Chapter 2: The Statutory Framework

Managing Housing Benefit Claims in Supported Housing | Part A: The Legal and Policy Framework

In brief

  • Housing Benefit for supported housing rests on a small number of provisions. Most disputes turn on how they apply to the facts, not on what they say.
  • The definition of exempt accommodation is in paragraph 4(10) of Schedule 3 to the Consequential Provisions Regulations. It requires the right kind of landlord and care, support or supervision provided by the landlord or on its behalf.
  • Exempt accommodation is one of four categories of specified accommodation, defined in regulation 75H of the HB Regulations. Specified accommodation keeps housing costs in Housing Benefit and outside the benefit cap.
  • In exempt accommodation, the eligible rent is decided under alternative regulations 12, 13 and 13ZA, the “old scheme” rules. The full rent is eligible unless one of the specific restrictions applies.
  • Service charges are eligible unless Schedule 1 makes them ineligible. Charges for support are ineligible. Charges connected with the provision of adequate accommodation are eligible.
  • Councils can ask only for information and evidence that is reasonably required to decide the claim (regulation 86).
  • The subsidy rules limit how much of the Housing Benefit paid for non-registered providers’ exempt accommodation the council gets back from central government. They do not change what the claimant is entitled to.

The law

2.1 The Housing Benefit Regulations 2006: liability, eligible rent and service charges

The starting point is that Housing Benefit is payable for periodical payments that a person is liable to make for the dwelling they occupy as their home. These include rent, licence payments and service charges that must be paid as a condition of occupying the dwelling (regulation 12(1), and alternative regulation 12(1) in exempt accommodation).

Service charges are periodical payments for services, whether or not they are separately identified in the agreement. “Services” means services performed, facilities provided (including the use of furniture) and rights made available to the occupier (regulation 12(8), and alternative regulation 12(7)).

Service charges are eligible unless Schedule 1 says otherwise. The ineligible charges that matter most in supported housing are:

  • day-to-day living expenses, including meals, laundry, leisure items, cleaning of the tenant’s own room and windows, and transport (para 1(a))
  • emergency alarm systems (para 1(c))
  • medical expenses, and nursing or personal care (paras 1(d) and (e))
  • “general counselling or … any other support services, whoever provides those services” (para 1(f))
  • any other service “not connected with the provision of adequate accommodation” (para 1(g))
  • fuel, except for communal areas (para 5)

Cleaning of communal areas, and of the outside of windows that tenants cannot clean themselves, remains eligible (para 1(a)(iv)). Where an ineligible charge is not separately identified, the council apportions a fair amount having regard to the cost of comparable services (para 3(1)). Where an eligible service charge is excessive compared with comparable services, the excess is deducted (para 4).

The key distinction in supported housing is between support, which is ineligible, and services connected with the provision of adequate accommodation, which are eligible. Intensive housing management is in the second category where it is genuinely about managing the accommodation. Chapters 7 and 9 explain how the case law draws that line.

2.2 The definition of exempt accommodation

Exempt accommodation is defined in paragraph 4(10) of Schedule 3 to the Consequential Provisions Regulations. It is accommodation that is either:

  • a resettlement place provided with grant under section 30 of the Jobseekers Act 1995; or
  • “provided by a non-metropolitan county council in England …, a housing association, a registered charity or voluntary organisation where that body or a person acting on its behalf also provides the claimant with care, support or supervision”.

In practice, the second limb is the one that matters. It has three elements, each covered in Part B:

  1. The right kind of landlord: a non-metropolitan county council in England, a housing association, a registered charity or a voluntary organisation. Chapter 5 covers what each of these means, including the “provided by” test.
  2. Care, support or supervision provided to the claimant: the support must actually be provided, and it must be more than minimal. Chapters 6 to 8 cover the meaning of CSS, intensive housing management and the “more than minimal” test.
  3. Provided by the landlord or a person acting on its behalf: the support can be delivered by another organisation, but only if it is acting on the landlord’s behalf. Chapter 5 covers this.

The question is whether the accommodation is exempt accommodation for the particular claimant. It is decided on the facts of each claim, although in practice the evidence will often be the same across a scheme.

