Local Housing Allowance
Within the Housing Benefit scheme, Local Housing Allowance (LHA)
was rolled out nationally from April 2008 as part of the Welfare
Reform Act 2007. Local Housing Allowance is for people on low
incomes who rent from private landlords.
Local Housing Allowance promotes fairness, as this scheme will
generally pay the same amount to tenants in the same area and
in similar circumstances being paid the same amount. The
scheme allows for landlords and tenants to find out in advance how
much of the rent could be covered by Housing Benefit.
The key objective of Local Housing Allowance are to promote
personal responsibility and financial inclusion. In the vast
majority of cases, benefit will be paid to the tenant who will be
responsible for making their own payments of rent to their
landlord. In certain circumstances, benefit can be paid
directly to the landlord.
Important Information From January 2012 - Aged 35 and
Under
From 01 January 2012, single people aged 25 to 34 will be
entitled to a reduced amount of Housing Benefit to that which
currently applies. These restrictions already apply to those
aged under 25. The restricted rate of Housing Benefit will be
based on the rate applicable for shared accommodation.
Local Housing Allowance Changes - Already in Effect
As a part of the Governments Welfare Reform, there will be
changes to the way in which Local Housing Allowance is administered
and awarded. These were effective nationally from 01 April
2011.
What the changes mean
It is possible that the amount of Housing Benefit you get to pay
your rent could go down. If your Housing Benefit is paid
directly to your landlord, the amount your landlord gets for your
rent could go down. If you are already receiving or
thinking of claiming Housing Benefit, you need to consider these
changes before you renew or sign a new tenancy agreement with
a private landlord.
Who the changes affect
These changes could affect you if:
- You are claiming Housing Benefit, or are going to make a new
claim, under the Local Housing Allowance scheme (LHA);
- You receive more Housing Benefit (up to £15) than you pay
for your rent.
When will the changes affect me?
From 1st April 2011 if you receive more Housing Benefit (up to
£15) than you pay for your rent.
From 1st April 2011 if you are making a new claim for Housing
Benefit.
If you are already claiming Housing Benefit, you will normally
have more time before your rate changes. If your circumstances
don't change, you will have nine months at your current Local
Housing Allowance rate from when your local authority next assesses
your Housing Benefit after 1st April 2011.
It is important to remember that after your assessment the
Housing Benefit you get won't be higher than the rent you pay.
For example, if your next assessment is due in June 2011 the
changes to Local Housing Allowance rates will not affect you until
March 2012. But you will no longer get more Housing Benefit than
you pay in rent. The changes may affect you sooner if:
- You are getting Housing Benefit and are planning to move
home;
- Your household is changing such as someone leaving or coming to
live with you.
If you are claiming or intending to claim Housing Benefit you
need to be aware of the changes and when you will be affected
before negotiating or entering into a new tenancy agreement with a
private landlord.
Abolition of 5 Bedroom Rate
Also from 1 April 2011, if you currently receive Housing Benefit
based on the 5 bedroom rate, this will be restricted to the 4
bedroom rate. This will mean that your Housing Benefit will
go down however this change only applies from 9 months after your
reassessment date or date of any relevant change (your
household is changing such as someone leaving or coming to live
with you).
Reduction in Maximum Rates of Local Housing Allowance
The amount of Local Housing Allowance payable is a predetermined
amount for each area. These amounts are currently based on
the 50th percentile in that area. From 01 April 2011, these
rates will be based on the 30th percentile meaning that the maximum
amount of Housing Benefit payable will reduce.
Local Housing Allowance rates will reduce to a lower
amount so that around 3 in 10 properties for rent in the
area should be affordable to people on Housing Benefit rather than
the current 5 in 10 properties as now.
However, for existing customers, a 9 month transitional protection
will apply. This protection is the same as with the Abolition
of 5 Bedroom Rate.
To help you plan
for the changes you can compare the current rates against what the
new rates are likely to be for where you live on the Valuation Office Agency
Website.
Resident Carer
Where you have an extra bedroom that is used by someone
who is providing necessary overnight care for you or your
partner, this extra room can be included in your Local Housing
Allowance assessment, if the carer's main home is
elsewhere. If you are unsure as to whether this extra room
allowance may apply to your circumstances, contact the
Housing Benefit team on 01738 476049.
How Local Housing Allowance is Calculated
With Local Housing Allowance, your entitlement is worked out
based on the following:
- who lives with you
- which area you live in
- how much money you have coming in
- what savings you have.
In some situations, the amount of benefit you are entitled
to will also be determined by:
- how much your rent is
- whether anyone living with you is expected to contribute to
your rent.
How Local Housing Allowance Will Be Paid?
Usually, Local Housing Allowance will be paid directly to the
tenant. This will be paid directly to a bank or building
society account. You must therefore ensure that you
have a valid bank or building society account.
Unfortunately, we cannot pay into a Post Office account.
If you do not already have a bank or building society account, you
will be required to open one. You can get advice
about opening and running a bank account from any bank or building
society.
For more information on opening basic bank accounts, please refer
to the
Money Advice Service.
For the vast majority of cases, Housing Benefit under the Local
Housing Allowance scheme will normally be paid directly to the
tenant, however, under some circumstances can be paid to the
landlord directly. For more information on the circumstances
where payment can be issued to the landlord, visit our
Information for Landlords page.
Changes In Circumstances
If you currently receive Housing Benefit and you move to a new
address, you must tell us straight away. For more
information, visit our section on Reporting
Changes In Circumstances.
Obtaining More Information on Local Housing Allowance
If you require any further information on Local Housing
Allowance, please do not hesitate to
Contact Us.
