Council house rents in Chesterfield are set to rise by 5.41 per cent.
The increase will mean the average tenant will pay £3.99 a week extra over the 48 weeks payment period in 2013/14.
More than half of all tenants will have the increase covered by rises in housing benefit.
The rent rise is in line with those planned by Bolsover and North East Derbyshire District councils.
Cllr Jim McManus, Chesterfield Borough Council’s executive member for housing, said: “It is never easy to take a decision to increase rent levels but this money will be used to invest in improvements to tenants’ homes and also to enable us to start building a small number of new council homes.
“We are looking to put in place a new rent policy for the following year to ensure we are balancing the need to improve the quality of homes against the pressure that tenants are facing due to the economic climate and changes to benefits.”
Changes to council house rents come as government changes to the welfare benefits system are also implemented from April.
Working age tenants on housing benefit who live in under occupied council homes with spare bedrooms face paying what has been dubbed the ‘bedroom tax’. This will see tenants with one spare room lose 14 per cent of their weekly housing benefit or 25 per cent if they have two spare rooms.
To help reduce the impact of the changes Chesterfield Borough Council is going to provide financial support to make it easier and quicker for tenants to exchange homes by mutual agreement. This enables people to downsize to a property that will prevent their housing benefit being cut.
Cllr McManus added: “We are extremely concerned about the impact these benefit changes will have on tenants.
“By making mutual exchanges of homes easier we will offer tenants a way to avoid losing their housing benefits.”
Details of the new proposals will be sent to all Chesterfield Borough Council housing tenants soon.