Amended April 2008, October 2008, January 2009 and May 2009
From April 1 2009 Rent Service functions were transferred to the Valuation Office Agency.
LHA rates for Newcastle on the City Council website.
The Valuation Office Agency provide the LHA Direct service on their website. It has search facilities for local LHA rates, a "bedroom calculator" and information about how to calculate LHA.
Local Housing Allowance is a change to Housing Benefit for private tenants from April 2008. The change affected how Housing Benefit is worked out and how it is paid. It did not replace Housing Benefit. Local authority, Housing Association and some other tenants continue to get "normal" Housing Benefit.
Local Housing Allowance is just a change in the way Housing Benefit is calculated for private tenants. But instead of calling it Housing Benefit for private tenants the Government is calling it Local Housing Allowance. We will do the same.
Contents
Who can get Local Housing Allowance
Who can still get Housing Benefit
The Local Housing Allowance calculation
How Local Housing Allowance rates are set
The size criteria and the 5 bedroom cap
How the size criteria apply
Changes in circumstance
Claiming Local Housing Allowance
Payment of Local Housing Allowance
Challenging Local Housing Allowance decisions
More information
Local Housing Allowance (LHA) applies to:
Private tenants who make a new claim on or after 7 April 2008
Existing Housing Benefit claimants in private tenancies who have a break in their claim of more than a week starting on or after 7 April 2008
Existing Housing Benefit claimants who move to a new private tenancy on or after 7 April 2008
Who counts as a private tenant?
A private tenant is someone who rents property or a room from a private landlord.
Other private tenants already getting Housing Benefit (HB) carry on getting it under the old rules until one of the above applies.
The following types of tenants still get Housing Benefit. There are no plans at present to change them over to LHA.
Council tenants
Housing Association tenants
Tenants who have a registered fair rent
Tenancies which started before 1989
Tenancies where care, supervision or support is included
Tenancies of caravans, mobile homes or houseboats
Tenancies where a “substantial” part of the rent is for board and attendance
If a person claims LHA for what appears to be board and lodgings the local authority will refer the claim to the rent officer to determine if it is eligible for LHA. Most will not be. But the claimant can still claim "normal" Housing Benefit for board and lodging.
Step1. Find out the applicable LHA rate for the claimant. LHA rates are published by local authorities. A claimant's LHA rate may be more or less than their actual rent.
Step 2. Is claimant on Employment and Support Allowance (income related), Income Support, Jobseekers Allowance-income based or Pension Credit guarantee?
If yes - LHA payable = applicable LHA rate. LHA payable may be reduced if any non dependants live with the claimant.
If LHA is more than the actual rent charged the claimant can keep up to £15 of the difference. The Government proposes that from April 2010 no-one will be paid more LHA than their actual rent.
If claimant is not on any of those benefits:
Step 3. Work out their applicable amount = personal allowance plus premiums
Step 4. Work out their income
Step 5. If income is the same as or less than applicable amount, LHA payable = applicable LHA rate, less any non dependant deductions
If income is more than applicable amount, LHA payable = applicable LHA rate minus 65% of the difference between income and applicable amount, less any non dependant deductions.
Again, if their actual rent is less than their LHA rate, they can keep up to £15 of the difference. This is due to change from April 2010.
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Differences from "normal" Housing Benefit
There are only two differences between the LHA calculation and the "normal" HB calculation:
With "normal" HB, the claimant's actual rent is used to work out maximum rent
"Normal" HB can never be more than the claimant's actual rent
Example:
Katrina is 30 and single. She rents a one bedroom flat from a private landlord. Her rent is £60 per week including £3 per week water rates, and £2 per week service charge. She gets income based Jobseekers Allowance.
1. If she claims HB (before 7/4/2008). The maximum HB she can get is based on her “eligible rent”. Water rates and service charges do not qualify for Housing Benefit so her rent is taken as £55 per week.
This is referred to the rent officer to consider the local reference rent rules, size criteria and unreasonably high rent rules.
In Katrina’s case it is decided that eligible rent is £55 per week. This is also the maximum HB.
Because she gets income based JSA, she is entitled to maximum HB of £55 per week.
2. If she claims LHA (new claim from 7/4/2008). The maximum LHA she can get is the LHA figure for a one bed property in the area in which she lives.
The Rent Officer has set this at £65 per week.
Because she gets income based JSA, she is entitled to maximum LHA of £65 per week.
So the amount of LHA she receives is more than her rent. She can keep the difference (as long as it is no more than £15 per week). This is due to change in April 2010.
Any extra LHA paid under this rule is not counted as income for means tested benefits.
LHA rates are set by Rent Officers from the Rent Service which is part of the Valuation Office Agency. The Valuation Office Agency is part of Revenue and Customs. LHA rates are not set by local authorities.
