Local Housing Allowance
Local Housing Allowance is a new way of working out Housing Benefit for tenants who rent their homes from a private landlord. From 07 April 2008 claimants will have their Housing Benefit calculated using the Local Housing Allowance (LHA) if they make a new application for Housing Benefit, change address or room, or have a break in their claim on or after the 7 April 2008.
Aims of the LHA
Central Government has stated that there are a number of key aims for the LHA such as:
- Fairness in terms of tenants with similar circumstances living in the same area will get the same amount of Housing Benefit
- Choice in terms of tenants being able to choose the quality and price of their accommodation with the possibility of keeping up to £15 pw to spend on other items
- Transparency in terms of the scheme making it easy to find out how much rent could be covered by Housing Benefit
- Personal responsibility: by paying the allowance to the tenant encourages them to take responsibility for budgeting and paying their rent themselves
- Increased work incentives: greater certainty about what in-work benefit they could receive is expected to help tenants to bridge the gap between being out of work and taking a job
- Simplicity: By removing the complex rent restrictions, this should speed up the decision making process.
To learn more about the LHA go to the Department of Work and Pensions website 
.
Exempt Tenancies
Only a few tenancies will be exempt, such as:
- Registered Social Landlord tenancies
- Protected cases, such as supported housing provided by certain local authorities, social landlords, charities and voluntary organisations;
- Tenancies that are excluded from current rent restrictions, such as:
- Local Authority tenancies;
- Regulated tenancies prior to 15 January 1989;
- Other regulated tenancies (Rent Act 1977) or Rent (Agricultural) Act 1976;
- Home Office bail hostels or probation hostels
- HAT lets (Housing Action Trust);
- Former LA tenancies now transferred unless rent has been increased and felt to be unreasonable;
- Exceptional cases i.e. caravans, houseboats (including mooring charges), mobile homes and hostels;
- Cases where the rent officer judges that a substantial part of the rent is attributable to Board and Attendance e.g. hotel accommodation;
- Hostel accommodation.
How much will I receive?
You will receive Local Housing Allowance based on:
- The number of occupiers in your property; and
- the area in which you live.
Entitlement to the Local Housing Allowance will be subject to a means-test and proof of a valid tenancy, just as it is with Housing Benefit now.
The LHA rate used in the assessment remains in effect for 1 year and will not be changed if your rent increases.
Calculating your size criteria
Local Housing Allowance refers to different categories of allowance which relate to different sizes of property. We will decide how many rooms, according to the Housing Benefit rules, you will need. Tenants with similar circumstances are entitled to the same category of LHA. If the rent you pay is less than the allowance you can keep the difference up to a maximum of £15 per week.
The category that you are entitled to depends on the number of occupiers within your household. One bedroom shall be allowed for each of the following categories of occupier (and each occupier shall come within only the first category which applies to them):
- a) a couple;
- b) a person who is aged 16 or over;
- c) two children of the same sex until they are 16;
- d) two children who are younger than 10 years old;
- e) a child (someone under 16).
The allowances are set by The Rent Service each month and can be found on their website .
The allowances set by The Rent Service each month are the maximum amounts - the actual amount claimants will be entitled to will depend on income, savings and circumstance. The claim is based on the rate for the month the claim is made and will be reviewed after a year, unless there's a change in circumstances.
| Household entitlement | Weekly | Monthly |
|---|---|---|
| A: One bedroom, shared accomodation level | £69.00 | £299.00 |
| B: One bedroom, self-contained level | £126.92 | £549.99 |
| C: Two bedroom level | £160.38 | £694.98 |
| D: Three bedroom level | £190.38 | £824.98 |
| E: Four bedroom level | £253.85 | £1,100.02 |
| F: Five bedroom level | £311.54 | £1,350.01 |
| Household entitlement | Weekly | Monthly |
|---|---|---|
| A: One bedroom, shared accomodation level | £70.00 | £303.33 |
| B: One bedroom, self-contained level | £126.92 | £549.99 |
| C: Two bedroom level | £160.38 | £694.98 |
| D: Three bedroom level | £190.38 | £824.98 |
| E: Four bedroom level | £253.85 | £1,100.02 |
| F: Five bedroom level | £311.54 | £1,350.01 |
Please note:
Category A: One bedroom, shared accomodation will be based on properties where a tenant has the exclusive use of only one bedroom and where the tenancy provides for him to share the use of one or more of:
- a kitchen
- a bathroom
- a toilet, or
- a room suitable for living in.
