Local Housing Allowance There are now a number of pilot areas, known as 'Pathfinder' Authorities, for a new housing benefit (HB) scheme called local housing allowance (LHA). This factsheet sets out the main points of the LHA scheme which is expected to be rolled out nationally in April 2008. What is LHA? People living in private sector rented accommodation in Pathfinder areas have their entitlement to HB assessed in a different way to the rest of the country and tenants in other sectors. The actual allowance paid is subject to a means test, as with normal HB, but the standard allowance is the same for everyone in the area, regardless of property size or the actual rent charged. The government aim for LHA is to introduce a simpler system than the current one for HB and also to promote choice. You can choose between paying more to live in a larger property or decide to rent a property where the rent is lower than the LHA and keep the difference. Currently there is no limit on how much you can keep when you choose a lower rent property but when the scheme is rolled out nationally the maximum difference the tenant can keep will be capped at £15 a week. Where are the pilot areas? The pilot areas are known as 'Pathfinder' Authorities. Currently there are 18 of these, which were introduced in two stages. The first nine pilots introduced were at: Blackpool, Lewisham, Coventry, Teignbridge, Brighton & Hove, Edinburgh, NE Lincolnshire, Conwy and Leeds. Since April 2005 there are additional pilots at Argyll & Bute, East Riding of Yorkshire, Guildford, Norwich, Pembrokeshire, Salford, S. Norfolk, St. Helens and Wandsworth. Which properties can get LHA? LHA applies only to properties in the deregulated private sector. There are no plans to extend the scheme to tenants in social housing at present, although the government is looking at ways of ‘encouraging tenants to take greater personal responsibility for managing their own rent payments’. Currently LHA does not apply to:
Benefit for these properties will be calculated under the existing housing benefit scheme. How is LHA assessed? The amount of LHA is dependant on the number of rooms a claimant/claimant's family needs, the area where he or she lives, their income and savings and whether someone lives with them who is not a dependant. The number of rooms you need The number of rooms that the tenant qualifies for (the size criteria) are one bedroom for every:
In addition 1-3 occupiers are entitled to one living room, 4-6 occupiers are entitled to two living rooms and 7 or more occupiers are entitled to three living rooms. Kitchens and bathrooms are not counted in the assessment. Joint tenants receive a proportion of the rate payable for a property of the size applicable to all the tenants together. When LHA is rolled out nationally the property size criteria will be based solely on the number of bedrooms, not the number of bedrooms and living rooms. This may affect the rates of the LHA payable to larger families. The area where you live Because, within a Pathfinder Authority, rent levels for types of property may vary, the Rent Officer will identify Broad Rental Market Areas (BRMA) which are clearly definable by postcode and which contain a mix of accommodation. Lewisham, for example, will have two BRMAs. Once these BRMAs have been allocated a LHA figure will be assigned, according to a set formula. Basically this will be an average rent for different sizes of accommodation. This figure will be reviewed every month by the rent officer and notified to the Local Authority so that it can be made public for landlords and tenants to view. However once someone makes a claim for help with rent on a particular property an assessment will remain unchanged for a year. Claimants under 25 years of age Most single claimants who are under 25 years of age will be entitled to the standard rate for a room in shared accommodation where the tenant has a room or bedsit of their own with shared use of kitchen, bathroom, toilet, and living room. There are some exceptions to this rule (including people who get severe disability premium). Single claimants aged 25 years and over, and couples with no dependent children will get the rate for a 2 room property. Payment of LHA The rent will be paid to the tenant rather than the landlord, though there will be some safeguards for landlords to prevent non-payment by tenants. Direct payments will still be made to a landlord where the claimant is 8 weeks or more in arrears with the rent. The landlord will also receive payments where the tenant is unlikely to pay their rent, or where it is thought they will have difficulty in managing their affairs i.e. vulnerable. It will be up to the local authority to decide both of these criteria. Possible concerns over LHA Despite the Government's laudable aim of encouraging greater responsibility there are some tenants who will fall into arrears under the new scheme. Of particular concern would be vulnerable tenants, since it will be up to a cash strapped, priority led, possibly under-resourced Local Authority to identify such cases. The effect of non-payment by vulnerable tenants may be increased harassment from landlords who will not know whether any delay in payment is due to a delay in housing benefit, or due to non-payment by the tenant. Ultimately it could lead to eviction. The right of a tenant to choose his or her accommodation in order to gain financial benefit may help some, but could force those who have a low income into substandard accommodation for a lower rent. This in turn may affect the health of the claimant and any other family members. It might even lead to a creation of new ghettos because the condition of the property will be taken out of any rent assessment. Another concern about the pilot scheme is that once the LHA rates are set for an area there is no right of appeal. Under the current rent officer determination scheme it is possible to ask for a re-determination. Other rights of appeal, such as about assessments of income or capital, are unchanged. Where can I get help with local housing allowance? You can get help at a local advice centre, such as a citizen's advice bureau. You can get more information about this from our factsheet F15, Finding a local advice centre, which is available at www.cara-online.org. March 2008 |