The Housing and Planning Act was passed on 12 May 2016. The Act introduced a number of new measures including higher rents for higher income local authority tenants (also known as pay to stay). Over the coming weeks we will be working through the detail and posting more information. In the meantime the information currently available is shown below to answer a few of the questions you may have.
What is a higher income?
A higher income is taxable income of more than £40,000 in London. This figure will be amended yearly in line with inflation.
Whose income is included?
Tenants, joint tenants, their civil partners, partners or spouses. Family members are excluded unless they are joint tenants (which is rare).
What about tenants on housing benefit?
Tenants on Housing Benefit and universal credit (UC) are excluded as well as those who would be eligible for housing benefit if their rent was increased.
How do local authorities find out their tenants income?
Local Authorities will contact their tenants who are not on Housing Benefit and ask them to provide their income details. Tenants are required to declare their income to their landlord.
What happens if tenants do not provide proof of their income?
Tenant who do not provide income details will have their rents increased to the higher rent from April 2017.
How is the higher rent calculated?
For every £1 of taxable income above £40,000 an extra 15p will be payable over the year. So for an income of £41,000 an extra £2.88 pence per week is payable
What happens to the extra income?
Local authorities are required to return the additional rent collected to the government but are allowed to deduct the cost of administering the scheme first.
When does the higher rent become payable?
The higher rents may apply from April 2017.