Housing Benefit is changing from 7 April 2008. The Government is changing Housing Benefit to make it fairer and easier to use.
Local Housing Allowance (LHA) is a new way of working out Housing Benefit for some tenants on a low income living in private rented accommodation.
It is a flat rate allowance towards rent costs based on:
The area you live in
Who lives with you
What money you have coming in
What savings you have
LHA is not based on the rent charged by the landlord, so the Housing Benefit you receive may be higher or lower than the rent you are being charged.
The change will only affect you if you rent your home from a private landlord and
You make a new claim for Housing Benefit on or after 7 April 2008 or
You have a break in your claim of one week or more or
You are already claiming Housing Benefit and you change your address on or after 7 April 2008.
The changes will not affect you if:
You are a Council or Housing Association tenant;
Your rent has been registered as a ‘fair rent’;
Your tenancy started before 1989;
You live somewhere where you are provided with care, support or supervision;
You live in a caravan, mobile home, tent or houseboat.
LHA may not apply if your rent includes an amount for meals.
LHA is fairer:
You will get the same amount of benefit as other people living in your area with similar circumstances to you
Local Housing Allowance is clearer:
You will know how much LHA you are entitled to before you look for a property to rent, so you will know which property you can afford.
LHA gives you more choice:
You will be able to choose how to spend your income in the same way as tenants who are not in receipt of benefits.
For example
-If you find a property you like and the rent is lower than the LHA you will be able to keep the difference up to a maximum of £15 per week.
-Alternatively, if you find a property you like but the rent is more than the LHA you will know how much of the rent you will have to make up yourself.
LHA gives you more financial responsibility
LHA will usually be paid direct to you and you will be responsible for paying the rent to your landlord in the same way as other tenants who are not in receipt of benefits.
LHA is simpler
There will no longer be a need for complex rent restrictions and individual referrals to The Rent Service that can contribute to the delays in processing claims from private tenants.
Each Council will be divided into areas called Broad Rental Market Areas (BRMAs).
The Rent Service will be responsible for calculating the LHA for each BRMA, which will be based on the average rent for that area depending on the size of the property.
LHA will pay the same amount wherever you live in your area.
The LHA rates will be published monthly from April 2008 on The Rent Officer website.
LHA is based on the number of bedrooms you need, not on how much your rent is.
The number of bedrooms you need will be based on the number of people you have living with you. You are allowed one bedroom for:
every adult couple (married or unmarried);
any other adult aged 16 or over;
any two children of the same sex aged under 16;
any two children regardless of sex aged under 10;
any other child.
The amount of weekly LHA that you get will depend on the level of your income and savings.
If you receive Income Support, Jobseekers Allowance (income based) or Guarantee Credit for pensioners your benefit will be based on the maximum LHA.
We may make a deduction from your benefit for any other adults you have living with you.
For example: - if you have a grown up son or daughter living with you, who is over 18 and earning up to £163.99 per week we will deduct £17 from your weekly Housing Benefit entitlement
LHA will usually be paid directly to you.
It will be up to you to pay your rent to your landlord. If you do not pay your rent you may be evicted from the property.
You may want to open a bank account if you do not already have one. That way you will be able to pay your Housing Benefit to your landlord by direct debit or standing order. You can get advice about opening a bank account from any bank or building society. We also have a list of local banks and building societies to help you: A Guide to Basic Bank Accounts
You can also get advice from a welfare organisation such as the Citizens Advice Bureau.
If you are worried about managing your money, ask us if we can help. In special cases we may be able to pay your rent to your landlord.
Some tenants will have problems with the responsibility of paying the rent themselves. In order to safeguard these tenants, the Council will use its discretion to decide whether there is evidence that it is in the tenant’s interest to pay their LHA direct to their landlord.
There are four circumstances when the Council will consider whether it will be in the tenant’s best interests to make direct payments:
1.If it is considered that the tenant is likely to have difficulty managing their financial affairs
Examples of this could include tenants with a health problem or a learning disability or an alcohol or drug problem that might mean they would have problems managing their finances.
2.It is considered that the tenant is unlikely to pay their rent.
They may have consistently failed to pay their rent in the past or they may have other debts or cash flow problems.
However, it will not be sufficient to make direct payments simply because the tenant has said they will not pay their rent.
3.The tenant has rent arrears of 8 weeks or more
As now, if a tenant has built up rent arrears of 8 weeks or more, the Council will be able to make payments direct to the landlord, unless it is not in the tenant’s overriding interests to do so.
4.Deductions from DWP for rent arrears
If a landlord is receiving deductions from a tenant’s Income Support, Job Seekers Allowance or Pension Credit to cover rent arrears, the Council can pay LHA direct to the landlord
We will need written evidence to make a decision. Once we have collected the evidence we will decide as quickly as possible whether it will be in the tenant’s best interest to pay their LHA direct to their landlord. Each request will be considered on its own merits.
You can get further information on LHA from the Benefit Service
You can download a LHA 'Safeguarding Your Housing Benefit' leaflet
You can also get information at the following websites:
Department of Work and Pensions www.dwp.gov.uk
The Rent Service www.therentservice.gov.uk