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What is Local Housing Allowance (LHA)?
LHA is a new way of working out housing benefit for people on low incomes who rent from private landlords. It takes into account the area they live in and the number of people occupying their property, although the amount of housing benefit paid is still assessed, as before, based on income, savings and household composition.
Aims of the LHA scheme
- Fairness
The new scheme will generally pay the same amount to tenants in similar circumstances living in the same area.
- Choice
Tenants will be able to choose between paying more to stay in a property that is larger or keeping the difference if they move to a cheaper property (up to a maximum of £15 per week).
- Transparency
It will be easier for tenants and landlords to know in advance how much rent housing benefit could cover.
- Personal responsibility
Empowering people to budget for and to pay their rent themselves, rather than having it paid for them, helps develop the skills unemployed tenants will need as they move into work.
- Simplicity
There will no longer be a need to refer to the Rent Service.
Who will LHA apply to?
LHA is for people on a low income living in private rented accommodation and claiming housing benefit for the first time or moving home after 7 April 2008.
Who will LHA not apply to?
You cannot get LHA if you:
- are a council or housing association tenant;
- have a tenancy that started before 1989;
- live in a caravan, mobile home or houseboat;
- live in supported housing provided by social landlords, charities or voluntary organisations who also provide care, support or supervision;
- are a mhs homes tenant and your tenancy started before 1989.
Housing benefit will continue to be paid under the existing scheme for tenants in these categories.
How much LHA can I get?
The amount of LHA you can get depends on:
- who lives with you,
- what area you live in,
- what money you have coming in,
- what savings you have.
LHA depends not on how much rent you pay but on the LHA rate for the area you live in. The LHA rates are set by an independent rent officer, based on local rents. Medway Revenues and Benefits Service will be advised of these every month and people will be able to see how much they could expect to receive as a maximum. The Rent Officer LHA website (http://lha-direct.therentservice.gov.uk) has a link to LHA direct search functions where rates can be found for each area.
Size criteria
An important factor in deciding LHA is the size of the accommodation you occupy. One bedroom is allowed for each of the following (counting each person only once in the first group they come in):
- a couple,
- someone who is more than 16 years old,
- two children of the same sex up to the age of 16 years,
- two children who are younger than 10 years old,
- a child (under 16 years old).
There is a separate LHA rate for one room where some facilities are shared. This will apply to people who are under 25 years old and who live on their own. They will receive this allowance as well as anyone else who is living in non-self-contained accommodation or in a single-room studio flat.
Once the LHA has been applied to a claim, it will continue to apply at that rate for one year, irrespective of any increase in the rent. After this period it will be reviewed again.
A new LHA can be set within this one year period if:
- you move,
- a child reaches the age of 10 or 16 years,
- a household member arrives or departs,
- there is a change in the relationship between existing occupiers.
How will payment be made?
LHA will, on most occasions, be paid directly to the tenant and it will no longer be possible to have payments made straight to the landlord. The payments will be made either straight into the tenant's bank account or by cheque.
This will mean that that the responsibility to make sure that rent is paid will now lie with the tenant. One of the safest and most reliable ways of doing this is to set up a standing order straight from a bank account.
If you do not have a bank account and require further information you can find advice at the Financial Services Authority's website (www.fsa.gov.uk) or contac them on 0845 606 1234.
In cases where you are considered vulnerable (pdf 106KB), we may consider paying your landlord direct. Tenants and landlords have the right to appeal against our decision as to whether a tenant is vulnerable or unlikely to pay their rent. We are required to make payments directly to your landlord if you build up rent arrears of eight weeks or more.
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