2.3 Specified accommodation and its four categories

Regulation 75H of the HB Regulations defines specified accommodation by reference to four categories: exempt accommodation, managed properties, refuges and local authority hostels. Chapter 1 summarises each category. The same definition appears in paragraphs 3(h) and 3A of Schedule 1 to the Universal Credit Regulations 2013, which is why housing costs for specified accommodation are excluded from Universal Credit.

Being specified accommodation has two main effects:

  • housing costs are met through Housing Benefit, not Universal Credit
  • Housing Benefit for the accommodation is excluded from the benefit cap

Only exempt accommodation also benefits from the old scheme rent rules in 2.4. Rents in the other three categories are assessed under the rules that apply to their landlord type.

2.4 Rent restriction in exempt accommodation: the preserved rules

For exempt accommodation, the eligible rent is decided under the versions of regulations 12, 13 and 13ZA set out in paragraph 5 of Schedule 3 to the Consequential Provisions Regulations (Schedule 3, para 4(1)(b)). These are the rules that applied before 1996. Local Housing Allowance does not apply, and there is no “maximum rent”.

The starting point is the full contractual rent and eligible service charges, less any ineligible charges (alternative regulation 12(3)). That amount can be reduced only under the specific restrictions:

  • alternative regulation 13(3)(a): the dwelling is larger than reasonably required, having regard to suitable alternative accommodation occupied by a household of the same size
  • alternative regulation 13(3)(b): the rent is unreasonably high by comparison with the rent for suitable alternative accommodation elsewhere
  • alternative regulation 13ZA: a rent increase is unreasonably high, or is unreasonable because it follows the previous increase within 12 months

Where alternative regulation 13(3) applies, the council reduces the eligible rent “by such amount as it considers appropriate having regard in particular to the cost of suitable alternative accommodation elsewhere”. A Rent Officer’s determination can inform that decision, but it does not set the eligible rent.

Restriction is also subject to strong protections:

  • Protected groups (alternative regulation 13(4)): if the claimant, their partner or a relevant household member has reached the qualifying age for State Pension Credit, is incapable of work or has limited capability for work, or lives with a child or young person they are responsible for, no reduction can be made unless suitable cheaper alternative accommodation is available and it is reasonable to expect the claimant to move.
  • Bereavement (alternative regulation 13(5)): no reduction for 12 months after the death of a relevant household member, if the claimant stays in the same dwelling.
  • The first 13 weeks (alternative regulation 13(7) and (8)): no reduction for the first 13 benefit weeks if the claimant could afford the rent when they took it on, unless they had an award of Housing Benefit in the previous 52 weeks.
  • Suitability (alternative regulation 13(9)): alternative accommodation is suitable only if it takes account of the age and state of health of the household, and, where the claimant has security of tenure, offers reasonably equivalent security.

Chapter 10 explains how the courts and tribunals have applied these rules. In supported housing, the most important point is that “suitable alternative accommodation” must be suitable for this claimant, which means it must provide comparable care, support or supervision.

2.5 Contrived tenancies: regulation 9(1)(l)

A person is treated as not liable to make payments where “the appropriate authority is satisfied that the liability was created to take advantage of the housing benefit scheme” (regulation 9(1)(l)). It applies only where none of the other parts of regulation 9(1) do.

The test is about the purpose for which the liability was created, not whether the rent is high or the landlord benefits from Housing Benefit. Charging a rent that relies on Housing Benefit to pay it is not, on its own, taking advantage of the scheme. Chapter 11 covers the case law, which sets a high bar.

2.6 Information and evidence: regulation 86

A claimant must provide the information and evidence “as may reasonably be required by the relevant authority in order to determine that person’s entitlement to, or continuing entitlement to, housing benefit”. It must be provided within one month of the request, or a longer period the council considers reasonable (regulation 86(1)).

Three points follow from the wording:

  • The test is what is reasonably required, not everything that might be relevant or useful.
  • The information must be needed to decide entitlement, not for other purposes such as commissioning or contract monitoring.
  • The duty falls on the claimant. In supported housing, the provider holds much of the evidence, so in practice the council should ask the provider for it, and the provider supplies it to support the claim, provided it has written authority to act on the claimant’s behalf.

