North Ayrshire Council

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Housing Benefit Information for Landlords

The Benefits Service are carrying out a Customer Satisfaction Survey to help us understand how we can better serve our customers. We would appreciate it if you could take a few minutes to complete the survey on line. The results of the survey will be posted on our website, and at our office at Cunninghame House. We plan to do this every quarter.

The Local Housing Allowance (LHA)

The LHA is a new method of calculating the eligible rent for private tenants receiving rent allowance. It applies across Great Britain to all new Housing Benefit (HB) claims, and to existing claimants that change address on or after 7 April 2008. It does not affect –

• Housing Associations
• Tenancies where the landlord is a not-for-profit organisation and also provides the tenants with care, support and supervision
• Tenancies started before 2 January 1989
• Residents of houseboats, caravans, mobile homes or hostels
• Tenancies where the Rent Officer has decided a substantial part of the rent is for meals

The LHA has two main points:

1. It is based on a "flat rate payment"
2. It is generally paid directly to the tenant 

This is so tenants have a choice about where they live and can take the responsibility for paying their rent.

 

The Rent Officer will calculate the average rental value across the Broad Rental Market Area (BRMA) for a variety of different sized dwellings. The BRMA for North Ayrshire is set across the whole of Ayrshire, and the categories of dwellings are as follows –

•  One bedroom accommodation where the kitchen, bathroom and toilet are shared
•  One bedroom self – contained accommodation
•  Two bedroom accommodation
•  Three bedroom accommodation
•  Four bedroom accommodation

Since  April 2011 the maximum size of property has been restricted to Four bedroom accommodation. See the Local Housing Allowance page for more details.

Changes to Housing Benefit from January 2012

The Government has changed the rules that apply to single people living in self-contained accommodation and aged 25 or more, but under 35. This means that they will only be entitled to the lower rate of Housing Benefit for a room in shared accommodation.

If you tenant is single and aged 25 or more, but under 35, when his/her Local Housing Allowance (LHA) is reassessed from January 2012 onwards, this change will apply , unless yhe/she is covered by one of the exemptions. 

The change means that  he/she will move onto the LHA rate for shared accommodation in this area, which may be much lower.

The date that this will take effect varies depending on the circumstances of his/her claim:

 

1. New claims from under 35 year olds made on or after 1st January 2012 will be assessed on the shared room rate straight away.

2. Existing claims at 1st January 2012 under 35 who receive transitional protection will move on to the shared room rate at the end of the transitional protection period.

3. Existing claims at 1st January 2012 under 35 who do not receive transitional protection will move to the shared room rate on the anniversary date of their claim.

4. Existing claims at 1st January 2012 for pre LHA cases will move to the shared accomodation rate on the annual review of their claim.

 

Certain people under 35 are exempt from the change:-

• Households with children
• Households with non-dependants
• Young people leaving care, until they are 22 years old
• A person who qualifies for the Severe Disability Premium in their Housing Benefit, Income Support or Job Seekers Allowance
• A person who requires a overnight carer
• A person who has spent 3 months or more in a homeless hostel, where that person has engaged with rehabilitation and resettlement support services

We cannot tell you the exact rate for shared accommodation, as this varies from month to month. However, the current shared accommodation rate for property in this area is £64.00 (as at November 2011), which will give you an indication of the likely rate next year. There is more information about the change and about the current shared accommodation rates in different parts of the country on DirectGov (under local housing allowance).

  

The rates are re-calculated every month, and the figures for  December 2011 (PDF 124Kb) and January 2012 (PDF 124Kb) are available on this website.

The LHA is calculated with regard to a room rate dependant upon the number of occupiers that reside with the claimant. One bedroom is allowed for each of the following –

• A couple
• A single person aged 16 or over
• Two children under 16 of the same sex
• Two children under 10 of opposite sexes
• A child under 16

The claimant's eligible rent is then calculated as a "Maximum Rent (LHA)". This is the lower of either –

• The Room Rate (as calculated above), or
• The tenant's rent

The Maximum Rent (LHA) is the starting point for the HB calculation and if the claimant has income above his needs, or a non-dependant deduction is made, then his HB will be reduced.

Payment to the Landlord

For LHA cases, the tenant's general right to request their HB be sent to their landlord is removed and can only be done under certain circumstances. This is a Regulation from the Department of Work and Pensions.

When the Benefits Service must pay LHA to the Landlord

The HB Regulations go onto state when LHA must be paid directly to the Landlord, unless the Benefits Service consider the Landlord is not a "fit and proper person" to be the recipient of a payment. These are –

• When an amount of the claimant's (or partner's) Income Support, Employment and Support Allowance or Jobseeker's Allowance is paid directly to the Landlord , or
  
•  When the above does not apply and the tenant has rent arrears equivalent to 8 weeks or more of his rent, unless it is in the overriding interest of the claimant not to pay the landlord.

 When the claimant's LHA is higher than their weekly rent the Benefits Service cannot pay more than the weekly rent to the Landlord.

 

If a Landlord thinks a tenant that is 8 weeks in arrears is in receipt of Housing Benefit then they should inform the Benefits Service immediately. Likewise if a Landlord thinks that a tenant is unlikely to pay his rent, the Landlord should also inform the Benefits Service.

