Local Housing Allowance

Local Housing Allowance (LHA) is a the way of working out Housing Benefit for some tenants who are living in private rented accommodation. It was introduced on 7 April 2008.

It is based on:

• The area you live in.
• Who lives with you.
• What money you have coming in.
• What savings you have.

It is not based on how much rent you pay.

LHA will apply to most people making a new claim for Housing Benefit. A new claim for Housing Benefit may be made:

• by someone claiming for the first time
• by someone receiving benefit moving to a new address
• by someone who has had a break in their entitlement to Housing Benefit.
  A break in entitlement will normally occur where there is a temporary change in circumstances which results in the loss of Housing Benefit, for example an increase in earnings because of a temporary increase in hours.

LHA will not affect you if:

• Your rent has been registered as a 'fair rent'.
• Your tenancy started before 1989.
• You live somewhere where you are provided with care, support or supervision.
• You live in a caravan, mobile home or houseboat.

LHA may not apply if your rent includes an amount for meals.

Why is the number of rooms I live in important?

LHA is based on the number of bedrooms you need, not on how much your rent is. The number of bedrooms you need will be based on the number of people you have living with you. However, a maximum of four bedrooms can be considered in your application, even if the size of your family would normally require you to need more than four bedrooms. You can use the online bedroom calculator (opens in new window) to help you work out how many rooms your household will need.

Why is the area I live in important?

The Local Housing Allowance is based on rent levels for the area in which a person lives. These areas are set by The Valuation Office Agency and are known as Broad Rental Market Areas (BRMA's). You can find out which area your property is in by going to the LHA-direct website. An independent Rent Officer decides what the LHA is for different sizes of property in each area. It will be based on the rents that most people pay in your area. LHA will pay the same amount wherever you live in your area. For the current LHA rates see "Room Rates for Local Housing Allowance".

Why are my income and savings important?

The amount of weekly LHA that you get will depend on the level of your income and savings. If you receive income support, jobseekers allowance (income based), Employment Support Allowance (income related) or guarantee credit for pensioners your benefit will be based on the maximum LHA. We may make a deduction from your benefit for any other adults you have living with you.

How will Local Housing Allowance be paid?

LHA will usually be paid directly to you. It will be up to you to pay your rent to your landlord. If you don't pay your rent you may be evicted from the property.

If you do not already have one, you may want to open a bank account. That way you will be able to pay your rent to your landlord by direct debit or standing order. You can get advice about opening a bank account from any bank or building society of your choice.

If you are worried about managing your money, ask us if we can help. In special cases we may be able to pay your rent to your landlord see LHA Safeguard Guidelines.

What is the difference between Housing Benefit and Local Housing Allowance?

• Local Housing Allowance is fairer.
  You will get the same amount of benefit as other people living in your area with similar circumstances to you.
• Local Housing Allowance gives you more choice.
  You will be able to choose the quality and price of your accommodation and shop around with your LHA. For example you can choose to pay more than the LHA you receive and rent a more expensive property by funding the difference between the LHA and the rent yourself. Or you can choose to rent a property where the rent is the same as the LHA.
• Local Housing Allowance is clearer.
  You will know the maximum LHA you are entitled to before you look for a property to rent so you will know which property you can afford. Please note that maximum LHA is reduced if your income exceeds the prescribed level or you have non-dependants living with you.
• Local Housing Allowance gives you more financial responsibility.
  LHA will usually be paid direct to you and it is up to you to pay the rent to your landlord in the same way as other tenants who do not get benefit.

Local Housing Allowance changes from April 2011

The Government amended the Housing Benefit (HB) legislation on the 30 November 2010 bringing into effect changes starting in April 2011.

For new claims made from April 2011 these changes will:

• end the maximum £15 weekly Housing Benefit top up paid to people whose rent is less than the Local Housing Allowance (LHA).
• limit housing benefit for private tenants to the cheapest 30 per cent of local properties, rather than the cheapest 50 per cent (technically the 30th percentile of rents rather than the median).
• allow an additional bedroom within the size criteria used to assess HB claims in the private rented sector when a disabled person, or someone with a long term health condition, has a proven need for overnight care and this is provided by a non-resident carer.
• reduce the amount of Housing Benefit you can receive by introducing maximum caps so that LHA weekly rates in any area cannot be more than:
  • £250 for anyone needing a one bedroom property
  • £290 for anyone needing a two bedroom property
  • £340 for anyone needing a three bedroom property
  • £400 for anyone needing a four bedroom or larger property.

If you are already in receipt of Housing Benefit

You will receive a period of up to nine months' transitional protection from the anniversary date of the claim.

Example

If a claim is made in December 2010, the anniversary date will be December 2011. Nine months later, in September 2012, the transitional protection would end and the rent would be restricted as described above.

Top up

You will stop receiving the maximum £15 weekly Housing Benefit top up paid to people whose rent is less than the LHA at the anniversary date of the claim.

Please be aware that the date when the rent will be restricted can change. If there is a change in circumstances, for example if you move, break your claim or someone joins or leaves your household, then the rent could be reduced sooner.

For more information see Directgov's webpage on Local Housing Allowance and the LHA-direct website.

For further information:

• Contact: Benefit Team Leader, Town Hall, Penrith CA11 7QF
• Telephone: 01768 212131
• Email: benefits@eden.gov.uk
• Fax: 01768 890470