The Income-related Benefits (Subsidy to Authorities) Amendment Order 2004

• Citation: S.I. 2004/646
• Sections: 9

Section 1 Citation, commencement, interpretation and extent

(1) This Order may be cited as the Income-related Benefits (Subsidy to Authorities) Amendment Order 2004 and comes into force on 1st April 2004.

(2) In this Order “the 1998 Order ” means the Income-related Benefits (Subsidy to Authorities) Order 1998 .

(3) This Order extends to England and Wales.

Section 2 Amendment of the 1998 Order

The 1998 Order is amended in accordance with the Schedule to this Order.

Section 1

In article 2 (interpretation of Parts 2 and 4) there is inserted in the appropriate place—

“base data return” means a return pursuant to article 4(4A);

Section 2

In article 4 (requirement for claim)—

(a) after paragraph (4) there is inserted—

(4A) In addition to the above returns, an authority in England shall submit to the Secretary of State at the relevant office, on the form supplied by him to the authority and not later than 31st August in the year before the relevant year, a return giving details in relation to subsidy in respect of rebates granted to tenants of dwellings within the authority’s Housing Revenue Account.

(4B) An authority in Wales shall—

(a) if required to do so by the Secretary of State, submit to him, at the relevant office, in any of the above claims or returns, or

(b) if required to do so by the Secretary of State or the National Assembly for Wales, submit to him or, as the case may be, to them, at the relevant office, by way of an additional return on such form as is supplied by him or them to that authority and not later than such date as he or they may require,

details in relation to subsidy in respect of rebates granted to tenants of dwellings within the authority’s Housing Revenue Account.

(b) in paragraph (5)(a) for the words “the officer” onwards there are substituted the words “the authority’s chief finance officer, as defined in section 5(8) of the Local Government and Housing Act 1989, or an officer to whom that officer has made a formal delegation”.

Section 3

In article 6(1) before paragraph (a) there is inserted—

(ia) shall, in the case of an authority in England, procure that their base data return is audited by the authority’s auditor and that the audited return is submitted to the Secretary of State at the relevant office by 10th October in the year before the relevant year;

Section 4

In article 11(1) in the definition of “rebate” the words “excluding in the case of England and Wales, any Housing Revenue Account rebates” are omitted.

Section 5

In article 13(1) (the subsidy to be paid to an authority) in the words following sub-paragraph (b) for the words “articles 20 and 21(3)” there are substituted the words “articles 20, 20A and 21(3)”.

Section 6

After article 20 the following article is inserted—

Deductions from subsidy for rebate for dwellings within the Housing Revenue Account

(20A)

(1) This article applies—

(a) in the case of an authority in England, where paragraph 2 of Schedule 4A applies, and

(b) in the case of an authority in Wales, where paragraph 4 of that Schedule applies.

(2) Where this article applies the deduction from subsidy referred to in article 13(1) shall be calculated—

(a) in the case of an authority in England, in accordance with paragraph 3 of Schedule 4A, and

(b) in the case of an authority in Wales, in accordance with paragraph 5 of that Schedule.

Section 7

After Schedule 4 the following Schedule is inserted—

RENT REBATE LIMITATION DEDUCTIONS (HOUSING REVENUE ACCOUNT DWELLINGS)

INTERPRETATION

(1) In this Schedule—

“ HRA ” means the Housing Revenue Account of the authority the amount of whose subsidy is under consideration,

“new service” means—

a service provided in the relevant year that was not provided in 2001–02,

an extension made after 2001–02 to a service provided in that year, or

a service provided in the relevant year for which a charge is imposed which is a service which was previously provided without charge because it was funded by a specific grant or subsidy (other than HRA subsidy),

“rent”, in relation to a dwelling, means the total of the payments in respect of the dwelling specified in regulation 10(1) of the Housing Benefit Regulations, other than a payment specified in regulation 10(1)(e),

“service charge”, in relation to a dwelling, means a payment in respect of the dwelling specified in regulation 10(1)(e) of the Housing Benefit Regulations which—

is eligible for housing benefit at the time it is paid, and

is not of a type which was specified in paragraphs 2 to 4 of Schedule 1B to the Housing Benefit Regulations while regulation 9 of the Housing Benefit (General) Amendment ( No. 3) Regulations 1999 (which inserted that Schedule) had effect,

“void dwelling” means a dwelling that is unoccupied,

“2001–02” means the year beginning with 1st April 2001 (and any corresponding expression in which two years are similarly mentioned is to be read in the same way).

ENGLAND

Liability to deduction

(2)

(1) This paragraph applies in the case of an authority in England in relation to the relevant year if the authority is specified in the Table in Part 3 of this Schedule for that year and the weekly rent limit for a dwelling that is so specified for the authority is less than the subsidy limitation rent.

(2) The subsidy limitation rent for an authority is equal to

where—

is the average weekly rent for a dwelling for the authority for the relevant year (see sub-paragraph (3)),

is the average weekly unpooled service charges for the authority for the relevant year (see sub-paragraph (4)), and

is the annual factor (see sub-paragraph (7)).