When the Benefits Service may pay LHA to the Landlord

The Benefits Service are allowed to pay LHA directly to the Landlord in the following circumstances –

1. The claimant has stopped living at the address where the LHA was payable, LHA has not been paid to the claimant already and  the claimant has left arrears. In this case the amount payable to the Landlord cannot exceed the level of arrears owed. 
2. When the Benefits Service considers that the claimant has not paid their rent for the period of the claim, and it is in the interests of efficient housing benefit administration, the Service can send the first cheque following a new claim or change of address payable to the Landlord, to the claimant.
3. The current LHA has previously been paid to the Landlord (because of 8 weeks arrears or benefit deductions)
4. The Benefits Service considers that the claimant is likely to have difficulty in relation to the management of his financial affairs
5. The Benefits Service considers that it is improbable that the claimant will pay his rent
6. The Benefits Service considers that it will assist the claimant in securing or retaining a tenancy

The Benefits Service Safeguard Policy (PDF 85Kb) covers points 4,5 and 6 above

 

When the Benefits Service has information that either point 4 or 5 above may apply then payment can be made to the Landlord for a period of up to 8 weeks whilst due consideration is given to the case.

Payment to the Landlord upon the claimant's death

When HB has been paid directly to the Landlord and the claimant has died then the balance of any outstanding HB, up to the level of the rent outstanding, will be paid to the Landlord upon written application.

The duty of Landlords to report changes in circumstances 

As a person in receipt of "sums payable by way of HB" the Landlord is under a duty to report any changes in circumstances in writing that they might reasonably be expected to know might affect the claimant's entitlement. Tell us about any changes in this change of circumstances form (PDF 36.8Kb)

Non recoverable overpayments 

When an overpayment of HB is incurred the Benefits Service will usually seek to recover the sum, however some overpayments are legally classified as non – recoverable and cannot be recovered. A non – recoverable overpayment is one that meets the following criteria –

•  The overpayment arose as a result of an official error, and
•  The claimant or payee could not reasonably have been expected to know they were being overpaid, and
•  The claimant or payee did not cause or contribute to the error

Recovery of overpayments from a Landlord

When HB has been paid to the Landlord the Benefits Service may recover the overpayment from the Landlord when

• The overpayment was caused by misrepresentation or a failure to declare a material fact and the Landlord is a person that made the misrepresentation, or failed to declare the material fact, or
  
• In the case of an overpayment caused by an "official error", the Landlord is a person that could reasonably have been expected to know there was an overpayment.
  
• When neither of the two points apply, the Benefits Service can recover from either the claimant or the Landlord

However, there are restrictions on when the Benefits Service can recover an overpayment from a Landlord;

• In the case of an LHA award, the Benefit Service cannot recover more from the Landlord than the Landlord has received. (for example, if the tenant has received the extra £15, this cannot be recovered from the Landlord.
  
•  An overpayment cannot be recovered from a Landlord when the following circumstances exist:

1. The Landlord has notified the Benefits Service or the DWP in writing that he suspects there has been an overpayment, and
2. The Benefits Service is satisfied the overpayment did not occur through a change of address, and
3. The Benefits Service is satisfied that the overpayment was caused fraudulently or dishonestly, and
4. The Benefits Service is satisfied that the Landlord did not collude or act to cause the overpayment

Method of recovery from landlords

When the Benefits Service decides that an overpayment is recoverable and will be recovered from a Landlord, then the usual method of recovery is to reduce the Landlord's next payment schedule. When a Landlord has no other tenants receiving HB then recovery will be sought by an invoice.

 

When recovery is made by deduction to a Landlord's schedule of payments, the Landlord must treat the tenants for whom HB has been paid as having received their full entitlement. These tenants are called "blameless tenants" since they are not the people to whom the overpayment relates.

 

When a tenant's HB entitlement is reduced by a weekly figure, for example £3.30 or £9.90 per week, then this will constitute recovery from the claimant, rather than recovery from the Landlord.

Appeal rights of Landlords 

HB decisions carry a general right of appeal which extends for one month from the date the decision is made. There are three actions which can be taken during this period –

1. A written statement of reasons can be requested which will give the precise reasons for the decision in dispute
2. A request can be made that the Benefits Service revise the decision
3. An Appeal at an independent Tribunal can be requested.

The matters on which a Landlord is a "person affected", and can therefore appeal, are generally limited to –

• Whether or not payments can be made directly to a Landlord
• Whether or not an overpayment is recoverable, and
• Whether or not a Landlord is a person from whom an overpayment may be recovered 

The information exchange between the Benefits Service and Landlords

Due to the constraints of the Data Protection Act and the general duty of confidentiality there is a limit to the information that the Benefits Service can disclose to a Landlord.

 

The information that can be provided is generally restricted to –

• Confirmation that payment is to be made to the Landlord, and the timing and amount of the payment, and
• Details of a recoverable overpayment 

It must be remembered that whilst the Benefits Service provides HB for tenants to pay their rent with, the Service is not a party to the contract between the tenant and the Landlord. Therefore a Landlord's first obligation in enforcing the rent liability is to take the matter up with the tenant.

 

The Benefits Service does not keep records of "bad" tenants and tenants that are said to have caused Landlords difficulties, and it is the duty of a Landlord to properly vet prospective tenants.

 

The Service does however recognise the important role that Private Landlords play in providing accommodation within North Ayrshire and we will always strive to provide the best and most helpful information possible.

 

If you have any suggestions for the Benefits Service, or require further information, please feel free to email us at benefits@north-ayrshire.gov.uk 

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