Universal Credit and service charges

Universal Credit and service charges:

The short answer is yes, but only in limited circumstances and only certain types of service charges.

Housing costs element of Universal Credit:

Universal Credit can include a "housing costs element" which covers rent and certain service charges for people who rent their home. However, what counts as an eligible service charge is quite tightly defined.

Eligible service charges:

The Universal Credit Regulations 2013, specifically regulation 26 and Schedule 1, set out which service charges can be included. Eligible service charges generally include charges for:

1. Maintaining the general standard of the accommodation, such as internal and external repairs and maintenance of the building.
2. Cleaning of communal areas.
3. Supply of water, fuel, or other commodities connected with the accommodation (though personal use charges for fuel are excluded).
4. Charges connected with the provision of basic services such as refuse collection, sewerage, and laundry facilities in communal areas.

Ineligible service charges:

Service charges that are not covered include:

1. Personal charges for fuel, meals, or personal laundry.
2. Charges for medical, personal care, or counselling services.
3. Charges for sports or leisure facilities.
4. Charges that are excessive or not connected with the provision of adequate accommodation.
5. Reserve fund contributions (sinking fund payments) are generally not eligible.

Important practical points:

If you are a leaseholder (not a renter), the position is different. Universal Credit housing costs for owner-occupiers are limited to support for mortgage interest (now provided as a loan) and do not generally cover service charges payable under a lease.

If you are a tenant and your landlord charges service charges as part of or in addition to rent, you should ensure your landlord or housing provider has broken down the charges clearly, as the DWP will assess eligibility line by line.

If your Universal Credit award does not include service charges that you believe should be eligible, you can request a mandatory reconsideration and, if necessary, appeal to the First-tier Tribunal (Social Entitlement Chamber).

Would you like more detail on any particular aspect, for example whether you are a tenant or leaseholder, or help challenging a decision?