(3) For the purposes of sub-paragraph (2), the average weekly rent for a dwelling for the authority for the relevant year is calculated by—

(a) dividing the total rent charged for dwellings in the HRA in that year by the total number of dwellings in the HRA in that year, and

(b) dividing the result by the total number of weeks in that year.

(4) For the purposes of sub-paragraph (2), the average weekly unpooled service charges for the authority are calculated as follows—

Step 1

Find the average weekly service charge for a dwelling for the authority for the relevant year by—

dividing the total service charges imposed in respect of dwellings in the HRA in that year by the total number of dwellings in the HRA in that year, and

dividing the result by the total number of weeks in that year.

Step 2

Find the average weekly service charge for a dwelling for the authority for the year 2001–02 by—

dividing the total service charges imposed for that year in respect of all dwellings that are both in the HRA in that year and in the relevant year by the number of dwellings in the HRA for the relevant year, and

dividing the result by the total number of weeks in the relevant year.

Step 3

Multiply the result of step 2 by the GDP deflator for the period beginning with the year 2001–02 and ending with the relevant year (see sub-paragraph (6)).

Step 4

Find the average weekly service charge for new services for a dwelling for the authority for the relevant year by—

dividing the total charges for new services imposed for that year by the number of all dwellings in the HRA in that year, and

dividing the result by the total number of weeks in that year.

Step 5

If the result of step 1 exceeds the sum of the results of steps 3 and 4, deduct the sum of those results from the result of step 1.

If the result of step 1 does not exceed the sum of the results of steps 3 and 4, the average weekly unpooled service charges for the authority are nil.

(5) For the purposes of sub-paragraphs (3) and (4), void dwellings are disregarded.

(6) The GDP deflator for the period beginning with the year 2001–02 and ending with 2004–05 is 1.0738.

(7) The annual factor for 2004–05 is 0.7.

Amount of deduction

(3)

(1) The amount of the deduction from subsidy referred to in article 20A(2) shall be calculated as follows.

Step 1

Divide the amount of rebates paid by the authority in the relevant year in respect of dwellings in the HRA by the income of the authority for that year from rent and service charges (including rent and charges remitted by way of rebate) in respect of such dwellings.

Step 2

If the result of step 1 does not exceed the rebate proportion in England for the relevant year (see sub-paragraph (3))—

divide the weekly rent limit for a dwelling for the authority for the relevant year as specified in Part 3 of this Schedule by the subsidy limitation rent (see paragraph 2(2)),

subtract the result of paragraph (a) from the number 1, and

multiply the amount of the subsidy (apart from any deduction to be calculated under this Schedule) by the result of paragraph (b).

If the result of step 1 exceeds the rebate proportion in England for the relevant year—

multiply the amount by which the subsidy limitation rent exceeds the weekly rent limit for a dwelling for the authority for the relevant year as specified in Part 3 of this Schedule by the rebate proportion in England for the relevant year,

multiply the subsidy limitation rent by the result of step 1,

divide the result of paragraph (i) by the result of paragraph (ii), and

multiply the amount of the subsidy (apart from any deduction to be calculated under this Schedule) by the result of paragraph (iii).

(2) For the purposes of the calculation in sub-paragraph (1), void dwellings are to be disregarded.

(3) The rebate proportion in England for 2004–05 is 0.61.

WEEKLY RENT LIMITS FOR PURPOSES OF PART 2: AUTHORITIES IN ENGLAND

RELEVANT YEAR 2004–05

WALES

Liability to deduction

(4) This paragraph applies in the case of an authority in Wales in relation to the relevant year if the authority is specified in the Table in Part 5 of this Schedule for that year and

where—

is the amount specified in column 1 of that Table for the authority,

is the guideline rent increase specified in column 2 of that Table for the authority, and

is the average weekly rent for a dwelling for the authority for the relevant year (see paragraph 2(3)).

Amount of deduction

(5)

(1) The amount of the deduction from subsidy referred to in article 20A(2) shall be calculated as follows.

Step 1

Divide the amount of rebates granted by the authority in the relevant year in respect of dwellings in the HRA by the income of the authority for that year from rent (including rent remitted by way of rebate) in respect of such dwellings.

Step 2

If the result of step 1 does not exceed the rebate proportion for the relevant year (see sub-paragraph (2))—

deduct (O + P) from Q (see paragraph 4),

divide the result of paragraph (a) by Q,

multiply the amount of the subsidy (apart from any deduction to be calculated under this Schedule) by the result of paragraph (b).

If the result of step 1 exceeds the rebate proportion for the relevant year—

deduct (O + P) from Q (see paragraph 4),

divide the result of paragraph (i) by Q,

divide the rebate proportion for Wales (see sub-paragraph (2)) by the result of step 1,

multiply the result of paragraph (ii) by the result of paragraph (iii),

multiply the amount of the subsidy (apart from any deduction to be calculated under this Schedule) by the result of paragraph (iv).

(2) The rebate proportion for Wales for each relevant year commencing with 2004–05 is 0.66.

AMOUNTS FOR PURPOSES OF PART 4, PARAGRAPH 4:AUTHORITIES IN WALES

RELEVANT YEAR 2004–05