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Local housing allowance

This guide covers the detailed regulations of Local Housing Allowance introduced nationally, applicable criteria, size categories, how LHA works, calculations, reassessment, direct payments, challenging restrictions, and achieving aims for fairness, choice, transparency, personal responsibility, financial inclusion, and better administration.

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Local housing allowance

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  1. Local housing allowance Sarah Clarke Solicitor CPAG

  2. LHA – new rent restriction rules • Introduced nationally s 30 WRA • Existing pathfinder regs in Sched 10 HB regs • Replaced by new draft regs amending HB regs mostly in: • The Social Security (LHA and Information Sharing) Amendment Regs 2007 • Rent Officers (HB Functions) Amendment Order 2007

  3. LHA Applies where claimant after 7/4/08: • Makes a new claim • Moves house NB Other changes in circs do not move claimants on to LHA. G10/2008 claimants can withdraw claim and make fresh claim under LHA with a week’s gap

  4. Exclusions and exemptions • No restrictions – LA, HA, RA protected tenancies etc • Exempt tenancies under pre-Jan 96 rules – Charities and voluntary organisations with care, support and supervision • Tenancies still under LRR Caravans, houseboats, hostels Non-excluded HAs

  5. How does LHA work? • On 20/3/08 and as often after as appropriate Rent Officer determines one or more broad rental market areas within LA • BRMA is: • 2 or more distinct areas of residential accommodation • Within which person could reasonably be expected to live… • Containing residential premises of a variety of types/tenancies

  6. LHA • RO tells LA postcodes contained within each BRMA • RO compiles list of rents for assured tenancies within BRMA in reasonable repair of same size as LHA categories assuming no-one entitled to HB, excluding payments for services • LHA is the median for that category • RO provides LA with list of LHAs monthly

  7. LHA • For properties over 5 beds – RO can provide if thinks necessary or LA applies to RO for LHA • LA publishes LHAs (See also lha-direct.therentservice.gov.uk) • LA refers to ROs for board and lodging determinations

  8. Size criteria One bedroom for each of the following: • A couple • A person over 16 • 2 children of same sex • 2 children under 10 • A child

  9. Which LHA category applies? One bedroom shared accommodation for single claimants under 25 unless: • qualify for SDP • under 22 and in care of LA after 16 Couples in shared accommodation

  10. Which LHA category applies? One bedroom self contained accommodation for • Single claimants over 25, couples if • They rent 2 rooms or one room + bathroom, toilet, kitchen • Care leavers under 22, under 25s who qualify for SDP, regardless of size property rented

  11. Which LHA category applies? LHA for the no of bedrooms allowed by the size criteria for: • Couples with children • Lone parents • Households with non-Ds

  12. LHA Eligible rent/maximum HB is: • LHA for BRMA for claimant’s postcode of appropriate size Orif lower • Rent liable to pay rent plus £15

  13. LHA - How to calculate HB Elsie, 28 shares with 3 friends, rent £200 per Week, ie £50 each. E earns £100 a week. LHA = one bed = £75 Cap rent = £50 + £15 = £65 Maximum rent Applicable amount = £60.50 Income less disregard = £95 AA - Income = £34.50 x 65% = £22.42 HB = £65 - £22.42 = £42.58

  14. When is LHA reassessed? LHA lasts a year. It is reassessed when: • No in household changes • Change of address • Anniversary of claim Change in circs also changes anniversary date

  15. Delay applying LHA Where claimant could afford rent when moved in • No restrictions for 13 weeks Where member of claimant’s household/linked person dies • no reduction in LHA for 12 months

  16. Direct payments – or not • Rules on when direct payments must be made stay the same • Direct payments may be made where LA thinks • Claimant likely to have difficulty managing financial affairs • Improbable claimant will pay rent • Direct payment already made under reg 95

  17. Challenging a rent restriction No appeal against decision on LHA amount Can appeal connected LA decisions – ie whether claimant is young individual

  18. Will the LHA achieve its aims? • Fairness – iron out inconsistencies in the local reference rent – households in same circumstances get same amount • Choice - allow claimants to “shop” for better value accommodation • Transparency – simpler system of published rates - claimants know in advance what they will get • Personal responsibility – ending direct payments to encourage tenants to take responsibility for paying rent • Financial inclusion – promoting payments through bank accounts by standing order - secure payment • Better administration – simpler system should allow easier administration • Reduced barriers to work – greater certainty about help available, better administration avoiding delays on starting work, helping people move to take up employment opportunities.

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