Government Housing Benefits: A Guide for Single People

Today, the “Housing Benefit” has been replaced by “Universal Credit”, along with Child Tax Credit, Income Support, and other services. However, while the name is different the “housing element” of Universal Credit still follows similar rules, and has the same eligibility requirements.

Here’s everything you need to know about housing benefit options for single people, and the potential “taxes” you might need to pay.

Who Can Apply for Housing Benefits with Universal Credit?

The good news for single people, is that anyone can apply for Universal Credit if you’re out of work, or unable to work, and have issues paying your living costs.

You only need to live in the UK, be 18 or over, and be under state pension age. Plus, you’ll need to prove you have less than £16,000 in money, savings, and investments. You can apply for Universal Credit online, through the GOV UK website, or through your local council.

You can also use the Government’s website to find out what kind of benefits you can get, what your benefit payments would amount to, and how your benefits would be affected by a change in circumstances. Notably, your marital status won’t affect your eligibility for Universal Credit, but you won’t necessarily get any additional benefits either (except 25% off your council tax bill).

What Affects Your Housing Benefits

With Universal Credit, a single payment is deposited into your bank account, made up of different amounts based on your circumstances. These payments consider your earnings, and any income entering your household.

The “housing” component of Universal Credit looks at whether you have trouble paying rent or even a mortgage for the home you live in. In general, you’ll get one “standard allowance” per household. If you’re living on your own, you actually get a little extra:

TABLE HERE plus line about % percentage increase

You can also get extra money on top of your standard allowance if you:

• Have children living with you under the age of 16.
• Have children with disabilities currently between £28.70 and £184.30 depending on the level of help the child needs.
• Have a recognised & eligible disability or health condition yourself. (£390.06 if you have limited capability for work)
• Care for someone who has a health or disability-related benefit.

You’ll also be able to apply for Universal Credit alongside other benefits, like Carer’s allowance, maternity allowance, or incapacity benefit.

When Money will Be Taken Off Your Benefit

Your Universal Credit payments can also be reduced if you:

• Have a paid job.
• Need to pay back an advance.
• Have more than £6,000 in money, investments, or savings.
• Are affected by the benefit cap.
• Have a paid job.
• Owe money for council tax, court fines, and other bills.
• Have been overpaid benefits in the past.
• Have other income (such as money from a pension).

HOUSING BENEFITS & THE BEDROOM TAX 

When the controversial bedroom tax was first introduced in 2013, it caused an uproar. Though it’s not technically a “tax”, this rule reduces the amount of housing benefit you can receive if you live in a Housing Association or council home, and have a “spare” bedroom.

Obviously, this is an issue that can affect anyone, from parents whose children leave home, to those who lose their partner, (whether married, civil partners or just live in partners).  However, it’s particularly problematic for single people.

The majority of houses built by the council and housing associations are designed for families. There are very few one-bedroom homes and apartments out there, perhaps because the government doesn’t think they’re so necessary. That means if you’re a single person and you apply for a council home (or a housing association home), you’re probably going to end up with a spare bedroom or two.

What is the Bedroom Tax?

First things first, the name “the bedroom tax” is a nickname used by the press and the public. It’s not actually a “tax” in that sense, and you aren’t going to be actively charged anything to have an extra bedroom. What the bedroom tax does is alter your housing benefit (or the housing element of Universal Credit) when you’re living in socially rented accommodation.

Specifically, at the time of writing your benefit will be reduced by:

• 14% for one extra bedroom
• 25% for two or more additional bedrooms.

For instance, if your rent is currently £380 a month, you’d lose £53.20 per month for one extra bedroom, or £95 per month for two additional bedrooms. That’s a lot of money when you’re living on a single income. Unfortunately, despite more than 10 years of backlash from homeowners, the government doesn’t appear to have any plans to remove the bedroom penalty,

The government says the policy is supposed to encourage people to move out of socially rented homes that have more rooms than they need, making room for larger families. Critics say the bedroom tax punishes social housing tenants who can’t afford to enter the private rental market, and have limited control over the homes they can access.

Unsurprisingly, concerns about the bedroom tax have only increased since the cost of living crisis took the UK by storm, leading to even more financial instability for consumers.

How Many People Does the Bedroom Tax Affect?

The bedroom tax affects all adults (over the age of 16, and below the state pension credit age), who get housing benefit, or the housing element of universal credit, and rent their property from a local authority. That’s a lot of people.

According to Gov.UK, the social housing sector owns 4.4 million homes across England alone.

When the bedroom tax was initially introduced, studies showed that around 660,000 tenants (about 20% of the social housing tenants) were receiving benefits.

Today, there isn’t a lot of up-to-date information available to show how many people are paying the bedroom tax. Although The Independent suggested the number was around half a million in 2022. Government figures do show, however, that the vast majority of people affected by the tax only have one extra bedroom. That does make sense, as a lot of single people who struggle to find one-bedroom houses and apartments may also apply for a two-bedroom house to get a roof over their head.