Calculation of housing benefit and council tax reduction


For housing benefit and council tax reduction purposes, a pensioner is anyone who has reached state pension credit age

How to claim housing benefit and council tax reduction if you receive pension credit

  • If you make a claim for pension credit, you may receive a housing benefit form from the pension service. Once you have filled in the form you should return it to the pension service who will pass it to us.
  • If you are already getting pension credit and have not made a claim through the Pension Service for housing benefit and council tax reduction you should complete an online claim form.
    • If you are not able to complete an online claim straight away, you can register your intention to claim by starting the online claim and selecting the ‘save for later’ option.  Once you have registered your intention to claim you must complete the online claim form, and provide all the evidence required, within one month of the date of your claim. 
    • You can also register your intention to claim by telephoning the benefits service on 020 8825 7000.

If you are not getting pension credit   

  • Proof of identity and proof of your national insurance number must be provided when making a claim.

When to claim housing benefit and council tax reduction

If you claim housing benefit or council tax reduction (or both) we may be able to start your benefit entitlement up to three months before the date you claimed.  We can only do this if you have had to pay rent and council tax and both you and your partner have reached State Pension Credit age before the start of this period and you qualify for benefit.  We may write to you for details covering this period.

You may make a claim up to 17 weeks before reaching State Pension Credit age and we will treat your claim as if you had made it on the date that you reached State Pension Credit age.

Your income  

The claim form asks you about all the income you get. When we work out your benefit we use the gross earnings less tax, National Insurance and half of any pension contributions that you and your partner make.  In all cases we ignore at least the first £5 every week of your earned income.

If you get guarantee or savings credit (or both) we will not need to see any proof of savings or income.

If you are not getting pension credit, we will add together any income, including earnings if you work and any state benefits that you and your partner (if you have one) have.

We must also take into account any savings and investments you or your partner have. This includes shares, National Savings certificates and certain property which you or your partner own other than your home.

The DWP share HMRC information about your earnings and private pensions with us. We will use this information to make sure that you get the correct amount of benefit that you are entitled to, but it is still your responsibility to tell us about any changes in your or your household's circumstances. It is important that you tell us about any changes to your household’s income straight away to prevent overpayments.

Types of income are:

  • Your state pension
  • Any pension from your or your partner’s previous employer
  • Annuities (this is an income that you receive from a lump sum invested with an insurance company)
  • Other state benefits such as working tax credit, incapacity benefit and employment support allowance
  • Rent paid to you by lodgers or sub tenants
  • Maintenance received from a former partner
  • Any DWP benefits
  • Earnings, wages or salary from employment. We will need to see your and your partner’s last five weekly payslips or two monthly payslips. If you or your partner are self-employed we will need evidence of your income such as certified accounts or a record of income and outgoings.


If you do not get guarantee pension credit, savings credit or income based employment support allowance, we need to know about any savings you or your partner have. When you claim you will need to provide proof of all your savings.

This includes:  

  • Bank accounts (all types), building society accounts and post office savings 
  • PEPs, TESSAs and ISAs 
  • Stocks, shares and unit trusts 
  • National Savings certificates 
  • Cash 
  • Property or land you own (but not the home you live in).

Normally, if you have savings of more than £16,000 you are not eligible to claim housing benefit or council tax reduction. This does not stop you claiming alternative maximum council tax reduction.

If you receive guarantee credit you will automatically get maximum housing benefit or council tax reduction (or both) less any non-dependant charges, even if you have savings over £16,000.

If you have reached state pension credit age we will ignore any of you and your partner's savings or investments (or both) on combined totals below £10,000.

If you have over £10,000, we will add £1 a week to your income for every £500 or part of £500 you have over £10,000. So, if you have £11,300, we will count that as an extra income of £3 a week.

How we work out housing benefit and council tax reduction

We will assess your housing benefit and council tax reduction according to the rules set by the government. We can pay extra benefit to war pensioners that qualify.

Each year the government sets figures called allowances and premiums that we use to work out how much money you need to live on each week. The total of these allowances and premiums is called your ‘applicable amount’. Allowances are for basic needs.  There are different rates for single people, couples and children. Premiums are for special needs. There are amounts for families, elderly people, disabled people, single-parent families and carers.

Maximum housing benefit is 100% of the eligible rent that you pay after services such as heating, lighting, water rates and non dependant charges are taken out.  If you pay rent to a private landlord, we may not be able to pay benefit on the full rent if it is too expensive or the accommodation is too large.  Maximum council tax reduction is 100% of your council tax bill less any non-dependant charges. 

If you get guarantee credit or your total income is less than or the same as your applicable amount, you will get maximum housing benefit or council tax reductiont (or both).  If you do not get guarantee credit or income based employment support allowance and your income is higher than your applicable amount you will not get maximum housing benefit and/or council tax reduction. The more money you have coming in the less benefit you will receive.

Going into residential care accommodation

If you move into residential care accommodation but intend to return home you may be entitled to to housing benefit/council tax reduction for up to 52 weeks. If you go into residential care on a trial basis you may be entitled to benefit for up to 13 weeks. You must tell us as soon as possible if you are going away from home and wish to continue claiming housing or council tax reduction.