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Local Housing Allowance

What is Local Housing Allowance

Local Housing Allowance has been brought in by the Government and is the new scheme for Housing Benefit for tenants in privately rented accommodation. The change will only affect you if you rent your home from a private landlord and you make a new claim for Housing Benefit, or you are already claiming Housing Benefit and you change your address or have a break in your claim on or after 7 April 2008.

If you already get Housing Benefit and you move to a new address or there is another change in your circumstances, you should tell us straightaway. You may need to make a new claim for Housing Benefit

Local Housing Allowance has been introduced to give tenants more choice in where they live and to be fairer.

Local Housing Allowance has been introduced to give tenants more choice in where they live and to be fairer. With Local Housing Allowance:

• standard rates are set based on size, composition and location so that two households in similar circumstances will receive similar amounts of Benefit
• the standard rates will be published monthly which will allow you to find out in advance how much support is available towards your rent
• you will get your Benefit paid to you and it is up to you to pay the rent to your landlord
• you will find out about your Benefit more quickly than before

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What are the Changes

The new rules will not apply to:

• Tenants of Registered Social Landlords (Housing Associations)
• Tenants who have a registered or 'fair' rent
• Tenancies that started before January 1989
• Protected cases such as supported housing provided by social landlords, charities or voluntary organisations
• Tenancies in caravans, houseboats or hostels. LHA may not apply if the rent includes an amount for board and/or lodgings.

With Local Housing Allowance, your Benefit is not just based on the property you live in. We will look at:

• who lives with you
• which area you live in
• how much money you have coming in
• what savings you have.

Other things may affect the amount of Benefit you are entitled to, such as:

• how much your rent is
• whether anyone living with you is expected to contribute to your rent.

LHA is based on the number of bedrooms you need and the area you live in, not on the amount of your rent. The number of bedrooms you need will be based on the number of people you have living with you. One bedroom will be needed for:

• each adult couple
• any other adult (aged 16 or over)
• any two children under 10
• any two children of the same sex aged under 16
• or for any other child.

For example:

Family A -single parent with one child would need 2 bedrooms. Family B - couple with 1 girl aged 6 and 1 boy aged 8 would need 2 bedrooms. Family C - couple with 1 girl aged 6 and 1 boy aged 12 would need 3 bedrooms.

In the above example Family A & B would receive the 2 bedroomed LHA rate and Family C would receive the 3 bedroomed rate.

Single people under 25 will receive the "shared room" LHA rate - replacing the current "single room rent" level.

Anybody who rents a shared room tenancy will receive the "shared room" LHA rate regardless of how many people are in the household.

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New methods of Payment

If LHA applies to you, your Benefit will be paid directly into your Bank or Building Society account. You will no longer have the choice of direct payments to the landlord. If you do not already have a Bank or Building Society account, you should set one up. That way you can arrange to pay the rent to your landlord automatically, using a standing order. The payments we make to you will normally be made by BACS (direct transfer to your bank account), which will mean that there are no postal delays to worry about, or waiting for a cheque to clear. The money is available as soon as it arrives in your account.

It is up to you to pay your rent to your landlord. If you do not use your Benefit to pay your rent, your landlord may take you to court or try to evict you and you may lose your home. Your Benefit will always be paid to you unless you are likely to have difficulty paying your rent. If you are worried about managing your money, please contact us to see if we can help. In some cases we may be able to pay your rent to your landlord.

You can get advice about opening and running a bank account from any Bank or Building Society. You can also get advice from your local Citizens Advice Bureau who have agreed to help LHA customers with all financial matters.

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When can payment be made direct to the landlord?

We may make payment direct to a landlord if the tenant is:

• Likely to have difficulty in managing their financial affairs.
• Unlikely to pay their rent.
• 8 weeks or more in arrears with their rent.
• Having deductions made from their Income Support or Jobseekers Allowance to pay rent arrears

We will review our decision to make payment direct to a landlord on a regular basis ensuring it is still in the tenant's best interest to make direct payment.

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Who may have difficulty in managing their financial affairs or are unlikely to pay their rent?

There are many reasons why someone may have difficulty managing their financial affairs. They might be someone who:

• has a learning disability
• has a medical condition that is likely to seriously impair their ability to manage their affairs
• is unable to read or write
• is unable to speak English
• has an addiction to drugs, alcohol or gambling
• has severe debt problems
• has been declared bankrupt
• is unable to open a bank account
• will possibly not use Local Housing Allowance to pay their rent
• is 8 weeks or more in arrears with their rent
• is under the age of 18

This list is not exhaustive and there may be other situations where the Council considers it appropriate to pay the landlord Local Housing Allowance.

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Who can request that payment is made to the landlord?

Tenants may tell us that they are having difficulty paying their rent and managing their financial affairs and may request that we make payment direct to their landlord. Landlords or persons acting on the tenants behalf may also contact us giving us information. We may also identify tenants who may have difficulty managing their own money, for example, when carrying out home visits. Landlords should contact us to request direct payment if their tenant is more than 8 weeks in arrears with their rent.

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How to make a request for payments to the landlord?

The tenant, their representative or a third party can make the Council aware that they would prefer payment of Local Housing Allowance to be made to the landlord or a third party. The request needs to be supported with written evidence, but can initially be made by way of a: - letter - email - telephone call - by downloading an application form Payment of Local Housing Allowance to a Landlord.

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Who decides if payment is made to the landlord?

We will decide if payment is to be made direct to a landlord. If we need any extra information or evidence to support the request, we will ask for it. When we have collected and considered all the available information and evidence, we will make a decision and write to the tenant and the landlord explaining our decision.

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Broad Rental Market Area

Each local Authority will be divided into Broad Rental Market Areas (BRMA) and an independent Rent Officer will be responsible for setting the individual LHA rates for each BRMA.

The LHA rates within each area will be set monthly and only apply to that BRMA.

Rates will appear every month in all of our offices and on our website with the LHA rates for that month, even if there is no change in the rate.

Prospective tenants will be able to shop around with their allowance. If they find a property they like with a rent that exceeds their LHA they will need to make up the difference themselves - as they do now. But if they find somewhere with a rent below their allowance, they will be able to keep the difference up to a maximum of £15.00 per week.

For example- if the rate of LHA is £100 but the rent charged is £70, the maximum LHA will be £85.

Local Housing Allowance rules will apply to new claims (as above) from 7th April 2008. This site will be updated regularly with more information and Local Housing Allowance rates.

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Other pages you may find useful

• Supported and sheltered housing - information and advice (PID 230)
• Social services - direct payments (PID 287)
• Council housing - rents (PID 120)