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An award of UC may include an amount for housing costs, the HCE, if the claimant
is liable to make payments on the accommodation they occupy as their home (1). This
could be in the form of rent, mortgage costs or other housing-related costs. However
the accommodation
1. must be in GB and
2. must be residential and
3. can consist of the whole or part of a building or comprise separate or self
contained premises.
1 WR Act 12, s 11

F2002 When is an award to include the housing costs element

An award of UC will include an amount in the HCE for an assessment period where
the claimant meets (1)
1. the payment condition (see F2003) and
2. the liability condition (see F2004) and
3. the occupation condition (see F2005).

1 UC Regs, reg 25(1) & (5)

F2003 « F2002 « F2016 « F2017

The payment condition is met (1) if the payments in respect of the accommodation are
1. rent payments (see F2033) or
2. owner-occupier payments (see F2036) or
3. service charge payments (see F2040).

1 UC Regs, reg 25(2)

F2004 « F2002

The liability condition is met (1) if
1. the claimant (or joint claimant)
1.1 has a liability to make the payments which is on a commercial basis
(see F2081 et seq) or
1.2 is treated as having a liability to make the payments (see F2087 et seq)
and
2. none of the exceptions in F2105 et seq apply.

1 UC Regs,reg 25(3)

F2005 « F2002

The occupation condition is met (1) if
1. the claimant is treated as occupying the accommodation as their home, (see F2161 et seq) and
2. none of the exceptions in F2211 et seq apply.
1 UC Regs,reg 25(4)

[F2006-F2015]

F2016 HCE for renters and owner occupiers « F2018

The HCE of UC will include support for renters where (1)
1. the claimant meets all the conditions in F2003 and
2. the payments the claimant is liable to make are rent payments (F2041)
(whether or not service charge payments are also payable).

1 UC Regs, reg 26(1)

F2017 « F2018

The housing costs element of UC will include support for owner occupiers where (1)
1. the claimant meets all the conditions in F2003 and
2. the payments the claimant is liable to make are
2.1 owner-occupier payments (F2044) (whether or not service charge
payments are also payable) or
2.2 service charge payments only.

1 UC Regs, reg 26(2)

F2018

Where both F2016 and F2017 apply to payments in respect of a shared ownership
tenancy (1)
1. an amount will be calculated for support for renters and support for owner-
occupiers and
2. the amount of the claimant's housing costs element will be the aggregate of
both those amounts.

1 UC Regs, reg 26(3)

F2019

Where there are service charges payments in shared ownership tenancy cases,
those service charges will be calculated under the rules for rent (1).
1 UC Regs; reg 26(4)

F2020 Meaning of shared ownership tenancy « D2090

Shared ownership tenancy means (1)
1. in England and Wales, a lease granted on payment of a premium calculated
by reference to a percentage of the value of the accommodation or the cost of
providing it
2. in Scotland, an agreement by virtue of which
2.1 the tenant of the accommodation of which they and landlord are joint
owners is the tenant in respect of the landlord's interest in the
accommodation or
2.2 the tenant has the right to purchase the accommodation or the whole or
part of the landlord's interest in it.

1 UC Regs, 26(5)

F2021 « D2090

Shared ownership is a way of buying a stake in a property if a person cannot afford
to buy it outright. They have a sole occupancy right, that is they do not have to share
their home with anyone else. Shared ownership properties are usually offered for
sale by housing associations. A share of a property is bought, and rent is paid to the
housing association for the remainder. Monthly payments will include repayments on
any mortgage taken out, plus rent on the part of the property retained by the housing
association.

[F2022-F2026]

Meaning of payments in respect of accommodation
Interpretation

F2027 Approved premises

Approved premises means premises approved under prescribed legislation (1). This
includes provision for the approval of premises providing accommodation when
people are granted bail in criminal proceedings and for or in connection with the
supervision or rehabilitation of people convicted of criminal offences.
1 UC Regs, Sch 1, para 1; Offender Management Act 07, s 13

F2028 Care home

Care
home (1)
1. in England and Wales, means a care home (2) within the meaning of prescribed legislation
2. in Scotland, means a care home service within the meaning of prescribed
legislation (3) and
3. includes an independent hospital.
1 UC Regs, Sch 1, para 1; 2 Care Standards Act 2000, s 3;
3 Public Reform (Scotland) Act 2010, Sch 12, para 2

F2029 Exempt accommodation

Exempt accommodation means (1)
1. accommodation which is
1.1 a resettlement place and
1.2 provided by persons to whom the Secretary of State has given
assistance by way of a grant
within the meaning of prescribed legislation (2) or
2. accommodation provided by
2.1 a non-metropolitan county council or
2.2 a housing association or
2.3 a registered charity or
2.4 a voluntary organisation
where they, or someone acting on their behalf, also provides a person with care,
support or supervision.
1 UC Regs, Sch 1, para 1; 2 JSA Act,95, s 30

F2030 Housing association

Housing association has the meaning given in prescribed legislation (1).
1 UC Regs, Sch 1, para 1; Housing Associations Act 1985 s 1(1)

F2031 Independent hospital

Independent hospital has the meaning given in prescribed legislation (1).
1 UC Regs, Sch 1, para 1; NHS Act 2006 s 275;
Care Standards Act 2000 s 2; NHS (Scotland) Act 1978 s 10F(1)(a) & (b)

F2032 Mesne Profits « F2202

Mesne profits are
1. payments made by a former tenant who remains in occupation unlawfully, for
example, after their notice to quit has expired
2. also known as damages for trespass and are formally awarded by a court. If a
former tenant makes payments in advance of a court order, regard the
payments as mesne profits
3. known in Scotland as violent profits.

