Referencing tenants on benefits
Short answer: since 1 May 2026, landlords in England can't refuse a tenant because they receive benefits — the Renters' Rights Act 2025 bans it, and councils can fine up to £7,000. You can still decline an applicant whose income doesn't cover the rent. The rule is that you assess them exactly as you assess everyone else.
The distinction that matters
The law bans treating someone differently because of where their income comes from, not deciding on how much it is. Declining an applicant because their total income genuinely fails an affordability standard you apply to everybody is lawful. Declining them because the income is Universal Credit is not.
What changed on 1 May 2026
The Renters' Rights Act 2025 made it unlawful in England to discriminate against renters because they receive benefits or have children. It applies to landlords and to anyone acting for them — letting agents, referencing services, even a family member showing the property — and it covers sitting tenants as well as applicants.
| Topic | Before | From 1 May 2026 |
|---|---|---|
| Blanket “No DSS” | Risk of an Equality Act claim (2020 rulings) | Banned by statute; council fine up to £7,000 |
| Who is liable | Landlord or agent, through a court claim | Landlord and anyone acting for them, incl. referencing services |
| Mortgage or lease clause | Often cited as a reason to refuse | No effect |
| Insurance clause | Often cited as a reason to refuse | No effect in policies agreed or renewed from 1 May 2026 |
| Affordability checks | Allowed | Still allowed — same income test for everyone, all income counted |
Two details catch landlords out. First, acting on a belief counts: refusing someone because you assumed they were on benefits is discrimination even if they weren't. Second, unlike the rules on children, there is no exception for benefits — no “legitimate aim” argument can justify a blanket refusal.
How to assess fairly — and defensibly
- Count all income. Assess total household income including Universal Credit and the housing element. Discounting benefit income while counting wages is the unequal treatment the Act targets — and it is commercially strange, since the housing element is often the most predictable money the applicant receives.
- Write your standard down. One affordability rule, applied to every applicant. A written standard is far easier to defend than a series of case-by-case judgements, and it is what turns a decline into an evidenced commercial decision.
- Set guarantor requirements by numbers, not by source. You can ask for a guarantor, but not only from benefit claimants while accepting employed applicants on the same income.
- Accept reasonable evidence of income. A benefit award letter or Universal Credit statement is as valid as a payslip; the government's guidance says not to refuse one unreasonably.
- Never advertise an exclusion. “No DSS”, “professionals only” and “working tenants only” are all evidence of the policy the law bans. Publish your affordability requirement instead.
- Record the reason for each decision. Contemporaneous notes are the difference between a defensible decline and an argument about what you were thinking.
Verifying benefit income
The usual evidence is a Universal Credit statement from the applicant's online journal, which shows the housing element separately, or a benefit award letter, corroborated by bank statements or Open Banking so you can see the money actually arriving. Beyond that, reference exactly as you would anyone else: a £9 credit check for identity and adverse history, or a £19 full reference to verify affordability against total income. To collect the applicant's details first, send the free tenant application form.
You can sanity-check the arithmetic in the affordability calculator — enter the combined income from all sources against the monthly rent, exactly as you would for an employed applicant.
The mortgage and insurance objection
Landlords often say their buy-to-let lender, freeholder or insurer forbids letting to benefit claimants. In England that no longer settles anything. From 1 May 2026 a mortgage or superior lease term like that has no effect. For insurance, the clause is of no effect in any policy agreed or renewed on or after 1 May 2026; an older policy keeps it only until it ends or renews. If your policy still carries one, ask your insurer about it at renewal rather than relying on it.
Wales, Scotland and the 2020 court cases
The Renters' Rights Act ban applies in England only. Elsewhere in Great Britain the position still rests on the Equality Act 2010. In July 2020, York County Court held that refusing a disabled single parent because she received housing benefit was unlawful indirect discrimination on grounds of sex and disability; in September 2020, Birmingham County Court said the same of a letting agency's blanket “No DSS” policy. Receiving benefits is not itself a protected characteristic under the Equality Act — the claims worked because women and disabled people are more likely to claim. Both were county court decisions, so they do not bind other courts, but no case since has gone the other way.
FAQ
Is it illegal to refuse tenants on benefits?