Each local authority is divided into areas known as Broad Rental Market Areas (BRMAs). The BRMAs are defined by postcode areas. Rent officers look at the range of rents charged for properties of a particular size in each area and take the middle point of that range as the LHA. This means that in each BRMA exactly half of rental properties in that area will have rents at or below the LHA.
The Rent Service describes a BRMA as "Two or more distinct areas of residential accommodation, within which a person could reasonably be expected to live having regard to facilities and services for the purposes of health, education, recreation, personal banking and shopping." A person should be able to move within a BRMA and still have access to similar services of similar standards.
This means there may be different LHA rates for different areas and different LHA rates within each area depending on the size of the property. Because rent levels for similar properties may vary according to the type of area some local authorities may have more than one BRMA. The whole of Newcastle is in one BRMA which also includes Gateshead, North and South Tyneside and parts of Northumberland.
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Based on number of bedrooms
LHA rates are based on the number of bedrooms; this is because the size criteria set out the number of bedrooms a claimant is deemed to need for their household.
LHAs for properties with up to 5 bedrooms will be published by local authorities. If a person claims LHA for a property with more than 5 bedrooms the local authority will ask the rent officer to set the LHA. From April 2009 the maximum LHA rate is capped to that for a 5 bedroom property.
Rent officers will update LHAs monthly and they will be published by local authorities. But the LHA rate paid to tenants will only be reviewed annually, or when there is a change in circumstances which means a different LHA will apply.
A claimant or landlord cannot appeal against the levels of LHA set by the Rent Service. Only a local authority can do this.
More choice for tenants?
The Government says this means better choice for claimants as they will be able to look at LHA rates and know the maximum help they can get with their rent in a particular area for a particular size of property. But the actual amount of LHA a person will get will still depend on their income and capital.
These set out the size of property a claimant is deemed to need for their household. They are based on number of bedrooms only and do not take account of any other rooms in a property. Once a claimant knows how many bedrooms they are allowed, they can find out the maximum LHA rate for a property of that size in area(s) they want to live in. Note the 5 bedroom limit.
Shared room rate for single people under 25
Most single people under 25 are only entitled to the shared LHA rate, even if they live in a self contained property.
The shared rate LHA is set for properties where some or all “facilities” are shared, for example bathrooms, kitchens and living rooms.
Single under 25’s are known as “young individuals”. Some people not classed as young individuals can get the LHA rate for self contained accommodation: ·
Single people over 25 and couples without children
Single over 25’s and couples with no children are entitled to the one bedroom LHA rate unless they live in accommodation with shared facilities. In this case they will only be entitled to the shared LHA rate.
Other households
For all other households the applicable LHA rate depends on the number of bedrooms the claimant is "allowed" for their household:
One bedroom is allowed 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
Any other child
Thirteen week protection
If a person has been able to pay their rent without claiming HB in the 52 weeks before claiming LHA, their actual rent can be used to calculate their benefit, if it is higher than the applicable LHA rate. But this protection only lasts for thirteen weeks from the date of the LHA claim.
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No matter how big the family, Local Housing Allowance is capped to a maximum of 5 bedrooms. Existing claimants will be protected until 13 weeks after the first anniversary of their claim.
This change follows media criticism of the amount recieved by larger families.
Examples of the size criteria in practice
Anna is 23 and lives on her own in a one bedroom flat. She is entitled to the shared LHA rate.
Bruno is 19. He is a care leaver. He lives on his own in a one bedroom flat. He is entitled to the one bedroom LHA rate – but only until his 22nd birthday. He is then entitled to the shared room rate only.
Carina is 18. She is married to Deepak. They have a three month old baby, Eva. Carina’s mother Frances lives with them. They are entitled to the LHA rate for a 3 bedroom property – one bedroom for Carina and Deepak, one for Eva and one for Frances.
George is 30. He is single and has four children, Hannah aged 16, Ivan aged 14, Jennifer aged 10 and Karl aged 6. He is entitled to the LHA rate for a 4 bedroom property:
- One bedroom for himself
- One bedroom for Hannah
- One bedroom for Jennifer
- One bedroom for Ivan and Karl
There are very few allowances for claimants who need a bigge
r property than they are allowed under the size criteria. In general such claimants ;are expe cted to claim a Discretionary Housing Payment to top up their LHA.
People with disabilities
The only concession in LHA rates for private tenants with a disability is that for single under 25’s as above.
Other tenants who need a larger prop erty than they are allowed under the size criteria due to disability are expected to apply for a
Discretionary Housing Payment Foster carers
Foster children do not count as part of a foster carer’s househo ld, therefore no bedrooms are allocated for them under the size criteria. A foster carer who needs to rent a larger property will have to apply for a Discretionary Housing Payment.