If you are single and aged under 25, generally the appropriate rate is Category A: One bedroom, shared accomodation.
Broad Rental Market Areas (BRMA)
A BRMA, or 'Locality', is an area made up of two or more distinct areas of residential accomodation within which a person could reasonably be expected to live, having regard to facilities and services for the purpose of health, education, recreation, personal banking and shopping, and containing residential premises of a variety of types.
All properties within the Borough of Poole fall within the Bournemouth Locality. The Rent Service website provides a map and search-by-postcode facility for determining the appropriate Locality.
Payments
Local Housing Allowance payments will normally be made directly to your bank account, rather than to your landlord. You will be responsible for making payment to your landlord. If you do not pay your rent, your home could be at risk.The Borough of Poole and other Local Authorities will have discretion to make payments to the landlord in exceptional circumstances (see 'Safeguards for tenants and landlords' below).
If you do not already have a bank account, Dorset Local Authorities have been in touch with local banks and building societies and can help. Advice on 'basic bank accounts' can be found here . Further assistance on setting up a bank account can be obtained from welfare organisations such as the Citizen's Advice Bureau.
Safeguards for tenants and landlords
The biggest change for most landlords is that Local Housing Allowance payments will be made to the tenant. The tenant will be responsible for paying their rent to the landlord.
In recognition of the risk that some tenants may struggle with the responsibility of paying their rent, a 'Safeguard Policy' has been jointly adopted by all eight Dorset Local Authorities to protect vulnerable tenants or landlords of tenants that are unlikely to pay. Several Landlord and Advisor forums have been held to offer interested parties an opportunity to discuss a draft of the policy and to suggest changes or improvements.
Rather than introduce a precise list of circumstances when payment could be made to the landlord, we have been given discretion in identifying such cases where direct to landlord payments would be more effective. We shall be able to decide to make payment direct to a landlord in a number of circumstances including:
- if we consider that the tenant is likely to have difficulty managing their own affairs. We have called this 'vulnerability'. Examples of this could include tenants with a learning disorder or a drug or alcohol problem that would mean they may have problems managing a budget. Advice regarding 'vulnerable' tenants can be found in the 'Safeguard' policy;
- if we think the tenant is unlikely to use their Local Housing Allowance to pay their rent. This could be if we know the tenant has consistently failed to pay their rent in the past;
- when the Local Housing Allowance has been backdated or there has been a delay in processing a claim and a large amount of benefit is to be paid. In these cases we can decide to make the first payment of Local Housing Allowance by cheque payable to the landlord, although it would be sent to the claimant (This is the same as Housing Benefit Regulation 94). Making the first payment direct to the landlord is also expected to provide a good indication that the tenancy has actually been established;
- if the tenant has built up rent arrears of eight weeks or more and payment direct to the landlord has been implemented (under current Housing Benefit regulations), we can decide to continue making payments direct to the landlord after the arrears have fallen below eight weeks;
- If the tenant is having deductions from their Income Support or Jobseeker's Allowance to pay off rent arrears we must pay the landlord.
Planning for the change
We have already started to talk to interested parties and agencies such as private landlords, Citizen's Advice Bureau, Welfare agencies, and Housing Officers, who have attended awareness sessions with Council staff.
Seminars were held in May, October and November 2007. Many local landlords attended. Follow this link for the presentation . The questions that were asked on the day, and the responses, can be found here .
Leaflets explaining the Local Housing Allowance can be found here .
Further updates to this page - such as links to the Rent Service website pages - will be made when available.
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