F2033 Registered charity « D2112 « F2003 « M1044 « M2005 « M2060 « M2100 « M4004 « M4051

Registered charity means (1) a charity maintained in the register of charities under
prescribed legislation.
1 UC Regs, Sch 1, para 1; Ch Act 2011, part 4; Charities and Trustee Investment (Scotland) Act 2005

F2034 Specified accommodation

Specified accommodation means
1. exempt accommodation
2. accommodation provided by a
2.1 county council
2.2 housing association
2.3 registered charity
2.4 voluntary organisation
in which the claimant has been placed in order to meet an identifiable need for
care, support or supervision and where he receives that care, support or
supervision.
3. accommodation for victims of domestic violence where they are managed by
3.1 local authorities
3.2 county councils
3.3 housing associations
3.4 registered charities
3.5 voluntary organisations
4. hostel accommodation provided by local authorities where care, support or
supervision is also provided

[F2035-F2037]

F2038 Tent

Tent
means (1) a moveable structure that is designed or adapted (solely or mainly) for
the purpose of sleeping in a place for any period and that is not
1. a caravan or
2. a mobile home or
3. a houseboat.
1 UC Regs, Sch 1, para 1

F2039 Upper-tier county council

Upper-tier county council means (1) a council for a county in England for each part of
whose area there is a district council.
1 UC Regs, Sch 1, para 1

F2040 Voluntary organisation « F2003

Voluntary organisation means a body, other than a public or local authority, the
activities of which are carried out on a not for profit basis (1).
1 UC Regs, Sch 1, para 1
Rent Payments

F2041 Rent payments « F3037

Subject to F2042 and F2043 rent payments are (1)
1. payments of rent
2. payments for a licence or other permission to occupy accommodation
3. mooring charges payable for a houseboat
4. where accommodation is a caravan or mobile home, payments in respect of
the site on which it stands
5. contributions by residents towards maintaining almshouses (and essential
services in them) provided by a housing association which is
5.1 a registered charity or
5.2 exempt charity under prescribed legislation (2).
1 UC Regs, Sch 1, para 2; 2 Charities Act 2011, s 3

F2042 Payments excluded from being rent payments « F2041

Rent payments do not include payments (1)
1. of ground rent
2. in respect of a tent or the site on which a tent stands
3. in respect of approved premises
4. in respect of a care home
5. which are owner occupier payments as in F2045
6. which are service charge payments as in F2050.
7. in respect of specified accommodation
Note: If a claimant lives in exempt accommodation help with housing costs will be
provided by their LA.

1 UC Regs, Sch 1, para 3

F2043 « F2041

Rent payments do not include mesne profits.
Owner-occupier payments

F2044 Owner-occupier payments « D2090

Owner-occupier payments are (1)
1. loan interest payments (F2046) or
2. alternative finance payments (F2047)

1 UC Regs, Sch 1, para 4(1)

F2045 « F2042

Owner occupier payments do not include payments which are service charge
payments as in F2050 (1).
1 UC Regs, Sch 1, para 4(2)

F2046 Loan interest payments « D2090

Loan interest payments are (1) payments of interest on a loan that is secured on the
accommodation in respect of which the claimant meets the occupation condition.
1 UC Regs, Sch 1, para 5

F2047 Alternative finance payments « D2090

Alternative finance payments (1) are payments
1. made under alternative finance arrangements, under prescribed legislation (2)
and
2. which are entered into to enable a person to acquire an interest in the
accommodation in respect of which the claimant meets the occupation
condition.
1 IT Act 07; 2 UC Regs, Sch 1, para 6

Example

Ishaq wants to buy his home but his religion forbids him from paying interest on
money loaned. A bank arranges a special scheme under which Ishaq and the bank
agree jointly to buy the property. Ishaq provides £10,000 of the purchase price and
the bank provides the balance of £90,000. Beneficial interest in the property is
shared between Ishaq and the bank. Ishaq has the right and duty to acquire the
bank's share of the property over 15 years in return for monthly payments. He also
pays an extra monthly amount for his use of the bank's share of the property.
The agreement between Ishaq and the bank is an arrangement provided specifically
to avoid payment of interest and meet Ishaq's religious needs. It is an alternative
finance payment and therefore an allowable housing costs payment.

[F2048-F2049]

Service charge payments

F2050 Service charge payments « D2090 « D2113 « F2042 « F2045 « F3037

Service charge payments are payments which (1)
1. fall within F2051
2. are not excluded as in F2052 and
3. where F2060 et seq applies, meet all the conditions set out in those
paragraphs.

1 UC Regs, Sch 1, para 7(1)

F2051 « F2050 « F2052

Service charge payments are payments which are, in whole or in part (1)
1. of, or towards, the cost of, or charges for, providing services or facilities to or
for the benefit of the people occupying the home or
2. fairly attributable to the costs of, or charges for, providing such services or
facilities connected with the accommodation as are available for the use or
benefit of persons occupying the home

1 UC Regs, Sch 1, para 7(2)

F2052 « F2050

It is irrelevant whether or not the service charge payments (1)
1. are separately identified as relating to the costs or expenses referred to in
F2051 2. are made in addition to or as part of any other payment (including a payment
that would otherwise be regarded as a rent payment)
3. are made under the same or a different agreement as that under which the
accommodation is occupied.

1 UC Regs, Sch 1, para 7(4)

F2053 « D2113

Payments are not service charge payments where (1)
1. a loan was taken out to make the payments or
2. the payments relate to services or facilities provided for the use or benefit of
anyone occupying
2.1 a tent
2.2 approved premises
2.3 a care home
2.4 exempt accommodation
Note: If a claimant lives in exempt accommodation help with housing costs will be
provided by their LA.
1 UC Regs, Sch 1, para 7(3)

[F2054-F2059]

F2060 Service charge payments in the social rented sector and for owner occupiers « F2050 « F2061 « F3037

Paragraphs F2061 - F2072 apply when calculating the amount of housing costs
element in the social rented sector and for owner occupiers (1). They do not apply to
calculations in respect of the private rented sector or temporary accommodation.

1 UC Regs, Sch 1, para 8(1)

F2061 « F2060

Service charge payments within F2060 must meet the conditions set out in F2062

F2068 « F2067

(1).

1 UC Regs, Sch 1, para 7(1)(c)

F2062 « F2061

The first condition is that the right to occupy the accommodation depends upon
paying the service charge payments (1).

1 UC Regs, Sch 1, para 8(3)

F2063

The second condition is that the service charge payments must fall into one or more
of the descriptions set out in paragraphs F2066 et seq and (but see F2071 - F2072)1.
Before deciding that a service charge is eligible the DM must be satisfied that it
comes within one of the categories at F2065 et seq.

1 UC Regs, Sch 1, para 8(4)

F2064

The third condition is that the amount of the costs and charges the service charge
payments relate to are reasonable and the services or facilities they relate to are
reasonable to provide (1).

1 UC Regs, Sch 1, para 8(5)

F2065 « F2063 « F2078

What is reasonable is a question of fact to be determined in the circumstances of
each individual case. When considering what is reasonable the DM should, for
example, take into account whether
1. the rent and service charges are above the LHA rate
2. the service charge is unreasonably high compared to other similar services in
area (although this is dealt with in chapter F3)
3. the service charge is for a luxury e.g. maintenance of a swimming pool.

F2066 « F2063

Where it appears that an owner occupier's service charges are excessive or
unreasonable to provide the DM should check that the information provided does not
contain any errors, or ineligible service charges. There is no power to refer to the
rent officer the DM should therefore consider the amounts supplied as 'reasonable'
and allow the payment to be made.

F2067

Where the claimant is in the social rented sector and the DM is examining whether
specific services are reasonable to provide, they should make reference to the lists
of eligible service charges in this guidance. Where the charge is not listed, or isn't
implied by the wording of the guidance, the service charge should be deemed
ineligible. F2068 Where the DM considers the service charges in the social rented sector are
unreasonable amounts, the decision-maker will need to check that the amount
supplied by the claimant is correct. Once the decision-maker is satisfied that the
information supplied is correct, the case should be referred to rent officers to
determine whether or not the charged amounts are excessive. UC DMs should not
make any determination themselves about the reasonability of any amounts of
service charges.
Note:
See chapter F3 for guidance relating to referrals to the rent officer.

[F2069-F2070]

F2071 Service charge payments to maintain the general standard of the accommodation « F2063

The service charge payments are for (1)
1. the external cleaning of the upper floor windows of a multi-storey building
2. other internal or external maintenance or repair of the accommodation, but
only where the payments are
2.1 separately identifiable as relating to such maintenance or repair and
2.2 payable
2.2.a
for shared ownership tenancies or
2.2.b
by owner occupiers.
1 UC Regs, Sch 1, para 8(4) Category A

F2072 Service charge payments for the general upkeep of areas of communal use « F2060

The service charge payments are for the ongoing maintenance and cleaning of, and
supply of water, fuel or any other commodity relating to the common use of, internal
or external areas including areas for reasonable facilities, examples include
1. grounds maintenance such as lawn mowing, litter removal and lighting costs
for areas of access
2. tenant parking but not extending to the manning of car parks for security purposes
3. laundry facilities
4. upkeep of internal areas of common use outside the home, such as hallways
and corridors
5. children's play areas.
1 UC Regs, Sch 1, para 8(4) Category B

F2073 Service charge payments in respect of basic communal services

The service charge payments are for the provision, on going maintenance, cleaning
or repair in connection with basic services generally available to everyone living in
the accommodation (1). Examples of service charge payments that are included in this
category are charges relating to the provision, maintenance, cleaning or repair of
1. communal lifts
2. a communal telephone, but not the cost of calls
3. secure building access for example key cards and keypad door locking mechanism
4. any additional costs for equipment, such as aerials, to access free-to-air
television and radio, but not extending to include cable, satellite or internet connections
5. refuse collection
6. CCTV but only where this applies to areas of communal use.

1 UC Regs, Sch 1, para 8(4) Category C

F2074

Where the service charge payments are for the provision of a service only the
proportion that directly relates to the time spent on providing that service will be
eligible. Where
1. a person such as a concierge, groundskeeper or caretaker, is employed to
provide any eligible service charge, then the relevant proportion of staffing
costs for this person will be eligible and
2. the terms of the claimant's tenancy, or other related agreement makes the
claimant liable to pay costs for management and administration of eligible
services, the relevant portion will be eligible.

Example

A janitor is employed to carry out a range of maintenance services and the cost of
this is £300 per week (wages plus employer pension contributions etc.). The janitor
will normally spend 20% of his time carrying out work directly related to eligible
service charges each week.
20% of the cost is £60 p/week.
There are 50 tenants. £60 divided by 50 tenants = £1.20.
The eligible weekly amount, per tenant, is therefore £1.20.

F2075 Accommodation specific service charge payments

The service charge payments are specific to the particular type of accommodation
but are limited to payments for the use of essential items contained in it (1). This will
include basic furniture or domestic appliances. This will apply only where the item or
items remain the property of the original owner and do not form part of a purchase or
part ownership agreement.
1 UC Regs, Sch 1, para 8(4) Category D

F2076 Ineligible service charge payments

No service charge payments will be included in a claimant's HCE where (1)
1. public funding is available from another source to meet the payments,
irrespective of whether the claimant has any entitlement to any such funding
or
2. the person making a payment in connection with the use of an asset acquires
the asset or any interest in it or
3. the payments relate to the costs or charges of providing of food, medical
services or personal services of any description.

1 UC Regs, Sch 1, para 8(6)

F2077

Examples of service charge payments that are excluded are charges relating to the
provision of
1. living expenses, such as heating, lighting, hot water or meals
2. personal services, such as a laundry or cleaning service
3. nursing or personal care services (help with personal hygiene, eating,
dressing etc.)
4. provision of an emergency alarm system
5. counselling, medical or support services 6
any medical expenses (including those relating to the provision of counselling) 7. transport 8. any licences or permits 9. maintenance of un-adopted roads 10. installation, maintenance or repair of any special equipment or adaptations to
the property in respect of disability or infirmity of tenants
11. individual emergency alarm systems
12. subscription or fee-based television (e.g. satellite television subscription)
13. communal social recreational areas such as gyms, bars, shops, hairdressers,
internet rooms, restaurants, café's or swimming pools
14. gardening for individual's gardens
15. intensive housing management and
16. water, sewerage and utility charges relating to anything other than communal
areas.

F2078

Any service charge that is not eligible under F2065 et seq cannot be treated as
either an owner occupier payment or a rent payment (1).
1 UC Regs, Sch 1, para 8(7)

F2079

- F2080
Liability condition

F2081 Liable to make payments « F2004

There must be a liability to make payments which is on a commercial basis and a
claimant must have the actual liability or be treated as having it. A liability to make
payments imposes legally enforceable conditions on the parties to the agreement. If
one party breaks the agreement, the other party has the right to go to court to seek
redress.

F2082

An agreement may not be on a commercial basis where it includes terms which are
not legally enforceable or which the parties do not intend to be legally enforceable.

Example

A claimant does household chores for their landlord. The chores could be
considered as payments in kind and the rental agreement a commercial one if when
the tenant
1. does household chores for their landlord they pay a lower rent
2. does not do household chores they have to pay a higher rent.

F2083

Charging a low rent does not on its own make an agreement non-commercial. Many
charities, voluntary bodies and some individuals, choose to let properties at below
market rents or do not want to make a profit from letting, but their tenancies may still
be commercial arrangements if that is what the parties to the agreement intend.

F2084

The DM must decide whether the liability to make payments is on a commercial or
non commercial basis as a question of fact based on all the evidence.

[F2085-F2086]

Treated as liable to make payments

F2087 Certain other persons liable to make payments « F2004 « F2088

A claimant will be treated as liable to make payments where the person who is liable
is (1)
1. any child or QYP the claimant (or if the claimant is a member of a couple,
either member) is responsible for or
2. where the claimant is a member of a couple claiming as a single person, the
other member of the couple.

1 UC Regs, Sch, 2 para 1(1)

F2088

F2087 will not apply to a person who is claiming as a single person where they are a
party to a polygamous marriage (1).

Example

Abdul, Alkha and Fatima are parties to a polygamous marriage and make a claim to
UC. Fatima is Abdul's second wife. Abdul and Alkha (his wife he married first) will
make a joint claim to UC to form their own benefit unit. Fatima claims UC as a single
person. Abdul cannot be treated as liable for any relevant payments that Fatima is
liable to make.
1 UC Regs, Sch 2, para 1(2)

F2089 Failure to pay by the person who is liable

A claimant is treated as liable (1) to make payments where
1. the person who is liable is not making payments and
2. the claimant has to make payments in order to continue to live in the
accommodation and
3. the claimant's circumstances are such that it would be unreasonable to expect
them to make other arrangements and
4. it is reasonable to treat the claimant as liable to make the payments.
1 UC Regs, Sch 2, para 2(1); 2, para 2(2)

Example 1

Harry lives with his mother who has a mortgage on their home. Harry's mother dies
and her estate becomes liable to meet the mortgage payments. But she did not
leave a will and her estate is not making any payments. The building society cannot
transfer the mortgage to Harry until his mother's estate is settled. But they agree that
if Harry pays the mortgage he can carry on living in the home. It is reasonable to
treat Harry as liable for the payment of mortgage interest and housing costs for
mortgage interest are allowed.

Example 2

Judith lives in a two bedroom house which she rents from a private landlord. She
goes to court and is convicted and sentenced to a prison sentence. Her brother Tony
moves into the property whilst she is in prison. Tony cannot be treated as a liable to
make the payments as he did not live in the property prior to the prison sentence and
therefore would not be continuing to live there.

F2090

When determining what is reasonable for owner-occupiers, consideration has to be
given to the fact that continuing to make the payments may benefit the person with
liability to make the payments (1).
1 UC Regs, Sch 2, para 2(3)

Example 1

Layla and John live together in a two bedroom property with their daughter. The
mortgage is solely in John's name as he owned the property before they became a
couple. They split up and are no longer a couple. John moves out and rents a one
bedroom flat. He is unable to pay the mortgage but is taking steps to sell it. They
were joint claimant's prior to the split. It is decided that the HCE can be included in
Layla's subsequent new claim to UC.

Example 2

Caroline and Paul live together in a one bedroom flat. The mortgage is in Caroline's
sole name. They split up and Caroline moves in with her parents. She refuses to pay
the mortgage whilst Paul still lives in the property. It is decided that as Caroline could
still pay the mortgage no amount of HCE will be included in Paul's UC claim.

[F2091-F2100]

F2101 Payments waived in return for repair work

A claimant will be treated as liable to make payments where (1) the liability to make
them is waived
1. by the person to whom the liability is owed and
2. by way of reasonable compensation for reasonable repair or re-decoration
works carried out by the claimant which the person to whom the liability is
owed would have carried out or been required to carry out.
1 UC Regs, Sch 2, para 3

F2102 Rent free periods

A claimant will be treated as still liable to make rent and service charge payments
during any rent free periods provided for in his rental agreement (1) (see F3101).
1 UC Regs, Sch 2, para 4

[F2103-F2104]

Treated as not liable to make payments

F2105 Liability to make rent payments to close relative « F2004 « F2106 « F2132 « F2151

A claimant will be treated as not liable to make rent payments where the liability is
owed to a person who lives in the accommodation and who is (1)
1. the other member of the couple, if the claimant is a member of a couple or
2. any child or QYP for whom
2.1 the claimant is responsible or
2.2 the other member of the couple is responsible, if the claimant is a
member of a couple or
3. a close relative of
3.1 the claimant or
3.2 the other member of the couple, if the claimant is a member of a couple
or
3.3 any child or QYP in 2. above.

1 UC Regs, Sch 2, para 5(1)

F2106

A claimant who is treated as not liable to make rent payments to a person in F2105
is also treated as not liable to make service charge payments where the liability is to
the same person (1).
1 UC Regs, Sch 2, para 5(2)

Example

Gary lives with his brother Dave in his two bedroom flat. Dave charges his brother
for the use of a bedroom. Dave is treated as not liable for the rent his brother
charges him and is also treated as not liable for any service charges his brother
imposes on him.

F2107

Close relative has the meaning given in X-ref to relevant chapter

F2108 Liability to make rent and other payments to a company « F2109 « F2109 « F2110

A claimant will be treated as not liable to make rent payments where (1) their liability to
make rent payments is to a company and the owners or directors of the company include
1. the claimant
2. in the case of a claimant who is a member of a couple the other member of
the couple
3. a QYP either the claimant or the other member of a couple is responsible for,
or
4. a close relative of any of the above who lives with the claimant.

1 UC Regs, Sch 2, para 6(1)

F2109

A claimant who is treated as not liable to make rent payments to a company in F2108is also treated as not liable to make service charge payments where the
liability is to (1)
1. the same company or
2. another company of which the owners or directors include anyone listed in
F2108.

1 UC Regs, Sch 2, para 6(2)

F2110

An owner of a company for the purposes of F2108 is a person who has a material
interest in the company (1).

1 UC Regs, Sch 2, para 6(3)

F2111 « F2112 « F2116

A person has a material interest in the company if they (1)
1. hold at least 10% of the shares in the company or
2. are able to exercise a significant influence over the management of the
company because of their shareholding in the company or
3. hold at least 10% of the shares in a parent undertaking of the company or
4. are able to exercise a significant influence over the management of a parent
undertaking because of their shareholding in the parent undertaking or
5. are entitled to exercise, or control the exercise of, voting power in the
company which, if it consists of voting rights, constitutes at least 10% of the
voting rights in the company or
6. are able to exercise significant influence over the management of the
company because of their entitlement to exercise, or control the exercise of,
voting rights in the company or
7. are entitled to exercise, or control the exercise of, voting power in the parent
undertaking which, if it consists of voting rights, constitutes at least 10% of the
voting rights in the parent undertaking or
8. are able to exercise significant influence over the management of the parent
undertaking because of their entitlement to exercise, or control the exercise
of, voting rights in the parent undertaking.

1 UC Regs, Sch 2, para 6(4)

F2112 « F2113

In F2111 a person is an owner of a company where the material interest is held by
1. them or
2. any of the their associates or.
3. them and any of the their associates taken together (1).

1 UC Regs, Sch 2, para 6(5)

F2113 « F2114

In F2112 "associate", in relation to a person ("A") holding shares in an undertaking
(X") or entitled to exercise or control the exercise of voting power in relation to
another undertaking ("Y"), means (1)
1. the spouse or civil partner of A
2. a child or stepchild of A (if under 18)
3. the trustee of any settlement under which A has a life interest in possession
(in Scotland a life interest)
4. an undertaking of which A is a director
5. a person who is an employee or partner of A
6. if A has with any other person an agreement or arrangement with respect to
the acquisition, holding or disposal of shares or other interests in X or Y, that
other person
7. if A has with any other person an agreement or arrangement under which they
undertake to act together in exercising their voting power in relation to X or Y,
that other person.

1 UC Regs, Sch 2, para 6(6)

F2114

In F2113 settlement means (1) any disposition or arrangement under which property is
held on trust (or subject to comparable obligation).

1 UC Regs, Sch 2, para 6(7)

F2115

Parent undertaking has the same meaning as in prescribed legislation (1).

1 UC Regs, Sch 2, para 6(8); 2 Financial Services and Markets Act 2000, s 420

F2116

In F2111 shares means (1)
1. in relation to an undertaking with shares, allotted shares within the meaning of
the specified legislation (2)
2. in relation to an undertaking with capital but no share capital, rights to share in
the capital of the body
3. in relation to an undertaking without capital, interests
3.1 conferring any right to share in the profits, or liability to contribute to the
losses, of the body or
3.2 giving rise to the an obligation to contribute to the debts or expenses of
the undertaking in the event of a winding up.

1 UC Regs, Sch 2, para 6(8); 2 Companies Act 2006, part 17

F2117

Voting power, in relation to an undertaking which does not have general meetings at
which matters are decided by the exercise of voting rights, means (1) the rights under
the constitution of the undertaking
1. to direct the overall policy of the undertaking or
2. to alter the terms of its constitution.
1 UC Regs, Sch 2, para 6(8)

[F2118-F2120]

F2121 Liability to make rent or other payments to a trust « F2122 « F2122 « F2213

A claimant will be treated as not liable to make rent payments where the liability is
owed to a trustee of a trust and the trustees or beneficiaries of the trust include (1)
1. the claimant
2. if the claimant is a member of a couple, the other member of the couple or
3. a child or QYP either the claimant or the other member of a couple is
responsible for, or
4. a close relative of any of 1. to 3. above who lives with the claimant.

1 UC Regs, Sch 2, para 7(1)

F2122

A claimant treated as not liable in F2121 will also be treated as not liable for any
service charge payments where that liability is to
1. a trustee of the same trust or
2. a trustee of another trust of which the trustees or beneficiaries include anyone
listed in F2121.
1 UC Regs, Sch 2, para 7(2)
Note: See chapter G1 for more guidance on the meaning of a trust.

[F2123-F2130]

F2131 Liability to make owner-occupier and other payments to members of the same household

A claimant will be treated as not liable to make owner-occupier payments where the
liability is to any person living in the claimant's household (1).
1 UC Regs, Sch 2, para 8(1)
Note:
Living with and household has the meaning given in chapter D2.

F2132

A claimant who is treated as not liable to make the payments in F2105 et seq is also
treated as not liable to make service charge payments where the liability is to the
1
same person .

1 UC Regs, Sch 2, para 8(2)

F2133

A claimant will be treated as not liable to make service charge payments where the
claimant is (1)
1. not liable to make rent or owner-occupier payments but
2. liable to make service charge payments to any person living in the claimant's
household.
1 UC Regs, Sch 2, para 8(3)
F2134 - F2140

F2141 Arrears of payment

A claimant will be treated as not liable to make a payment or payments in respect of
any amount which is (1)
1. an increase in the sum that would otherwise be payable and
2. the result of
2.1 outstanding arrears of any payment or charge in respect of the accommodation
2.2 outstanding arrears of any payment or charge in respect of another
accommodation previously occupied by the claimant
2.3 any other unpaid liabilities to make a payment or charge.

1 UC Regs, Sch 2, para 9(1)

[F2142]

F2141does not apply if the claimant is treated as not liable to make the payment or
payments (1).
1 UC Regs, Sch 2, para 9(2)

Example 1

Tyrion rents a 2 bedroom flat, his rental payments are £400.00 a month. Prior to his
claim to UC he was 6 months behind with his rental payments. His landlord takes
him to court and his rent is adjusted to £420.00 a month. His housing costs element
of UC will be calculated on his original rental payments of £400.00.

F2143

Any loan secured on the owner-occupier's property (for any reason, including a re-
mortgage to roll up arrears of interest) can be eligible for inclusion in the calculation
of the HCE and does not represent an increase in the sum that would be otherwise
payable (1). The loan interest payment would still be subject to the capital limit in
chapter F4. Any unsecured loan cannot be eligible for inclusion in the calculation of
the HCE.
1 UC Regs, Sch 1, para 5 & Sch 2, para 9

Example 1

Arya has a mortgage on her two bedroom terraced house. The mortgage secured on
the property is £72,000.00. Arya has defaulted on 5 mortgage payments, a total of
£2,500, and the lender has added those arrears to her outstanding mortgage. When
information is gathered to make the HCE calculation, this shows the outstanding
loan secured on her home is £74,000. Her HCE for UC will be calculated on the
£74,500 balance.

Example 2

Arya decides to pay off the arrears of mortgage of £2,500 by credit card. The loan
from the credit card company is not secured on her property so cannot be included
in the HCE.

F2144

After HCE is awarded, any further increase in the total amount owing on loans
secured on the property for arrears (or for any other reason) during the currency of
an award, whether by increasing the existing loan or on account of a new loan, can
only increase the HCE from the anniversary date set out in chapter F4. Similarly,
decreases in the total amount owed can only decrease the HCE from the
anniversary date. The loan interest payment would be subject to the capital limit in
chapter F4.

Example

After HCE is awarded, Ayra's mortgage builds up arrears at the rate of £20.00 a
month because her interest rate is higher than the SR, and the lender adds that
amount to her mortgage which is secured on the property. The arrears are allowable
but only from the next anniversary date. The loan interest payment would be subject
to the capital limit in chapter E4.

[F2145-F2150]

F2151 Contrived liability

A claimant will be treated as not liable to make any payment or payments where the
DM is satisfied that the claimant's liability to make the payments was contrived (1) in
order to
1. secure the HCE in an award of UC or
2. increase the amount of the HCE in an award of UC.

1 UC Regs, Sch 2, para 10(1)

[F2152]

F2151does not apply if the claimant is treated as not liable to make the payment or
payments because of F2105 et seq (1).

