Local Housing Allowance (LHA) is a Housing Benefit scheme that came into effect on 7 April 2008.
It does not affect the following tenants:
- A tenant of a Registered Social Landlord (a Housing Association).
- Someone whose tenancy started before 15 January 1989 (that is, a regulated tenancy)
- A tenant of a caravan, houseboat or hostel
- A tenant where the Valuation Office Agency has decided that a substantial amount of the rent is for board and attendance
If you already have a tenant who gets Housing Benefit and they do not move address or have a break in their Housing Benefit of a week or more, they will continue to be assessed on the old Housing Benefit rules prior to Local Housing Allowance.
Working out Local Housing Allowance
To work out how much Housing Benefit your tenant might get under local Housing Allowance, you need to do the following:
- Work out how many bedrooms they are entitled to and which Local Housing Allowance rate applies to them
- Check the Local Housing Allowance for the area they want to live in
- Find out if they can get the full amount of benefit
Income and capital
Your tenant’s Housing Benefit will still be assessed on what income and capital they have, as with the old Housing Benefit rules. This means that even though you may know the Local Housing Allowance rate for your tenant, their Housing Benefit may still be reduced depending on how their income compares with their Applicable Amount (the amount the Government states a tenant and their family can afford to live on in order to meet basic living costs).
Any adult aged 18 or over (except certain students) living with a tenant and their partner, may affect the amount of Housing Benefit that tenant receives. This is because we may expect that person to pay towards the rent. Therefore we may need to reduce the Housing Benefit we pay by making a non-dependant deduction, as with the old Housing Benefit rules.
How many bedrooms are they entitled to?
The number of people who live with your tenant is used to work out how many bedrooms they are entitled to. We do not count other rooms such as a living room, kitchen or bathroom.
The number of bedrooms they are entitled to is then used to work out which Local Housing Allowance rate usually applies to them. You can use the following information as a guide to work out how many bedrooms they are entitled to.
They are entitled to 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 aged under 10
- any other child
Please note that Local Housing Allowance rates have been restricted to the four bed rate since April 2011. Existing customers who were being assessed on the five bed rate prior to April, 2011 may receive a period of protection before their Housing Benefit is restricted to the four bed rate.
Please follow the link on this page to find the Local Housing Allowance rate applicable for your tenant.
Payment of Housing Benefit for Local Housing Allowance
Under the Local Housing Allowance rules, the tenant will no longer be able to request that payment of Housing Benefit is made directly to their landlord. This is because tenants on Housing Benefit need to take greater responsibility for managing their affairs and paying their rent to their landlords (in the same way as other tenants do). We must therefore pay the tenant direct. Please note, you cannot change this by making direct payment a condition of the tenancy.
However, we must pay landlords direct in situations where:
- A tenant is more than eight weeks in arrears with their rent
- A tenant is having deductions made from their Income Support or Jobseekers Allowance to pay for rent arrears
(We will ask for proof of rent arrears before we amend payment of Housing Benefit to the landlord).
The council operates a Safeguard Procedure which provides us with the discretion to pay Housing Benefit (under the LHA rules) to landlords in special circumstances. For more information on this subject, please refer to the link on this page.
Please note, if you have any existing tenants being paid on the old Housing Benefit rules, you will continue to receive these payments until they fall into the Local Housing Allowance rules by either moving address or having a break in their Housing Benefit entitlement of a week or more. This might mean that as time goes by, you will have some tenants being paid under the old rules where we are able to pay you direct and some being paid under the new rules where we cannot pay you direct and the tenant will have to pay the rent to you themselves.
Positives of the scheme
We believe the Local Housing Allowance scheme has the following positives for both landlords and tenants:
- It is a more transparent system that is simpler to understand and administer. This is because the Local Housing Allowance rates that we use in our assessments are available for all to see. It is not necessary to wait and see what the Valuation Office Agency say we should base our assessment on. The monthly rates are publicised on the website and are displayed in the main reception area of each of the council’s local offices
- You are still be able to approach the council for help with rent arrears for tenants getting benefit calculated using the Local Housing Allowance rules. You cannot do this where you have a tenant in rent arrears who is not getting benefit
- Because payments are going to tenants in most cases, this removes the possibility of you being asked to repay large amounts in overpaid benefit. Under the Local Housing Allowance scheme it is unlikely that the council would ask you to repay any money that your tenant has paid directly to you
- We believe that the safeguard procedure regarding direct payment to landlords strikes the right balance in protecting the interests of both landlord and tenant
If you require more information on Local Housing Allowance, please contact the Benefits Service.