Local Housing Allowance
The Local Housing Allowance (LHA) is a new way of deciding rent payments for people receiving Housing Benefit who pay rent to a private landlord. For the past 2 years the scheme has been tested in 18 Local Authorities and will roll out nationally on 7 April 2008.
Local Housing Allowance will be based on the area in which you live and the number of people living within your household. A flat rate allowance will be used to decide the amount of benefit you will receive.
Other circumstances, such as your income or other people living within your household will continue to affect the final amount of benefit paid, therefore, you may not always receive the full amount of LHA.
Fairness – The scheme will pay the same amount to tenants with similar circumstances living in the same area.
Choice – Tenants will be able to choose between paying more rent to stay in a property that is larger than they qualify for and paying the difference in rent to their landlord or staying in a smaller property and keeping the difference. This is because it is possible for the LHA rate paid to be higher than the rent charged, however, this excess is restricted to a maximum of £15.00 per week.
Transparency – It will be easier for tenants and landlords to know in advance how much rent Housing Benefit would cover.
Personal Responsibility – It will empower tenants to budget for essential items such as accommodation and to pay their rent themselves thus developing the skills unemployed tenants will need as they move into work.
Improved Administration – There will no longer be a need for the Local Authority to refer the rent charged for individual properties to the Rent Officer (excludes board and attendance cases). This will simplify the procedure and could improve processing time for claims.
LHA will apply to deregulated private sector tenants only. Tenancies in the social sector are exempt, for example council tenants and housing association tenants. Tenants renting within these sectors will continue to receive Housing Benefit under the existing rules.
Will benefit claims be transferred to the LHA immediately?
No, not immediately. Existing claimants will continue to receive benefit under the current rules until they have a break in their claim of one week or more or they move to a new address. All first time claims will be paid using the LHA regulations.
The LHA rates will be calculated by the Rent Service for individual areas. These areas are known as Broad Rental Market Areas. They will be based on the median rent charged by landlords for each property size within the BRMA. The rates will be forwarded to the Local Authority on a monthly basis and will be used when calculating claims received within that month. Once a claim has been calculated the LHA rate used will be valid for that claim for 52 weeks at which point it will be reviewed using the current rates at that time.
There is one BRMA for Ayrshire.
The main change is that we will take into account the number of bedrooms required for your household. This will determine which rate of LHA should be used to establish your maximum eligible rent.
When counting the number of bedrooms required for a household one bedroom will be counted for:
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Every adult couple
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Any other adult aged 16 or over
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Any two children of the same sex
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Any two children, regardless of sex, aged under 10
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Any other child
For example a couple with a child aged 14 would be entitled to the LHA rate for a two bedroom property.
A single claimant aged less than 25 will be entitled to the standard rate for a bedroom in shared accommodation.
Single claimants aged over 25 and care leavers aged less than 22 will be entitled to the standard rate for a one bedroom property provided they actually rent a property of at least that size. If the property is shared then only the shared accommodation rate would be paid.
Changes from 6 April 2009
From 6 April 2009, the maximum Housing Benefit payable under Local Housing Allowance will be capped at the five-bedroom rate.
If a customer who requires more than five bedrooms makes a new claim or changes address on or after 6 April 2009 their claim will be assessed based on the five-bedroom rate.
Customers who are already in receipt of LHA at more than the five-bedroom rate, will continue to receive that rate until their claim is reviewed. This will normally be at the anniversary date unless there are changes in their circumstances that make a review necessary earlier.
Will there be any appeal rights against the levels of allowances for each Broad Rental Market Area?
No, because any decision made would have to be implemented to all claimants. As each BRMA covers an area and property size, this will include other claimants who have not appealed and are content with their allowance.
You may keep the excess you are paid up to a maximum of £15.00 per week. This excess is not normally taken into account when deciding other benefits.
What if my benefit is lower than my rent?
You will be expected to make up any short fall out of any other income you have. You may, alternatively, choose to move to cheaper accommodation.
What will happen if I use my benefit for something else?
Your benefit is for you to pay your rent with. If you do not pay your rent, your landlord may take you to court or try to evict you and you may lose your home. You may wish to consider setting up a standing order from your bank account to pay your rent on a regular basis. If you do not have a bank account then all major banks will help you open one.
The LHA is a flat rate allowance and is not based on the rent your landlord actually charges for your property. This means that your LHA rate would not change. Your LHA rate will be reviewed 52 weeks from the claim start date and will then be based on the LHA rates at that time./P>
The LHA will be paid directly to you. The choice of having payments made directly to your landlord will no longer exist under Local Housing Allowance. It can only be paid directly to your landlord if the council considers that you are:
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unable to manage your affairs
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unlikely to pay your rent or
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8 weeks or more in arrears with your rent.
If you believe that you meet any of the above criteria you, or someone on your behalf, will need to complete an Application for Payment of Local Housing Allowance to Your Landlord form. The decision is at the discretion of the Benefit Service and will be made in accordance with our Local Housing Allowance Safeguard Policy.
If you have not met your full rent liability for the period covered by your first payment of Local Housing Allowance then we can send you a cheque made payable to your landlord. You should then pass this cheque to your landlord to pay your rent. This will only happen if you have not met your rent liability andit would be in the interests of the efficient administration of housing benefit.
The preferred method of payment will be by Bank Automatic Clearing Services (BACS) directly into your bank account or building society account. This is the safest and easiest way to receive your benefit as it avoids the risk of cheques being lost, stolen or delayed in the post. Alternatively payment can be made by cheque.
If the LHA is paid directly to the landlord, will any excess be included in those payments?
No, not normally. Where a payment is made directly to your landlord it must not include any amount above which you are liable to pay for your rent. The excess can only be included where you have rent arrears but only until those arrears have been cleared.
The regulations on recovery of overpayments have not changed. Currently:
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Benefit overpaid to a landlord can either be recovered from the landlord or the claimant dependant on the circumstances
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Benefit overpaid to the claimant can only be recovered from the claimant irrespective of the circumstances.
Since the majority of claimants will receive their benefit direct under the LHA, most overpayments will be recovered from the claimant and not the landlord.
Remember, if you are getting Housing Benefit or Council Tax Benefit and you move to a new address or other circumstances change, you must tell us straight away. You may need to make a new claim for Housing Benefit.
If you would like any additional information regarding Local Housing Allowance please telephone the Benefits Service on 0845 603 0595 or send an email to benefits@north-ayrshire.gov.uk