1 UC Regs, Sch 2, para 10(2)

F2153

Contrivance can be on the part of the claimant, the person to whom payments are
made, or both acting together. There must be something about the arrangements
relating to the liability that indicates it seeks to abuse the HCE of UC. It is the DM's
responsibility to show such arrangements exist before deciding that abuse is
involved. This means the DM must establish the facts and determine the dominant
purpose of the arrangement before deciding to treat that person as not liable to
make the payment.

F2154

Account must be taken of all the available evidence when making a decision that a
liability has been created to abuse the HCE of UC.

F2155

The issue is not whether a liability exists, but whether a liability was created to abuse
the housing costs element of UC. The DM must decide whether a liability exists
before considering whether or not it is contrived, although the two questions often
involve considering the same facts.

F2156

The DM should also look for arrangements the claimant has entered into
1. which create a liability they cannot meet without the HCE of UC and
2. when they could have avoided the situation and still been adequately
accommodated.

F2157

This would not normally be the case when, for example, even though they rely on
HCE of UC to help meet their liability to make relevant payments a person
1. previously had no accommodation or
2. has moved home
2.1 to take up work because they could not travel to work from their
previous address or
2.2 because their family was overcrowded at their previous address
2.3 but the move does not result in an increased amount of HCE.

[F2158-F2160]

Occupation condition
General

F2161 The occupation condition: the general rule « F2005

A claimant is to be treated as occupying as their home the accommodation they
normally occupy as their home (1).

1 UC Regs, Sch 3, para 1(1)

F2162

The dwelling normally occupied as the home is the accommodation where the
claimant normally lives. In this context "normally" means "usually".

F2163

Unless F2171 et seq apply no claimant is to be treated as occupying
accommodation that comprises more than one dwelling (1). Dwelling has the meaning
given in prescribed legislation (2).

1 UC Regs, Sch 3, para 1(2); 2 Local Government Finance Act 1992, part 1 & 2

F2164

Where F2171 et seq do not apply the DM must have regard to all the circumstances
to determine which accommodation the claimant normally occupies as their home,
including (but not limited to) any persons with whom the claimant occupies each
dwelling (1).

1 UC Regs, Sch 3, para 1(3)

F2165

In the following paragraphs accommodation the claimant normally occupies as their
home will be referred to as their home unless otherwise stated.

F2167 Croft land included in accommodation

Where the claimant's home is situated on or relates to a croft (1), croft land used for
the purpose of their home is to be treated as included in their home (2).
1 Crofters (Scotland) Act 93; 2 UC Regs, Sch 3, para 2

[F2168-F2170]

F2171 Other accommodation for essential repairs « F2163 « F2164 « F2172 « F2173 « F2211

A claimant who
1. has to move into other accommodation so that essential repairs can be
carried out to their home
2. intends to return to their home following the repairs and
3. is liable to pay for only one home
shall be treated as normally living in the home which meets all of the conditions 1. to
3. above (1) .

1 UC Regs, Sch 3, para 3(1)

F2172 « F2173

Where a claimant has moved into other accommodation in the circumstances set
out in F2171 but is liable to pay for both homes the DM must decide which the
claimant normally occupies as his home (1).

1 UC Regs, Sch 3, para 3(2)

F2173

In F2171 and F2172 essential means necessary and not a luxury.

[F2174-F2180]

F2181 Claimant housed in two homes by provider of social housing

Where a claimant
1. has been housed in two homes by a provider of social housing (see chapter ), because of the number of children and QYPs living with them and
2. normally occupies both homes with the children and QYPs and
3. is liable to make payments for both homes (the liability need not be to the
same person)
both homes will be treated as a single home (1).
1 UC Regs, Sch 3, para 4

Example

Joanne is liable to pay rent for two flats. She has had a tenancy of the first flat since
March 2012 provided by her housing association. As she has a large family she is
provided a second flat by her local authority in another block in August 2013. She
stays over night at the original flat with her youngest two children and her husband
stays overnight at the other flat with the other children. Although Joanne lives in two
separate flats the flats are treated as a single home for the purposes of the housing
costs element of UC.
Moving home

F2182 Adaptations to new home for disabled person « F2183 « F2184

[See memo ADM 6 14 [not found]] A claimant is to be treated as occupying both the new home
and their old home if
1. the claimant has moved into a new home and immediately before the move
was liable to pay for the new home and
2. there was a delay in moving in that was necessary to enable the new home to
be adapted to meet the disablement needs of a person referred to in F1183,
see F2185 and
3. immediately before the move the claimant was entitled to the housing costs
element in an award of UC in respect of the old home and
4. the delay in moving was reasonable (1).

1 UC Regs, Sch 3, para 5(1) & (2)

F2183 « F2185 « F2201 « F4090

The people referred to in F2182
1. are 1
1.1 the claimant
or
1.2 any child or QYP for whom the claimant is responsible and
2. are in receipt of
2.1. the care component of DLA at the middle or highest rate
2.2 "AA"
2.3 the daily living component of a PIP.
1 UC Regs, Sch 3, para 5(3)

Example 1

Jane has diabetes and delayed her move to redecorate the house to a style she
liked. This was not an adaptation necessary to meet her disability needs and she
cannot be treated as occupying both homes.

Example 2

Joseph lost the use of his legs in a car accident. He delayed moving into his new
bungalow because it requires adaptations to be undertaken to the kitchen and
bathroom to enable Joseph to live independently. Once Joseph moves into the new
property he can be treated as occupying both homes for the preceding month whilst
the necessary work was being carried out.

F2184

No claimant shall be treated as occupying both homes under F2182 for more than
one month (1).

