earnings disregards and reduction due to housing costs

I need help and I’m looking at you Gareth!! Or anyone else who has their head round this.

So the max earnings disregard is reduced by 1.5 housing costs.

So is that 1.5 times the max help you could get with housing costs or 1.5 times the actual help you get with housing costs.

Because the actual help you get with housing costs is affected by how much of your earnings are taken into account which is affected by the earnings disregard which is applied which we don’t know until you know how much help you get with housing costs. This seems circular to me or am I just being stupid?

For example if I’m a lone parent with one child my max earnings disregard is £173.08 and my min disregard is £53.46.

If my rent is £100 per week then I only get the min disregard.

But say I am earning £300 per week
Remove the earnings disregard of 53.46 = £246.54
Apply 65% taper = £160.25

So my max UC is reduced by 160.25. This is more than the amount of my housing costs so I’m not getting help with housing costs any longer - just part of my allowances for me and my child. So does that mean I should get the max disregard.

But then my earnings less disregard = 126.92
Apply 65% taper = 82.50

So my max UC is reduced by 82.50 so I am getting help with housing costs so I shouldn’t have the max disregard after all.

So if you’re still with me and followed all that does that mean the housing costs figure used in calculating the earnings disregard must be the max help you could get with housing costs ie your LHA, mortgage interest or whatever?

Help!

I’m pretty sure that the disregard reduction is 1.5 x the max housing element going into the calculation. It’s not 1.5 x the tapered payable amount of UC attributable to housing which would, as you say, introduce a circularity.

( See e.g. http://www.dwp.gov.uk/docs/ucpbn-14-disregards-tapers.pdf - the examples and graphs imply that the disregard remains constant across the income range which wouldn’t be true if the the reduction was based on the post-taper amount.)

Jon’s right.  It is effectively the ‘eligible housing costs’ we know today.

So the actual rent / assessed mortgage interest would be reduced by/to LHA limit, NDDs, bedroom limits for RSLs etc. (getting them all in the right order, of course).

The same figure should then go into the needs side of the calculation and the earnings disregard calculation.

fab - thanks to you both - think i was getting myself in a right twist - all clear now ta