Housing Benefit vs Universal Credit Housing Costs

If you rent your home and need financial help to pay for it, the system can seem confusing. For most people of working age, Housing Benefit has been replaced by Universal Credit. You now get help with your rent through a part of Universal Credit called the housing element¹. However, this is not the case for everyone. If you have reached State Pension age, or if you live in certain types of supported or temporary accommodation, you will need to claim Housing Benefit instead¹.

The amount you get and how it is paid depends on which benefit you receive. The Universal Credit housing element is usually paid to you as part of your monthly Universal Credit payment, and you then pay your landlord³. Housing Benefit is paid by your local council, often directly to your landlord. Both benefits are calculated using similar rules, including limits on how much rent is covered and reductions if you have spare bedrooms⁴.

This guide explains the key differences between Housing Benefit and the Universal Credit housing element. It covers who can claim each one, what they pay for, how the money reaches your landlord, and what happens if you need to move from the old system to the new one.

Housing Benefit is being replaced by Universal Credit for most people

Housing Benefit is a benefit that helps people on a low income pay their rent. It is being replaced by Universal Credit for most people¹. Universal Credit is a single monthly payment that helps with living costs and rent, and it has replaced several older benefits, including Housing Benefit, Child Tax Credit, Working Tax Credit, and Income-related Employment and Support Allowance⁹.

For most people who are under State Pension age, Universal Credit has replaced Housing Benefit¹⁰. This means that if you are of working age and need help with your rent, you will usually need to claim Universal Credit rather than Housing Benefit. The part of Universal Credit that helps with rent is called the housing element¹¹.

However, there are exceptions. You can only make a new claim for Housing Benefit if you have reached State Pension age, or if you live in supported, sheltered, or temporary accommodation¹. If you are already claiming Housing Benefit and your circumstances have not changed, you can usually continue to receive it as long as you meet the conditions and do not start claiming Universal Credit¹².

The transition to Universal Credit is ongoing. From April 2027, Universal Credit is expected to have fully replaced legacy benefits such as income-related ESA and Housing Benefit for working-age people, though Housing Benefit will remain for people in specified accommodation¹³.

Supported and temporary accommodation: Housing Benefit alongside Universal Credit

If you live in supported or temporary accommodation, the rules are different. You may be able to claim Housing Benefit to help with your rent, even if you are also claiming Universal Credit for your other living costs¹⁴. This is because Universal Credit does not usually cover the housing costs for people in these types of accommodation¹⁵.

Supported accommodation is housing where you get care, support, or supervision to help you live independently. This can include hostels, refuges, and some sheltered housing. If you live in supported exempt accommodation, any help with your housing costs will be covered by Housing Benefit, not Universal Credit¹⁶. This is also true if you live in temporary accommodation arranged by the council because you are homeless¹⁷.

If you are in this situation, you might need to claim Housing Benefit alongside your Universal Credit claim. You can still get Universal Credit to help with other costs, such as food and bills¹⁸. The amount of Housing Benefit you get will be based on your eligible rent and your circumstances.

What the Universal Credit housing costs element covers

The Universal Credit housing costs element is the part of your Universal Credit payment that helps with your rent. It can help with rent and some service charges¹⁹. The amount you get is based on your eligible rent, which is the rent the Department for Work and Pensions (DWP) considers reasonable for your home. It also depends on how many bedrooms you have³.

If you rent from the council or a housing association, the housing element will usually cover the full cost of your rent, as long as it is not considered too high for your needs². If you rent from a private landlord, the amount you get is usually capped by the Local Housing Allowance (LHA) rate for your area²⁰. The LHA is a limit on how much rent can be covered, based on the number of bedrooms you need.

The housing element can also help with some service charges. These are charges for things like cleaning or maintaining communal areas³. It does not cover personal care and support charges in supported housing²¹. If you own your home, you cannot get the housing costs element to help with mortgage payments, but you might be able to get help with certain service charges⁸.

If you live in a mobile home, Universal Credit has a housing element to help with rent, site charges, and pitch fees. However, it might not cover your full rent or charges, and you would have to pay the shortfall yourself²².

How each one is paid

The way your rent help is paid depends on whether you get Universal Credit or Housing Benefit.

