DWP’s assessment of non eligible charges for housing costs when claimant cannot provide evidence

Client is claiming UC and has moved into private tenancy. The landlord either does not know or is reluctant to provide evidence of charges for water etc beyond an email giving an approximate amount from the full monthly rent. The figure he has provided seems quite high. If a claimant cannot provide definitive evidence of ineligible charges then what guidance do the DWP use - if any - to calculate these?

So just to clarify I am referring to non eligible service charge - water, electric etc

Curious about the context for this. I am assuming its some sort of HMO type set up where the rent is inclusive of utilities or a flat in a block where the utilities can’t be separated out between the flats and the immediate landlord is just paying a proportion. Have the DWP raised this for themselves or are you just pre-empting the problem?

If the issue arises, I don’t see whats to stop them just taking a reasonable best estimate of the utilities figures based on the household and property size. I guess instead that they might well just suspend payment of the HCE altogether until the figures are provided.

It sounds like the full monthly rent is known and verified and the issue relates to service charges included within that full rent - not service charges payable separately on top.  Is that correct?

If so, it does not matter how much is for services or what the services are: the housing element is either the full rent or the LHA, whichever is less.  It’s only social sector renters who need to worry about the breakdown of eligible and ineligible service charge amounts.

The only issue I can see here for a private tenant is if perhaps there are additional charges for services, on top of the rent, in which case they should be aggregated with the rent before it is compared with the LHA: in that case, by seeking to verify the service charges, DWP would be helping the claimant out - they are trying to ensure that as much rent as possible gets taken into account.

Hi – yes I’ve got more details now. It’s a studio flat in a block of flats. The charges are for utilities so my understanding is that they wouldn’t be covered by the housing costs even though it’s a private tenancy.  The dwp have said that they will just estimate the costs rather than suspend payment so I wondered if there was any guidance – I suppose along the lines of money advice expenditure guidance.
I guess the best strategy otherwise would be to look at the LHA. I’ve now found out he pays £600 / month to the landlord who has estimated that the cost of utilities within that payment is £125. His local housing allowance rate is £455.17 / month so that is the maximum he is going to get anyway whether the shortfall relates to non-eligible charges or non-eligible rent i.e. over the LHA rate.

For completeness, UC will pay the utilities if they are a condition of tenancy and the total amount of rent plus utilities is still within the LHA rate.  But in this case, the LHA rate is less.  There is absolutely no need for DWP to attempt to identify the split between core rent and utilities - it’s irrelevant for a private tenant.

HB Anorak - 17 September 2019 04:00 PM

There is absolutely no need for DWP to attempt to identify the split between core rent and utilities - it’s irrelevant for a private tenant.

As indeed the guide for landlords provides at para 7.2:

In the private rented sector, a tenant’s total rent is usually made up of both rent and service charges, which are not separately identifiable.

DWP will not need to collect separate service charge information for the private rented sector group as DWP will pay the lesser of the total rent or the appropriate Local Housing Allowance.

https://www.gov.uk/government/publications/universal-credit-and-rented-housing—2/universal-credit-and-rented-housing-guide-for-landlords

Can you direct me to the relevant UC housing costs regs. The client has now reported that he has actually been awarded far less than the local housing allowance rate.

All ok or at least rectifiable - just looked at the figures and pretty sure they have awarded him shared room rate instead of one room

This is a calculation under Part 4, Sch 4 of the UC Regs. Para 22 explains that the rent paid will be - subject to HCCs - the lower of the core rent and the cap rent.

Para 23 defines “core rent” in most cases as the amount of each “relevant payment” normalised to a monthly figure and then added together.

So what is a “relevant payment”? It’s defined in paragraph 3 as:

3.—(1) “Relevant payments” means one or more payments of any of the following descriptions–
(a) rent payments;
(b) service charge payments.
[...]

Service charge payments, for private sector tenants, are described at para 7 of sch 1. A more complicated definition applies for social sector tenants which need not concern us.

We might say that your client is paying £475 a month in rent - which is a relevant payment under 3(1)(a) - and £125 a month in service charges - which is a relevant payment under 3(1)(b) - for a core rent of £600. As the cap rent is lower than that, its the cap rent, i.e. LHA, which applies.