, lone parents no longer entitled to IS due to the age of their youngest child who move to JSA, for whom the policy intention (apparently) never was that they should be able to access the more generous rules. Similarly, it is now not possible to make a repeat claim for JSA and start a new 104 week period of entitlement to housing costs unless there is a break in claim that is not covered by the housing costs linking rules.
The new rules operate by replacing the principal rule on when the 13-week waiting period applies, i.e. to anyone who 'claims a relevant benefit after 4th January 2009', but they do not have effect for any period before 5 January 2010. Broadly speaking, this ensures, as the DWP says, that the new rules are not of retrospective effect. Some people who lost out under the original rules may still benefit from them, e.g., because they are still serving a longer waiting period, or have completed that but would gain from the £200,000 limit, and (in any case) can satisfy the new rules, as set out below. Those who lost out but cannot now benefit from the new rules may get some help in the form of an extra-statutory compensation scheme, the details of which were still being worked out as this article was written.4
The new rules - detail
From 5 January 2010, the 13-week waiting period applies to claims for IS, JSA (contribution-based or income-based) or ESA (contributory or income-related) made after 4 January 2009, where at least one of the following conditions applies:5
- the 13-week waiting period has already applied, either because the claimant was actually entitled to IS, JSA or ESA (i.e., they had an award of benefit) on 4 January 2009 and were still in a 26 week or 39 week waiting period, or because they claimed after 4 January 2009 and the 13-week waiting period has already applied to them under any of the other new rules described below; or
- neither the claimant nor their partner has actually been entitled to IS, JSA or ESA before, neither of them was getting pension credit before the claim, and the claimant is not treated as getting the benefit s/he has claimed in a period back to before 5 January 2009 under the housing cost linking rules (see CPAG's Welfare Benefits and Tax Credits Handbook, p. 836); or
- the claimant was not getting IS, JSA or ESA immediately before the claim, neither the claimant or their partner was getting pension credit before the claim, and although either of them was getting IS, JSA or ESA at some point before, the claimant is not treated as getting IS, JSA or ESA for the period between that time and the new claim under the housing cost linking rules; or
- either the claimant or their partner was getting pension credit before the claim, but that did not include help with housing costs in the 12 weeks or less (26 weeks or less in some cases) before becoming entitled to IS, income-based JSA or income-related ESA in the circumstances described on page 823 of the Welfare Benefits and Tax Credits Handbook.
The new rules - in practice
The DWP has issued guidance on the operation of the new rules.6That makes clear that for those who lost out under the original rules and would benefit from the new rules, they cannot be applied retrospectively so as to award 'notional arrears' of housing costs - i.e., where they have now served out the longer waiting period (although they could benefit from the £200,000 limit, and / or be adversely affected by the 104-week limit in JSA). It is understood that the DWP hopes to be able to identify those who are affected by the new rules. In practice, however, claimants who could benefit from them may need to contact the DWP to get them applied.
An example of entitlement arising under the new rules, adapted here from the guidance, is shown in Example 1 below.
An example of entitlement not arising, again adapted from the guidance, is shown in Example 2.
Frank has been receiving statutory sick pay (SSP) since 7/9/09. He claimed IS on 5/10/09 but without the inclusion of housing costs, Frank's income from his SSP exceeded his applicable amount, therefore under the original rules the 13-week waiting period did not apply, and he was told to reclaim IS in May 2010, when he will have completed the 39 week waiting period. On 5/1/10 the new rules came into force. From then, if Frank were to reapply for IS, he would have the 13-week waiting period applied, because: (1) he would be claiming a relevant benefit after 4/1/09; (2) he was not previously actually entitled to a relevant benefit (due to excess income) and (3) there was no linking period to 4/1/09 or before.
Holly is a lone parent receiving IS since February 2008, which includes housing costs towards her £130,000 mortgage (restricted to £100,000). On 18/1/10, she stops being entitled to IS as a lone parent, and claims JSA immediately. Under the new rules, Holly cannot access the £200,000 limit, as although her claim to a relevant benefit on 18/1/10 was after 4/1/09, her previous IS entitlement means that she was getting a relevant benefit immediately before the JSA claim.
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