Universal Credit housing element: This is usually paid directly to you as part of your monthly Universal Credit payment. Payments are made monthly in arrears³. You are then responsible for paying your landlord. However, you can ask for the housing element to be paid directly to your landlord⁶. Your landlord can also ask for this if you fall behind with your rent⁶. In some cases, for example if you are a social tenant, Universal Credit will pay your housing costs element to your landlord by default²³.

Housing Benefit: This is paid by your local council. It is usually paid directly to your landlord, but it can be paid to you if certain conditions are met⁷. If you get Housing Benefit and are moving to Universal Credit, your Housing Benefit will continue to be paid for two weeks after you claim Universal Credit. This is called a run-on payment⁷.

Local Housing Allowance and the bedroom tax: 14% or 25% cuts under both

Two important rules affect how much help you get with your rent, whether you claim Housing Benefit or Universal Credit: the Local Housing Allowance (LHA) and the under-occupancy rule, often called the bedroom tax.

Local Housing Allowance (LHA): LHA rates are used to decide how much you get in either Universal Credit housing element or Housing Benefit²⁰. They set a maximum amount of rent that can be covered for private renters. If your rent is higher than the LHA rate, you will have to pay the difference yourself. LHA rates apply to private renters. If you rent from the council or a housing association, your eligible rent is usually based on your actual rent, but it can still be reduced if it is considered too high.

The bedroom tax (under-occupancy rule): If you are a working-age tenant renting from the council or a housing association, your help with rent can be reduced if you have more bedrooms than you need⁴. This is known as the under-occupancy rule or the bedroom tax. The reduction is:

• 14% if you have one spare bedroom⁴.
• 25% if you have two or more spare bedrooms⁴.

These reductions apply to both the Universal Credit housing costs element and Housing Benefit⁴. The rules are the same for both benefits. If you are affected by the bedroom tax, you may be able to apply for a Discretionary Housing Payment from your council to help make up the shortfall²⁵.

Moving from Housing Benefit to Universal Credit: the two-week run-on

If you are currently getting Housing Benefit and you claim Universal Credit, your Housing Benefit will not stop immediately. It will continue for two weeks after you apply for Universal Credit⁷. This is called a run-on payment. The extra money will be paid to you in line with your usual Housing Benefit payment cycle⁷.

This two-week run-on is designed to help you manage the transition, as there is usually a wait of around five weeks before you get your first Universal Credit payment²⁶. The run-on payment is not a loan, and you do not have to pay it back.

If you are transferring from Housing Benefit, Income Support, income-based Jobseeker's Allowance, or income-related Employment and Support Allowance, you will be entitled to a run-on payment of two weeks' equivalent of those benefits²⁷. This is to help you cover your costs while you wait for your first Universal Credit payment.

Where Universal Credit housing costs do not help

There are several situations where the Universal Credit housing costs element will not help you, or where you will need to look for other support.

• Mortgage payments: Universal Credit does not help with mortgage payments or secure loan repayments⁸. If you are a homeowner, you cannot get the housing costs element to help with your mortgage. There is a separate scheme called Support for Mortgage Interest, which is a loan that helps with mortgage interest payments.
• Care home residents: If you live permanently in a care home, you will not be able to get support for housing costs through Universal Credit. This is because care home charges are not considered to be rent²⁹.
• Hostels and supported housing: You can claim Universal Credit if you live in a hostel, refuge, or supported accommodation, but you might not get the housing element. If you receive support, you may need to claim Housing Benefit as well to help with your rent³.
• Rate relief: If you are in Northern Ireland, rate relief will not carry over from Housing Benefit to Universal Credit. While support for rent and certain service charges will carry over, rate relief will not¹⁴.
• Shared accommodation rate: If you are under 35 and rent a room in shared accommodation, the amount of Universal Credit you get for rent may be limited to the shared accommodation rate. This limit does not apply in some situations, for example if you get a disability benefit¹⁰.

If you are struggling to pay your rent, there is help available. You can contact your local council to ask about a Discretionary Housing Payment, which can help if you need extra money to cover your rent²⁵. You can also get free, independent advice from organisations like Shelter, Citizens Advice, or Turn2us.