Rate Relief Scheme
The Government recognises the impact of the new rates regime on those least able to pay and the need therefore to provide adequate safeguards for those households.
Many responding to the public consultation in 2004 expressed the view that any relief scheme must provide assistance to those on low incomes, and not simply provide blanket relief irrespective of ability to pay.
The Scheme will provide relief to those low income households who are just beyond the thresholds for the statutory Housing Benefit Scheme or who are in receipt of partial Housing Benefit.
It will be administered by the Rate Collection Agency for owner occupier households and by the Northern Ireland Housing Executive for the rented sector, including Housing Associations.
In the region of 40,000 households could receive assistance under the new scheme, and on average £270 awarded.
25% of households currently receive assistance with their rates bill through the statutory housing benefit system, with 20% of the lowest income households having to pay nothing.
The Scheme will use the same calculation which is used for Housing benefit but will adjust one element of that, the excess income figure, to allow for a more generous figure for the purposes of calculating rate relief.
The following examples provide an indication of how these might work out in various family scenarios, however each real life situation has different circumstances and these examples are only provided by way of illustration only.
In the examples –
- Applicable amount is the amount of money the Government says you (and you partner and dependent children, if they live with you) need to live on. It is made up of a personal allowance for you and your partner, allowances for dependent children, and extra amounts (usually called Premiums) to help with special needs, for example, disability, age, single parents and families.
- Assessible income is the amount of your income taken into account for benefit purposes.
- Excess income is the difference between the assessible income and applicable amount.
Example 1: Couple with 2 children – Capital value approximately £205,000
1. Applicable amount: £14355.12
2. Assessable income: £18021.64
Excess income (2 - 1): £3666.52
Rates bill: £1231.36
Deduction for excess income (20%): £733.30
Amount of housing benefit: £498.06
Reworked for rate relief scheme
1. Applicable amount: £14355.12
2. Assessable amount: £18021.64
Excess income (2 - 1): £3666.52
Rates bill: £1231.36
Deduction for excess income (12%): £439.98
Amount of housing benefit & rate relief: £791.38
Amount of rate relief: £293.32
Example 2: Single Pensioner (over 65 with a small private pension - £6000) - Capital value approximately £115 000
1. Applicable amount: £6861.40
2. Assessable income: £10380.76
Excess Income (2 - 1): £3519.36
Rates Bill: £690.00
Deduction for excess income (20%): £703.87
Amount of Housing Benefit: £NIL
Reworked for the rate relief scheme
1. Applicable amount: £6861.40
2. Assessable income: £10380.76
Excess Income (2 - 1): £3519.36
Rates Bill: £690.00
Deduction for excess income (12%): £422.32
Amount of Rate Relief: £267.68
Example 3: Husband, Wife with 4 Children, capital value approximately £128,000
1. Applicable amount: £15,010.84
2. Assessable income: £15,663.96
Excess income (2 - 1): £653.12
Rates bill: £766.48
Deduction for excess income (20%): £130.62
Amount of housing benefit: £635.86
Reworked for the rate relief scheme
1. Applicable amount: £15,010.84
2. Assessable income: £15,663.96
Excess income (2 - 1): £653.12
Rates bill: £766.48
Deduction for excess income (12%): £78.37
Housing benefit and rate relief awarded: £688.11
Amount of rate relief: £52.25
Example 4: Pensioner couple over 65, capital value approximately £108,000
1. Applicable amount: £10,277.80
2. Assessable income: £11,578.84
Excess income (2 - 1):£1,301.04
Rates bill:£650.00
Deduction for excess income (20%):£260.21
Amount of housing benefit:£389.79
Reworked for rate relief scheme
1. Applicable amount: £10,277.80
2. Assessable amount: £11,578.84
Excess income (2 - 1): £1,301.04
Rates bill: £650.00
Deduction for excess income (12%): £156.12
Amount of housing benefit & rate relief: £493.88
Amount of rate relief: £104.09