Part C (Chapters 12 to 16) explains what is reasonable to ask for and to provide.

2.7 Decisions, revisions, supersessions and appeals

Decisions, revisions and appeals are governed by the Housing Benefit and Council Tax Benefit (Decisions and Appeals) Regulations 2001 and Schedule 7 to the Child Support, Pensions and Social Security Act 2000. The main points are:

  • Who can challenge: a “person affected” by a decision. This includes the claimant, an appointee, and a landlord or agent for decisions about direct payment and about recovery of an overpayment from them (regulation 3).
  • Reconsideration (revision): must normally be requested within one month of the decision, or of a written statement of reasons. This can be extended up to 13 months in special circumstances (regulations 4 and 5).
  • Appeal to the First-tier Tribunal: must normally be made within one month. The council first reconsiders the decision, and the appeal lapses if it changes the decision in the appellant’s favour (regulations 4 and 20, and the Tribunal Procedure (First-tier Tribunal) (Social Entitlement Chamber) Rules 2008).
  • Supersession: a decision can be superseded when circumstances change, for example when a scheme’s support model changes (regulation 7).
  • Upper Tribunal: an appeal on a point of law lies from the First-tier Tribunal to the Upper Tribunal, with permission.

In supported housing, a decision about whether a scheme is exempt accommodation usually affects every tenant in it. Chapters 19 and 20 cover how to manage reviews and appeals in that situation.

2.8 Overpayments, recovery and payment to landlords

Payment to landlords. A rent allowance must be paid direct to the landlord where the claimant has eight weeks or more of arrears, unless it is in the claimant’s overriding interest not to, and may be paid direct in other circumstances (regulations 95 and 96). In supported housing, direct payment is the norm. No direct payment can be made to a landlord the council is not satisfied is a fit and proper person to receive it (regulation 95(3)).

Overpayments. An overpayment is recoverable unless it was caused by official error and nobody could reasonably have been expected to realise it was an overpayment (regulation 100). Where the landlord was paid directly, the overpayment is generally recoverable from the claimant or the landlord, but the rules in regulation 101 limit this:

  • If it arose because someone misrepresented or failed to disclose a material fact, it is recoverable only from that person (regulation 101(2)(b))
  • If it arose from official error, it is recoverable only from someone who could reasonably have been expected to realise it was an overpayment (regulation 101(2)(c))

This matters in supported housing. If a council later decides that a scheme was not exempt accommodation, the provider may face large recovery claims. Whether the overpayment is recoverable, and from whom, depends on why it arose. Chapter 21 covers this.

2.9 Housing Benefit subsidy, and why it affects council behaviour

Councils pay Housing Benefit and claim most of it back from the Department for Work and Pensions as subsidy. The subsidy rules do not affect what the claimant is entitled to. But they explain much of the pressure councils are under in exempt accommodation.

  • Registered housing associations (registered providers). A tenancy with a registered housing association is excluded from Rent Officer referral unless the council considers the rent unreasonably high (Schedule 2, para 3). Where no referral is needed, the council can claim subsidy on the full eligible rent (Subsidy Guidance Manual, para 820).
  • Other landlords, including registered charities, voluntary organisations and community interest companies that are not registered providers. These tenancies must be referred to the Rent Officer. In general, no subsidy is paid on Housing Benefit above the Rent Officer’s determination (para 770). The exceptions are:
    • full subsidy for the first 13 weeks where alternative regulation 13(7) applies
    • 60% subsidy on the excess where the council cannot restrict the rent because of the protections in alternative regulations 13(4), (5) and (7), or 13ZA
    • nil subsidy on the excess where the council could restrict but does not restrict down to the Rent Officer’s figure (paras 770 and 771)

The result is that a council paying Housing Benefit on an exempt rent above the Rent Officer’s figure to a non-registered provider can lose some or all of the subsidy on the difference. These losses can be very large. This is a legitimate concern for councils, and it explains why councils scrutinise these claims closely.