In England, yes. Since 1 May 2026 the Renters' Rights Act 2025 bans landlords, and anyone acting for them such as a letting agent or referencing service, from refusing or deterring a renter because they receive benefits. That includes adverts, viewings, giving out information about a property and the terms of the tenancy. Councils enforce it with fines of up to £7,000. You can still decline an applicant whose income genuinely does not cover the rent, as long as you apply the same affordability test to everyone. In Wales and Scotland the Act does not apply, but a blanket 'No DSS' policy is still open to an Equality Act claim following two 2020 county court rulings.
What counts as discriminating against a benefit claimant?
Anything that treats a renter less favourably, or makes them less likely to rent, because they receive benefits: refusing to show them a property, telling them it is no longer available, advertising 'No DSS' or 'professionals only' as a proxy, setting a stricter test for them than for employed applicants, or putting a restrictive clause in the tenancy. It applies to current tenants as well as applicants, and it counts even if your belief that someone is on benefits turns out to be wrong. The benefits covered include Universal Credit, housing benefit, Jobseeker's Allowance, Personal Independence Payment, Child Benefit and Carer's Allowance.
Can I still decline someone who happens to receive benefits?
Yes, on genuine affordability grounds applied the same way to every applicant. The government's guidance says landlords can take income into account when deciding whether the rent is affordable, provided they set the same income requirement for all prospective tenants and treat all forms of income equally. If you count their total income including benefits and the numbers genuinely do not work, declining is lawful. What you cannot do is discount benefit income or quietly raise the bar for that applicant.
Should benefit income count towards the affordability multiple?
Yes. Count total household income from every source, including Universal Credit and its housing element. Counting wages but excluding benefits is exactly the unequal treatment the Act targets, and it is commercially odd too: the housing element is often the most predictable part of an applicant's income.
Can I ask a tenant on benefits for a guarantor?
Only if you would ask the same of any applicant in the same position. The guidance allows a guarantor requirement, but not one imposed only on benefit claimants. Set the threshold by the numbers, for example annual income below 30 times the monthly rent, and apply it to everyone.
Can I put 'No DSS' in my advert?
No. In England it is now unlawful, and a discriminatory advert is exactly the evidence a council will look at. Wording such as 'professionals only' or 'working tenants only' can do the same job and carries the same risk. Publish your affordability requirement instead; it tells applicants what they need to know without excluding anyone for where their income comes from. RentFig's To Let adverts check your title and description for this wording before an advert goes live.
My mortgage or insurance says no benefit claimants. Does that protect me?
Not any more, in England. From 1 May 2026 a mortgage or superior lease term banning benefit claimants has no effect, so it cannot justify refusing someone. Insurance is phased: a clause excluding benefit claimants is of no effect in any policy agreed or renewed on or after 1 May 2026. An older policy keeps its clause only until it ends or renews, whichever comes first.
What is the fine for refusing tenants on benefits?
Your local council can impose a civil penalty of up to £7,000. If the discrimination continues more than 28 days after the final notice, it can impose a further penalty of up to £7,000, and a repeat breach within five years can be penalised again. The council does not need the renter to prove they actually receive benefits; acting on the belief is enough.
Do the 2020 'No DSS' court cases still matter?
Yes, but they are now the secondary route in England. In July 2020 York County Court held that refusing an applicant because she received housing benefit was unlawful indirect discrimination on grounds of sex and disability under the Equality Act 2010, and in September 2020 Birmingham County Court said the same of a letting agency's blanket policy. Those are county court decisions, so they do not bind other courts, but they remain the basis for a discrimination claim in Wales and Scotland, where the Renters' Rights Act ban does not apply, and a renter in England can still bring an Equality Act claim alongside a council complaint.
How do I verify benefit income for referencing?
A Universal Credit statement from the applicant's online journal is the usual evidence, and it shows the housing element separately. A benefit award letter is also acceptable; the guidance says landlords should not unreasonably refuse one as proof of income. Bank statements or Open Banking confirm the money actually arrives. A credit check still covers identity and adverse history, and a full reference verifies affordability against total income in the ordinary way.
Disclaimer: This guide is general information for UK landlords, not legal or financial advice. Law and practice change — always confirm the current position, and take advice on anything that matters. This page summarises the Renters' Rights Act 2025 discrimination rules as they apply in England from 1 May 2026, using the government's published guidance, and the 2020 county court decisions, for general information. Discrimination cases are fact-sensitive. If you are facing a council investigation, complaint or claim, take proper legal advice rather than relying on this page.