Local Housing Allowance (LHA) affects most new Housing Benefit claims in the private rented sector. It also affects tenants already getting Housing Benefit who move into different accommodation rented from a private landlord. LHA does not affect people living in council accommodation or social housing.
LHA is a flat-rate amount based on the size of the tenant's household and the area in which they are renting. It becomes the "rent" figure used to decide the maximum amount of Housing Benefit someone is entitled to. The rate of LHA used for working out a tenant's Housing Benefit is reviewed yearly and could go up or down when reviewed depending on what the current LHA figures are at the time of the review. LHA figures are set by The Valuation Office Agency and are set using the lowest 30% of the rents in the area. See more about the planned changes from April 2011 onwards
Single-household claimants under 35 years old
The rules changed from January 2012 so that single-household claimants under 35 years old will generally only have their housing benefit worked out using the LHA figure for a single room (which is about £65 per week). This rule used to apply to under-25s but is now extended to under-35's. During October 2011, we wrote to all those who will be affected by this change to give advance warning. But anyone under 35 who first claims benefit from now on also needs to be aware that this change will seriously reduce the amount of housing benefit.
Payment of Housing Benefit for claims worked out using LHA
The Government wants Housing Benefit usually to be paid direct to the tenant. This means tenants can no longer simply opt to have their Housing Benefit paid to their landlord. Paying direct to tenants helps them take personal responsibility for budgeting and paying their rent themselves. However, it's recognised that in some circumstances there needs to be a safeguard and we can decide to pay the landlord if the Housing Benefit claimant is:
- in rent arrears of 8 weeks or more , or
- unlikely to pay their rent, or
- considered to be unable to manage their own affairs, or
- has negotiated a lower rent with their landlord in exchange for payments to go to the landlord.
You're thinking about moving to another home, so what will your LHA be?
You can look at this for yourself (or call us for advice if you are in doubt). You first need to:
- find out how many bedrooms you are entitled to (see below) and which LHA rate applies to you,
- check the LHA rate for the area you want to live in. This will be the the "rent" figure we'll use to work out your Housing Benefit.
- The amount of Housing Benefit you'll get will depend on who is in your household, your household income, savings and if you share the rent.
How many bedrooms am I entitled to?
This depends on the number of people living in your household. You are entitled to a bedroom for:
- a single person or couple (married or unmarried)
- any other person aged 16 or over (this may include adult son or daughter)
- any two children of the same sex aged under 16
- any two children aged under 10
- any other child
Example: Adam and Jane are a couple who have 2 children; Lucy aged 12 and Matthew aged 7. Adam and Jane are entitled to 1 bedroom for themselves, 1 bedroom for Lucy and 1 bedroom for Matthew. This means any Housing Benefit they are entitled to will be based on the LHA rate for 3 bedrooms. From April 2011 the LHA rate will be set at a maximum of 4 bedrooms.
If you are single and aged under 35 or a joint tenant, we normally work out your Housing Benefit using the 'Shared Room Rate' of LHA. This rate will also apply to single people over 35 and couples with no other occupiers who choose to live in shared accommodation.
Extra bedroom for a non-resident carer
If you are renting privately and have a bedroom which is used by a non-resident carer who regularly stays overnight to provide care to you, we may include this extra need for a bedroom when working out your Housing Benefit. Please contact us for advice.
Which LHA rate?
Your LHA rate will depend on the area in which you rent your property. New Forest is split into three Broad Rental Market Areas (BRMA's) - Southampton area, Bournemouth area and Salisbury area. A BRMA is made up of at least 2 distinct but adjoining areas that each allows reasonable access to facilities such as banking, shopping, health and education. It will usually be obvious which of the 3 area LHA rates you need to use, but call us on 01590 646121 if in doubt.
What if my rent is higher or lower than the LHA rate that applies to me?
The maximum amount of Housing Benefit we can award will be the LHA rate for the number of bedrooms you need. If your rent is lower than the LHA rate we will use the actual rent to work out your Housing Benefit.
For example, if your rent is £90 per week and the LHA rate is £100 per week, the maximum amount of Housing Benefit we could award you would be £90 per week.
If your weekly rent is higher than the LHA rate, we work out your Housing Benefit using the LHA rate and you will have to pay the whole of the difference yourself.