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Person with no recourse to public funds
If a person from abroad whose leave to enter the UK is subject to a restriction on claiming public funds:
The person subject to the public funds restriction cannot be the claimant for LHA
The person subject to the public funds restriction is counted as a member of the household when working out how many bedrooms are allowed under the size criteria
Joint tenants
Each joint tenant is entitled to the LHA rate for themselves and their household.
For example, Samina and Yasmin are joint tenants. Yasmin's mother Asiya lives with them. Yasmin is entitled to the two room rate. Her LHA is reduced by a non dependant deduction for Asiya. Samina is entitled to the shared room rate.
Absent parents
The size criteria do not allow for an extra bedroom for either an absent parent who comes to stay in the household where the children live, or for extra bedrooms for the children to stay with the absent parent.
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As explained above, once a person is awarded LHA the rate they are entitled to is reviewed annually. But they may have a change of circumstances which means they become entitled to a different rate. For example they have a baby and are therefore allowed an extra bedroom. Or someone in the household dies.
New baby
A claimant cannot get the LHA rate for a bigger property while they (or their partner) are pregnant.
If the claimant is allowed an extra bedroom under the size criteria due to having a new baby or adopting a child, the change in the LHA rate only takes effect from when the baby is born/child is adopted, or starts to live in the property.
Child’s birthday
If a child reaches 10 or 16 and as a result the claimant is allowed a bigger property under the size criteria, the change takes place from the Monday following the child’s birthday.
Person in household dies
If someone in the household dies and as a result the claimant would be entitled to a lower LHA under the size criteria there is 12 months protection at the higher rate. This means the LHA rate will not go down until a year after the person dies.
The landlord increases the rent
This does not affect the LHA which applies to the tenant because the LHA does not take account of the actual rent payable.
The claimant moves
If the claimant moves to a new private tenancy they will need to make a new claim for LHA for that tenancy.
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Claims for Local Housing Allowance are made in the same way as claims for Housing Benefit, with a modified claim form.
Backdating claims
A claim for LHA can be backdated:
for up to 6 months:
for up to 3 months if the claimant is 60+. No need to show good cause.
More about backdating.
LHA is normally paid to the claimant. Claimants and landlords cannot choose to have LHA paid direct to the landlord as they can with “normal” Housing Benefit.
Payment direct to the landlord
Payment of LHA can only be made direct to the landlord in limited circumstances.
These are:
Where the tenant has built up eight weeks rent arrears. The local authority must make payments direct to the landlord in this circumstance unless it would not be in the “overriding interest” of the tenant, or the landlord is not a "fit and proper person".
The local authority has a discretion to pay direct to the landlord if they have evidence that:
and in either case it would be in the tenant's interests.
The tenant may be considered vulnerable for a number of reasons, including:
has language or literacy difficulties
is unable to open a bank account
has debt problems
has a health condition which makes it difficult for them to manage their own affairs.
The local authority Housing Benefit section has to make the decision about whether a tenant is vulnerable. They are told to ask for supporting evidence. The Department for Work and Pensions suggest that people who can supply evidence include:
- the tenant
- friends and family of the tenant
- the landlord
- welfare groups (including money advisers)
- Social Care Services
- probation officers
- Jobcentre Plus
- The Pension Service
- homeless charities/organisations
- Supporting People teams
- local/council rent deposit scheme administrators, homelessness or housing advice officers
Either a tenant or a landlord can appeal against a decision not to make payments direct to the landlord.
Payment of excess LHA
Tenants may be getting more LHA than their rent (see above) – they are allowed to keep up to £15. This is due to change from April 2010.
Where payments of LHA are being made direct to the landlord, any excess must be paid to the tenant. Excess LHA can only be paid to the landlord towards rent arrears. And once the arrears are paid off, payment of the excess must revert to the tenant.
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Payment direct to a bank account
The local authority will normally pay LHA direct to a claimant's bank or building society account. Claimants who do not have an account will be expected to open one. LHA cannot be paid into a Post Office card account.
Some people may have problems opening an account, usually due to the banks demanding certain forms of identification. The DWP expects most people to be able to open a basic bank account.
The local authority can pay LHA by cheque to claimants who cannot open or manage an account.
Decisions on Local Housing Allowance (LHA) claims are made by benefit officers from the local authority.
Claimants can challenge decisions on LHA claims in the same way as for other benefits. They can ask for a decision to be looked at again or can appeal. Most LHA decisions can be challenged this way, including a decision to pay or not to pay LHA direct to the landlord.
But claimants and landlords cannot challenge the LHA rates set by Rent Officers.
More about challenging decisions.
The information here is as up to date as we can make it. Keep checking for updates.
Information about LHA is also available on the DWP website.