1 UC Regs, Sch 3, para 5(4)

F2185 « F2182

To determine whether the dwelling has been adapted to meet the disablement
needs of the person referred to in F2183 consideration has to be given to whether
the process which the dwelling had undergone was a change that made it more
suitable for the needs of the disabled person. Redecoration and changing the floor
coverings are examples of changes which could meet the definition of adapting the
dwelling where there is a clear connection between the work undertaken and the
person's disability needs (1).
1 Mahmoudi, R v London Borough of Lewisham & Anor [2014] EWCA Civ 284.

Example 1

Benson has significant difficulties with balance and coordination. He currently lives
on an upper floor in a block with no lift access, and is moved by his housing
association to a ground floor flat. This flat currently has polished wooden floors,
which would be a health hazard to Benson due to his condition. His move to the new
address is delayed for a week to allow the polished floors to be covered by carpets.
He claims a dual payment of rent for his new property for the week before he moves
in. The DM decides that Benson is eligible for benefit on two homes as the delay in
moving is reasonable, there is a clear connection between the adaptations being
made and Benson's disablement needs, and the works are reasonably required
before he is able to move in.

Example 2

Yasmin, who is wheelchair bound, is moving from her present owner-occupied
house to a single-floor dwelling. It has been left in poor condition by the previous
tenant and so must be fully redecorated before Yasmin is able to move in. She
makes a claim for rent to be awarded for the first two weeks of her tenancy before
she takes up occupation. The DM refuses her request as, although the delay in
moving is reasonable, there is no connection between her disability and the works
which are being carried out.

Example 3

Karen suffers from obsessive compulsive disorder and has anxiety problems. She
has been allocated a property by her local authority, which is being thoroughly
repainted and having its carpets replaced with tiling so that it is easier for her to keep
clean. Karen requests rent for the first two weeks of her tenancy whilst she is waiting
for the redecorations to be completed. The DM allows her claim as there is a direct
connection between the work being carried out and her disability. The Upper
Tribunal has ruled that "disablement" includes mental as well as physical conditions
and it is necessary for the works to be carried out before she moves in to prevent
Karen from suffering distress.

[F2186-F2190]

F2191 Claimant living in another accommodation because of reasonable fear of violence « F2193 « F2213

A claimant will be treated as normally occupying both their normal home and other
accommodation where (1)
1. they are occupying another accommodation than their normal home and
2. they are liable to make payments for both their normal home and the other
accommodation and
3. they intend to return home and
4. it is unreasonable to expect the claimant to return to their normal home
because of their reasonable fear of violence in the home or by a former
partner against
4.1 the claimant or
4.2 any child or QYP for whom the claimant is responsible (1).
5. it is reasonable to include an amount of the HCE for both the other
accommodation and their normal home.
Note:
Where the claimant is treated as occupying their usual home, but who is
actually occupying "exempt accommodation", such as a refuge, any costs for that
accommodation will be met by the LA, where appropriate, and not under UC.

1 UC Regs, Sch 3, para 6(1) & (2)

F2192

A claimant will be treated as normally occupying the accommodation for which they
are liable to make payments where (1)
1. they are occupying another accommodation than their normal home and
2. they are liability to pay for either their normal home or for the other
accommodation (but not both) and
3. they intend to return to their normal home and
4. it is unreasonable to expect the claimant to return to their normal home
because of their reasonable fear of violence in the home or by a former
partner against
4.1 the claimant or
4.2 any child or QYP for whom the claimant is responsible (1).
5. it is reasonable to include an amount of the HCE for the accommodation for
which there is a liability to make payments.

1 UC Regs, Sch 3, para 6(3)

F2193

Where F2191 applies no claimant shall be treated as occupying both their normal
home and another accommodation for more than 12 months (1).
1 UC Regs, Sch 3, para 6(4)

[F2194-F2200]

F2201 Moving in delayed by adaptations to home to meet disablement needs « F2203 « F2203

F2202 Moving into accommodation following stay in hospital or care home « F2203

Where a claimant has moved into a property they are treated as occupying that
property as their home for up to 1 month before the date they actually moved in
where (1)
1. they have moved into the home and immediately beforehand were liable to
make payments for the home and
2. the liability to make payments arose while they were
2.1 a patient or
2.2 accommodated in a care home or
2.3 in the case of joint claimants while both joint claimants were
2.3.a
patients or
2.3.b
accommodated in a care home.
Note
1: Patient means a person who is undergoing medical or other treatment as an
in-patient in any hospital or similar institution.
Note
2: See F2032 for the meaning of care home.
1 UC Regs, Sch 3, para 8

Example

Jackie is in hospital having treatment for a long term illness. She gave up her
tenancy prior to being admitted to hospital. She is due to be discharged and finds a
property to rent. She finds the property in the month before being discharged. The
property is a bungalow and is suitable for her to live in once she is discharged. On
the day she moves in she is treated as occupying the home for the month previously.

F2203

`Treated as occupying the home' from F2201 onwards does not allow for payments
on two properties so in F2201 - F2202 the claimant cannot already be receiving the
HCE in respect of another address.

[F2204-F2210]

Treated as not occupying the home

F2211 Periods of temporary absence exceeding 6 months « F2005

A claimant will be treated as no longer occupying their home where they are
temporarily absent and the absence exceeds, or is expected to exceed 6 months (1) .

1 UC Regs, Sch 3 para 9(1)

[F2212]

F2211does not apply where a claimant is temporarily absent due to essential
repairs as in F2171 et seq (1) .

1 UC Regs Sch 3 para 9(2)

F2213

In the circumstances set out in F2191 et seq the period in F2121 is 12 months (1) .
1 UC Regs, Sch 3, para 9(3)