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