Tax Credits to Universal Credit - Transitional protection Housing Benefit

northboot

Hi, I'm 58 years old, single and currently receiving Tax Credits. I've received a migration notice telling me I need to apply for UC by the 4th of August 2024.

My current rent is £70 a week, one-bedroom flat with a private landlord, and I'm self-employed with a very low income, so I'm getting the full £70 a week housing benefit from the council and a reduction in Council Tax.

The landlord has been mentioning about putting the rent up soon. The LHA is £115 a week in this area.

I have a fixed term tenancy agreement from 2015 for 12 months, and it has continued and stayed the same rate at £70 to this current date.

On UC I understand I will be given 1 years grace regarding self-employment before the minimum floor kicks in.

My question is...

If I submit a new transitional claim from Tax Credits to UC with the current rent being £70 a week and the landlord in a month or so decides to increase the rent to say £100 after I have been moved over to UC will the rent increase be covered?

I'm not sure if I should notify the landlord that if he is thinking about increasing the rent it needs to be in a new tenancy agreement provided to me before the transition deadline of the 4th of August which I then inform the council of the change, or just wait until the rent goes up later and then provide Universal Credit instead with the new tenancy agreement.

As you can see I'm unsure if transitional protection protects me against any future rent increases in my circumstance and can't find any information about it online anywhere.

I'm not currently receiving any extra benefits like disability etc. Just Tax Credits, Housing Benefit and a Council Tax reduction.

Thanks,

northboot

tomtom256

If the rent charged is within your local housing allowance figure for your area, then yes the increase would be covered, but it would erode any transitional protection that may be applied, at the start of your claim.
You would also only get the grace period if you are deemed to be "gainfully self employed", if you are deemed not to be gainfully self-employed, you would be expected to look for other full time work in order to receive UC. I would look at this on gov.uk and prepare yourself.

HillStreetBlues

You would want the increase in rent before you moved to UC.

northboot

Thanks for the replies.

At the moment I get £65 Tax Credits per week, housing benefit full amount £70 and a council tax reduction.

Total = £135 a week, and I'm paying about £25 a month council tax.

This is where I'm confused...

If the landlord put the rent up to £100 a month after transitioning would that mean I would lose £30 from any payments ie: currently £65 would go down to £35 a week? That can't be right can it?

Hope you can clarify if this would be the case.

poppy12345

It will mean your UC will remain the same. If other elements increase the Transitional element decreases by the same amount. 

northboot

Thanks for the reply.

So currently Tax Credits and Housing benefit combined is £65 WTC + £70 Housing Benefit TOTAL £135 weekly.

I'm assuming transitional protection would be the same amount £135 on UC weekly.

The rent goes up by £30 a week surely it would be added to the rent element which would be £165 UC combined?

poppy12345

If rent increases then yes housing element increases. However, as has been advised your Transitional Protection (if entitled) will decrease by the same amount so you will still receive the same amount of money overall. 

Newcad

northboot said:

So currently Tax Credits and Housing benefit combined is £65 WTC + £70 Housing Benefit TOTAL £135 weekly.

I'm assuming transitional protection would be the same amount £135 on UC weekly.

The rent goes up by £30 a week surely it would be added to the rent element which would be £165 UC combined?

I calculate from what you say there (you haven't mentioned any other income, or any savings/capital, so I'm ignoring those) that with UC you should get:
£393.45 Standard Allowance.
£303.33 Housing Element (£70 * 52 / 12)
£696.78 Total UC entitlement. (per month)
That's an equivalent of £160.79 a week (£696.78 *12 / 52) Which is £25.79 a week MORE than your current £135 WTC + HB so there would be no Transitional Element needed or payable. (which makes things a bit simpler).
Any SE earnings will of course be deducted from that £696.78 at the rate of 55p in the £.
If/when your landlord puts the rent up your UC Housing Element will increase to cover it up to the applicable LHA rate.
Council Tax Support is not migrated to UC. Because you will be getting more money with UC than you did with WTC then what you have to pay towards CT may or may not change depending on your council.

Two more things to note:
Your Current HB of £70/week (or whatever if it goes up before you claim UC) will run-on for 2-weeks after you have claimed UC - You don't have to pay that back so you get the rent twice for those 2-weeks. once from HB then again later from UC.
If you are already on UC when the rent goes up that that rent rise is applied from the start of the UC Assessment Period in which it happens.(So if the timing is right you can 'win' a few weeks of the rise amount).

northboot

Thanks for the information Newcad. That really helps me understand how it works. And thanks to everyone else who replied here too.

Yamor

Newcad said:

northboot said:

So currently Tax Credits and Housing benefit combined is £65 WTC + £70 Housing Benefit TOTAL £135 weekly.

I'm assuming transitional protection would be the same amount £135 on UC weekly.

The rent goes up by £30 a week surely it would be added to the rent element which would be £165 UC combined?

I calculate from what you say there (you haven't mentioned any other income, or any savings/capital, so I'm ignoring those) that with UC you should get:
£393.45 Standard Allowance.
£303.33 Housing Element (£70 * 52 / 12)
£696.78 Total UC entitlement. (per month)
That's an equivalent of £160.79 a week (£696.78 *12 / 52) Which is £25.79 a week MORE than your current £135 WTC + HB so there would be no Transitional Element needed or payable. (which makes things a bit simpler).
Any SE earnings will of course be deducted from that £696.78 at the rate of 55p in the £.

Transitional protection is calculated after any deduction in UC for earnings, so there could well be some entitlement.

OP, how much self-employed income does your latest tax credits award notice say that you have for the year?