Local Housing Allowance (LHA)

What is Local Housing Allowance?

The Local Housing Allowance (LHA) scheme is being introduced nationally from 7^th April 2008 for some private sector tenants. This scheme is a new way of calculating how much Housing Benefit you will be entitled to. It has been designed to be a fairer and simpler way of working out your entitlement.

Will LHA apply to me?

LHA will apply to everyone who claims Housing Benefit after the 7^th April 2008 onwards unless:

Your tenancy started before 15^th January 1989
You rent from a Housing Association
You rent from Chester & District Housing Trust
You live in some types of supported accommodation
You live in a caravan, a houseboat or a hostel
Your tenancy includes a substantial amount for meals

You will be affected by LHA if you:

Are a tenant of a private rented property and make a new claim for Housing Benefit
Currently receiving Housing Benefit and change address within the private rented sector

Why is LHA being introduced?

LHA gives tenants more choice in where they live and it’s fairer too. This is because:

You will be entitled to the same amount of Housing Benefit as other people in the same circumstances as you.
You can find out how much Housing Benefit you can get before you rent a property.
You can decide on how much of your Housing benefit you want to spend on renting a property.
You will usually get your Housing Benefit paid directly to you. You will then need to pay this to your landlord for your rent.
You will find out about your Housing Benefit more quickly than before.

How will LHA work?

The amount of LHA that you can receive depends on the following:

Who lives with you in your household
What income your household has coming in
What savings you and your partner have
What area you live in

The Rent Service will provide the Council with a list of rates based on the number of bedrooms your household needs and the area in which you live. We will be provided with these rates monthly but your rate will be set from the start of your claim and only change once a year, unless your circumstances change and you need a different number of bedrooms.

How many bedrooms will I need?

We will calculate the number of bedrooms that your household needs. This will be one bedroom for each of the following:

Every adult couple (married or unmarried)
Any other adult aged 16 or over
2 children aged under 10
2 children of the same sex until they reach 16
Any other child

Each person is only counted once. If you live in one room with shared facilities you will receive a shared room rate, which also applies if you are under 25 and living on your own.

What if my rent is higher than the LHA rate?

If your rent is higher you can only receive the LHA rate. It is based purely on bedroom requirements. The rate for your bedroom requirement will be the maximum you receive however please refer to the section on Discretionary Housing Payments.

If you have a rent increase this will not normally change the rate of LHA but we do still need to be notified of any rent increases or decreases.

What if my rent is lower than the LHA rate?

If the rent you are charged is lower than the LHA rate your household needs because of your bedroom requirement then you can receive up to £15 difference between your rent and the LHA rate.

How will my Housing Benefit be paid?

Under LHA your Housing Benefit will normally be paid direct into your bank account. If you don’t have a bank account at present you will need to open one. If you need help with this, please let us know. A bank account allows your Housing Benefit to be paid faster and more securely.

You will then need to pay your rent to your landlord, this can be done by:

Setting up a standing order or direct debit. This is the easiest way to ensure your rent is paid on time and you will have proof of payment from your bank statements
Withdrawing cash & paying it to your landlord (remember to get a receipt)
Paying your landlord by cheque (remember to get a receipt)

Can a landlord be paid direct?

LHA will be paid to the tenant except in specific circumstances. These circumstances include:

the tenant falls into the equivalent of 8 weeks rent arrears
if the tenant is ‘vulnerable’
if we have a proven history that the tenant is unlikely to pay their rent.

How does LHA affect landlords?

The only change for most landlords is that payment of Housing Benefit will be paid direct to the tenant. If you already receive payments of Housing Benefit in respect of existing tenants, this will not change.

What protection exists for landlords?

There is a range of safeguards to protect the interests of landlords. Some of these already exist. For example, we must pay Housing Benefit to the landlord if the tenant is eight weeks or more in arrears with their rent (we will require proof of this).

Payment may be made direct to the landlord where we decide that the tenant is likely to have difficulty in managing their affairs or unlikely to pay their rent.

We recommend that, if a tenant is starting to build up rent arrears, you should get in touch with us before it gets to eight weeks. This will allow us to investigate whether there is a problem that needs addressing.

We will decide whether a tenant is likely to have difficulty in paying their rent. Evidence will be required to support a request, which can be made by the tenant or other interested party. We will take into account knowledge and evidence available to us at the time, including any known past history when making our decision.

Where direct payments are made to the landlord, how long will they be paid for?

Where a tenant is considered likely to have difficulty in paying their rent and there is little or no prospect of this situation changing, payment to the landlord is likely to be long term.

Where the situation is likely to be temporary or where rent arrears of more than eight weeks have been repaid, the payment direct to the landlord will be reviewed. If the tenant is in a better position to have their benefit paid direct to themselves and to pay their rent in full, on time, direct payments to the landlord will stop.

What appeal rights do I have against a payment decision?

Appeal rights are not changing as a result of LHA. You still have the right to appeal against a decision by us not to make payments direct.

Where can I get more information?

You can contact us in any of the following ways: