Local Housing Allowance - from 7th April 2008
A Brief Introduction to Local Housing Allowance
From 7 April 2008, as part of Central Government's wider Welfare Reforms there will be a change to the way in which we work out how much Housing Benefit we can pay some of our claimants. This is known as Local Housing Allowance (LHA). This change will affect people renting private sector accommodation (but not Housing Associations) who:
- Make a brand new claim for Housing Benefit after 6 April 2008
- Change address to a private rented tenancy after 6 April 2008, or
- Reclaim benefit for a private tenancy after a break in their claim, after 7 April 2008.
Anyone who currently rents private sector accommodation will not come under these new rules until they have one of the changes described above.
Why Local Housing Allowance is being introduced?
Local Housing Allowance has been designed to give tenants more choice in where they live, promote responsibility, and to make the current method of calculating Housing Benefit in the private rented sector fairer. This is because with Local Housing Allowance:
- The LHA rate is the same for all tenants with the same circumstances and is worked out based on the size of the household not the rent
- The claimant can find out what LHA rate their benefit will be worked out on before they rent a property.
- The claimant can choose the right property for themselves based on the LHA level.
- The claimant will usually get their benefit paid to them. It is up to them to pay the rent to their landlord.
How Local Housing Allowance works
LHA is based upon the number of bedrooms the claimant or their household need. The LHA room rates are set by The Rent Service and this rate is equivalent to the maximum amount of Housing Benefit we can pay the claimant. The actual amount of Housing Benefit that will be awarded will be based on the LHA room rate that applies to the claimant's household and their circumstances, income and capital of the household members including any non-dependants who live with them.
If the amount of Housing Benefit award is less than the rent it will be up to the claimant to make up the difference. If the Housing Benefit award is more than the claimant's rent, we can pay them up to £15 of the difference.
The LHA rate we use when calculating a claimant's Housing Benefit is based on the room rate that the Rent Service has set for the month in which the claim is made. This rate will apply for a year, unless there is a change in the size of the household, which means a different LHA rate should be used. If a change in household size means a new LHA rate should be used, this will apply straight away, and this new rate will then apply for a year or until a new rate should apply.
How Housing Benefit is paid under the Local Housing Allowance scheme
In most cases, the benefit will be paid directly to the claimant giving them a direct responsibility for making payments of rent to the landlord. The benefit will be paid into a bank or building society account, if one is available.
If claimants don't have access to a bank or building society account, we strongly advise that they contact a local bank to arrange to open one. This way customers will have a number of ways to access their Housing Benefit payment and can arrange to pay their rent to their landlord using a standing order, by cheque or cash, whichever is most appropriate.
Claimants can get advice about opening and running a bank account from any bank or building society, an advice service, such as Citizens Advice Bureau or we can send information on how and where to open an account.
Under the LHA rules, can Housing Benefit be paid directly to a landlord?
Not as a general rule. Under the LHA rules Housing Benefit is paid to the claimant, unless they are likely to have difficulty paying their rent; they are more than 8 weeks in arrears with their rent; or they are on Income Support or Job Seekers Allowance and deductions from this benefit are being made to pay off rent arrears.
There are many reasons why someone might have difficultly in paying their rent, for example someone may have learning difficulties, be unable to read or speak English, be an un-discharged bankrupt, have severe debt problems, or have an addiction to drugs, alcohol or gambling. In circumstances like these we may be able to pay their benefit to their landlord. To help us establish whether or not it would be appropriate to pay to the landlord we have produced a Safeguard Policy.
How much will the Local Housing Allowance room rates be?
The rate will depend on which Local Housing Allowance Locality your property has been placed in by The Rent Service. Properties in the North East Derbyshire district come under five different localities. These are Chesterfield, Derbys, North Nottingham, Peaks and Dales and Sheffield.
These figures are provided by the Rent Service each month and will be available on this site towards the end of March 2008. These figures will also be advertised in the Council's offices in Chesterfield.
What happens if the claimant uses their benefit for something else?
Housing Benefit is paid for the claimant to pay the rent with. If a tenant does not pay their rent, the landlord may take them to court, to seek possession, which may result in eviction from the property.
What happens if the claimant's circumstances change?
Anyone who makes a claim for Housing Benefit or who is receiving a payment of Housing Benefit on behalf of a claimant should tell us straightaway if any circumstances that may affect this claim or payment change. This is to make sure that the right amount of benefit is being awarded or paid, and an overpayment, which may need to be paid back, is not occurring. This rule affects claimants, their partner and any landlords who are receiving direct payments. In some circumstances, the claimant may need to make a new claim for Housing Benefit.
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