Effect of income on the amount of housing allowance

Housing allowance payments are available to low-income households. The gross income of the household members affects the amount of the housing allowance. Gross income means income before deduction for taxes.

The income is taken into account either on a continuous basis or is averaged over a certain period. See this table for examples on how income affects the amount of the housing allowance.

An earnings deduction of EUR 300 is made from every household member's salary, income from self-employment or income from agriculture. This means that the income that is taken into account is smaller than the person's actual income.

The income of child household members under 18 years of age does not affect the amount of the housing allowance, except if such a child is applying in their own right or together with a spouse or partner.

Regular income

Regular income means income which the person continues to earn for at least three months starting from the date on which the housing allowance is granted or reviewed. If a person's income stays the same for at least three months starting from the time the housing allowance is granted or reviewed, the allowance is calculated according to that income.

Average income

If a person’s income will not be the same for at least three months, it will be taken into account as the average amount of all income received over the next 12 months.

Calculation of average income

Susan is applying for housing allowance for the period beginning 1 April 2020. She has a fixed-term employment contract from 1 April to 31 May 2020 for which she earns a salary of EUR 1,550 per month. After her employment ends, Susan will receive unemployment benefits from 1 June 2020 to 31 March 2021, which are estimated to total EUR 723.70 per month. She has no other sources of income.

Susan's average income, which affects her housing allowance, is estimated as follows:

Salary 1 April 2020 – 31 May 2020: 2 months x EUR 1,550.00 per month = EUR 3,100.00
An earnings deduction is made on the salary 2 months x EUR 300.00 per month = EUR 600.00.

EUR 2,500.00  (EUR 3,100.00 – EUR 600.00) is taken into account as Susan's salary.
 
Unemployment benefit 1 June 2020 – 31 March 2021: 10 months x EUR 723.70 per month = EUR 7,237.00
Total income: 1 April 2020 – 31 March 2021 = EUR 2,500.00 + EUR 7,237.00 =
EUR 9,737.00 per year.

Susan’s average income starting 1 April 2020 is:
EUR 9,737.00/ 12 months = EUR 811.42 per month

Conversion of the daily allowance into monthly income

When calculating the amount of the housing allowance, various social security daily allowances are converted into monthly income as follows:

  • Unemployment allowances are converted by multiplying them by 21.5, because unemployment allowance is paid for an average of 21.5 days per month.
  • Other daily allowances (such as the sickness, maternity, paternity and parental allowance) are multiplied by 25.

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