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Scotland

Payment condition

The housing cost element under universal credit can be claimed for rent payments, mortgage interest payments and service charges.

This content applies to Scotland

Universal credit: Payment condition

To meet the payment condition the payment must be made in respect of a property that the claimant occupies as their home. [1]

Rent payments

These are defined as: [2]

  • rent

  • payments for a license or other permission to occupy accommodation

  • rent payments and/or mooring charges for a houseboat

  • rent payments and/or site charges for a caravan or mobile home

  • occupation payments by residents of almshouses.

Mortgage interest payments

These are referred to as ‘owner-occupier payments’ and include: [3]

  • interest payments on a loan secured on the claimant’s accommodation

  • alternative finance payments (eg Islamic mortgages).

From 6th April 2018 loans replaced mortgage interest payments for both Support for mortgage interest and mortgage interest payments previously paid via universal credit. See the pages support for mortgage interest for more information.

Service charges

Only certain payments for services or facilities are eligible. [4] The payment must meet the following three conditions:

  • it must be payable as a condition of occupying the home

  • it must fall within one of the following categories: [5]

    - external cleaning of windows, only in relation to upper floors in a multi-storey building (what constitutes an ‘upper floor’ is yet to be defined)

    - internal or external repair of shared ownership or owner-occupied property

    - payments for the general upkeep of communal areas, for example, cleaning and utilities payments

    - payments for basic communal services, for example refuse collection, lift maintenance and access to the building

    - payments for essential items provided with the accommodation, such as furniture and/or domestic appliances.

  • it must be of a reasonable amount, and relate to services or facilities which are reasonable to provide. [6]

Rent reduction under incentive scheme

With effect from 30 April 2017, a reduction in a claimant's rent or eligible service charges under an approved tenant incentive scheme is to be disregarded when calculating the housing costs element. The scheme must be operated by a local authority or a private registered provider of social housing and approved by the Secretary of State.[7]

The purpose of such schemes is to offer a financial incentive to tenants in social housing for managing their own rent payments and interacting digitally with the Department for Work and Pensions.

Excluded payments

The following payments are excluded from being covered by the housing costs element:[8]

  • ground rent

  • for tents or tent sites

  • for accommodation provided to people granted bail, or in ‘approved premises’, ie in connection with their rehabilitation or supervision in relation to a conviction

  • for care homes

  • towards the capital of a mortgage

  • for service charges relating to the provision of food, medical services or personal services (including personal care)

  • For 'specified accommodation' - a universal credit claimant must claim housing benefit in respect of payments for specified accommodation[9]

NB, with respect to the last bulleted item, prior to 2 November 2014 a universal credit claimant could only be awarded housing benefit in respect of payments for 'exempt accommodation'.[10] Authorities are advised to consider making a discretionary housing payment to a claimant who falls within the categories of specified accommodation that are not 'exempt accommodation', in order to protect them from the effect of the benefit cap.

See the page on the Benefit cap for a definition of exempt and specified accommodation.

Last updated: 18 December 2020

Footnotes

  • [1]

    s.11(1) Welfare Reform Act 2012

  • [2]

    Sch.1 para 2 Universal Credit Regulations 2013

  • [3]

    Sch.1 paras 5-6 Universal Credit Regulations 2013

  • [4]

    Sch.1 para 7(2)(a)-(b) Universal Credit Regulations 2013

  • [5]

    Sch.1 para 8(4) Universal Credit Regulations 2013

  • [6]

    Sch.1 para. 8(5) Universal Credit Regulations 2013

  • [7]

    Sch.4 Part 5 para 32A Universal Credit Regulations 2013 SI 2013/376 as inserted by Universal Credit (Tenant Incentive Scheme) Amendment Regulations 2017 SI 2017/427; ADM Memo 14/17, DWP.

  • [8]

    Sch.1 para 3 (a)-(g) and para 8 (6)(a)-(c) Universal Credit Regulations 2013 SI 2013/376.

  • [9]

    reg.3 Universal Credit (Transitional Provisions) (Amendment) Regulations 2014; para 3A Sch 1 Universal Credit Regulations 2013 SI 2013/376 inserted by Housing Benefit and Universal Credit (Supported Accommodation) (Amendment) Regulations 2014 SI 2014/771; HB Circular A8/2014.

  • [10]

    Universal Credit (Transitional Provisions) Regulations 2013 SI 2013/386, as amended by reg 3 Universal Credit (Transitional Provisions) and Housing Benefit (Amendment) Regulations 2013 SI 2013/2070; HB Circular A19/2013;  ADM Memo 05/13, DWP.