The subsidy rules cannot be a reason to restrict a rent that the law does not allow to be restricted. The council must decide the eligible rent under Alternative Regulation 13. Only then do the subsidy rules determine how much of it is reimbursed.

The guidance

The DWP guidance on supported housing claims summarises this framework:

  • Specified accommodation and its four categories: paras 71 to 88. Exempt accommodation is at paras 73 to 75.
  • Universal Credit: housing costs for specified accommodation are not payable in Universal Credit (para 64), and the council decides whether accommodation is specified accommodation (para 65).
  • Old scheme rules: exempt accommodation claims are subject to the pre-1996 rules for determining eligible rent (paras 75 and 203).
  • Care, support or supervision: the regulations do not define it, so it has its ordinary meaning (para 136), and it must be more than minimal (para 150).

The Housing Benefit Subsidy Guidance Manual explains the subsidy rules for exempt accommodation and Rent Officer referrals (paras 750 to 771 and 810 to 822 in the 2024 to 2025 edition).

Good practice

  • Use the correct provisions. In exempt accommodation, decision letters and requests should refer to alternative regulations 12, 13 and 13ZA, not to the main versions in the HB Regulations, which do not apply. Using the wrong rules is a common error and a frequent ground of appeal.
  • Separate the questions. Decide in order: is there liability; is the accommodation exempt accommodation for this claimant; what is the eligible rent and service charge; is any restriction justified. Mixing them leads to poor decisions.
  • Keep subsidy and entitlement apart. Councils should be open with providers about subsidy pressures, but should never use subsidy loss as a reason for a decision about entitlement. Providers should understand why subsidy matters and factor it in when setting rents and engaging with councils. Working with a reputable Registered Provider through The Exempt Accommodation Project might be a consideration here.
  • Ask only for what is reasonably required. Every information request should make clear which question it relates to and why the information is needed.
  • Plan for recovery risks. Councils and providers should agree early how they will raise and resolve scheme-level concerns, so they can deal with problems before large overpayments build up.

Evidence

This chapter sets out the legal basis for evidence requests in regulation 86. What is reasonable to ask for and to provide is covered in Part C (Chapters 12 to 16).

Finding common ground

Understanding subsidy. Many providers are unaware of how the subsidy rules work, or that a council can lose most of the subsidy on an exempt rent paid to a non-registered provider. Many councils, in turn, do not always explain this. Once both sides understand that entitlement and subsidy rules are separate, it becomes easier to have an open conversation about rent levels without either side feeling the other is acting in bad faith.

Starting from the wording. Many disputes can be narrowed by going back to the exact words of the regulations. The test in regulation 86 is “reasonably required”; the test in alternative regulation 13(3)(b) is “unreasonably high by comparison with … suitable alternative accommodation”; the test in regulation 9(1)(l) is whether the liability was “created to take advantage of the housing benefit scheme”. Agreeing on the test, before arguing whether it is met, saves time on both sides.

Being clear about which rules apply. A council applying the wrong rent rules, or a provider assuming that exempt status means the full rent must always be paid, will both reach the wrong answer. The alternative regulations allow restriction in defined circumstances and protect the rent in others.

Key cases and cross-references

The leading cases on each provision are covered in Part B:

  • Exempt accommodation definition: Chapters 5 to 8
  • Service charges: Chapter 9
  • Rent restriction under alternative regulations 13 and 13ZA: Chapter 10, including Birmingham City Council v SS and SA [2016] EWCA Civ 1211
  • Contrivance under regulation 9(1)(l): Chapter 11
  • Related chapters: Chapter 12 onwards (evidence); Chapter 19 (decisions); Chapter 20 (reviews and appeals); Chapter 21 (overpayments)
  • Appendices: Appendix 2 (extracts from the legislation)

Legislation

Guidance

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Next: Chapter 3: The DWP Guidance on Supported Housing Claims

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This manual is licensed under CC BY-ND 4.0: you can share it freely, with credit to SHP, without changes. See Rights and licence. Supported Housing People Ltd, Version 1.0, October 2026.