Local Housing Allowance limits the maximum Housing Benefit you can receive in the private rented sector.
If you can rent a place cheaply though, you could pocket up to £15 per week of the saved Housing Benefit in cash.
Important Point
Local Housing Allowance is a new method of establishing the maximum level of Housing Benefit
It does not replace Housing Benefit nor does it create a new form of Housing Benefit
Local Housing Allowance is a new way to work out maximum Housing Benefit entitlement.
It was introduced on Monday 7th April 2008
It applies to private rented sector only; not to council housing, housing associations or registered social landlords.
It is based on number of bedrooms needed (note – in pilot schemes, living rooms needed were calculated too)
It is not based on the actual rent being charged
It is paid to tenant, not directly to landlord (except in special circumstances, see below).
It will be applied to (for private rented sector):
- All new Housing Benefit claims from 7th April 2008 onwards
- Existing claimants who change address from 7th April 2008 onwards
- Claimants who have a break in their claim of one week or more. E.g. through a break in signing on. That makes it important to fight for a backdate in those circumstances.
A change in rent level or lease terms will not cause you to switch to Local Housing Allowance – be sure to appeal if an Housing Benefit office ever attempts that.
Local Housing Allowance does not apply to council housing, housing associations, registered social landlords, homeless hostels.
Local Housing Allowance is a flat rate allowance calculated by the local authority Rent Registration Service using criteria of:
- The number of bedrooms needed in claimants circumstances
- Room rates for these within Broad Rental Market Area. For Glaswegians, all of Glasgow is treated as one area.
Number of bedrooms needed in claimants circumstances is calculated as one bedroom for every
- Adult couple
- Other adult aged 16 or over
- Any two children of the same sex up to 16
- Any two children regardless of sex under 10
- Any other child
Note that there is no extra allowance for tenants with disabilities.
A one bedroom shared (bedsit) rate applies to single claimants under 25.
But you are exempted from that if you:
- Qualify for severe disablement premium; or
- Have a non dependent with you; or
- Are under 22 and were formerly in care.
You are also subjected to the one bedroom shared (bedsit) rate if you happen to actually be living in a shared/bedsit flat and are single over 25 or are a couple. The same exemptions as above apply.
Local Housing Allowance rates are set monthly by Glasgow City Council (for Glasgow) and published on their website.
Their rates for June2008 are:
Size Criteria – Weekly Room Rate
Shared Accommodation (bedsit) – £ 69.23
1 Bedroom – £ 92.31
2 Bedrooms – £118.85
3 Bedrooms – £135.00
4 Bedrooms – £200.00
5 Bedrooms – £230.77
Delays in applying Local Housing Allowance level
You can get full rent paid for first 13 weeks of Housing Benefit claim, if the rent could be met when you started renting, and if you have no Housing Benefit claim in previous 52 weeks.
And there is a 12 month delay in any adjustments to Local Housing Allowance levels after the death of a family/close relative who lived in the accommodation.
Reassessment of your Local Housing Allowance figure is carried out every 12 months.
An immediate reassessment (an instant Local Housing Allowance change) is carried out for a:
- Change of dwelling
- Change of number of rooms required (death excepted)
No reassessment is carried out for a rent increase.
Example – John and Mary have two children, Susan aged 15 and Claire aged 12.
The number of bedrooms needed is two. So they are assessed as entitled to £115.38 Local Housing Allowance
Susan turns 16 – they number of bedrooms needed is now three = £132.69 Local Housing Allowance.
That reassessment is meant to be carried out automatically by Housing Benefit office. But in practice they may need prompting.
Free Money
Local Housing Allowance figure need not be actual maximum rent for Housing Benefit purposes
Claimant will actually be entitled to the lower of:
- Local Housing Allowance figure; or
- Contractual rent plus £15.
Example: Bob rents a bedsit for £55 a week. His Local Housing Allowance figure is the bedsit rate of £66.92.
He is entitled to the lower of £55+£15 or £66.92 – which means he is entitled to £66.92 even though he isn’t paying that much to his landlord.
The difference – up to £15 – is kept by the claimant as extra money, and does not count for deductions from other benefits. Note that in the pilot schemes more than £15 could be kept by the tenant, but that has been cut for the real roll out.
On the other hand many tenants will find they loose out under the Local Housing Allowance rules and will be topping up their actual rent payments from out of their other benefits.
Safeguards
Local Housing Allowance Housing Benefit is paid to the tenant. The tenant then (supposedly) pays rent on to the landlord.
It can be paid to the landlord when:
- The Local Authority considers the tenant is likely to have difficulty managing their affairs (so e.g. mental health, drug/alcohol, debt, gambling issues); or
- The tenant has fallen 8 weeks into rent arrears; or
- The tenant has a history of falling into arrears.
Refusal to pay direct to landlord is appealable.
Backdating
If Housing Benefit is backdated before 7th April 2008 it will be assessed under the old rules rather than Local Housing Allowance.
If Housing Benefit is backdated to after 7th April 2008, it will be based on Local Housing Allowance monthly rental figures from the month of the backdate.
Appeals
It is not possible to appeal against the level set in the published Local Housing Allowance monthly rental figures
You can appeal other decisions: e.g. number of bedrooms needed, whether there is a non dependent living there, claimants income, etc.
You have one month to lodge an appeal (12 months for late appeals with reasons for the lateness).
Glasgow City Council have set up a public enquiry line for Local Housing Allowance: 0141 287 3525.
Related Tips
1) Many people who do not receive full Housing Benefit because they are in receipt of a works pension, would get the full Housing Benefit if they could only qualify for the disabled or carers premiums. For the disabled premiums that requires applying for Disability Living Allowance. Note that Housing Benefit Carers Premium is paid even if Carers Allowance is not paid (because of means testing of it) – it is enough simply to show you have an underlying entitlement to Carers Premium, by filling out a Carers Allowance application form.
2) For all Housing Benefit claims, but perhaps especially relevant for Local Housing Allowance issues, the Local Authority can make extra payments to top up Housing Benefit through its Discretionary Housing Payments scheme. In Glasgow the form for that is available online.
To me, what’s key is that it will move “undesirables” who require housing benefit into ghettoes as these will be the only areas where they can afford the rent.
The huge size of the area is also suspect, it even includes a huge swathe of East Renfrewshire. Because the way they’re calculating the rents is by ?taking an average? that brings the LHA down in posher areas, moving people from the affluent suburbs, or other areas being gentrified.
As far as I can tell the old rent reference areas were more local, and therefore didn’t have that affect.
Think the section about LHA levels being set by Glasgow council is incorrect – it’s set by the Local Rent office. Only a minor point, but it may be helpful to someone.
More a question than a comment:
I rent from a private landlord and claim housing benefit as well as incapacity benefit and DLA (low rate). I have never had a break in my claim for housing benefit and yet I have not only been ‘told’ that I will now fall under the new LHA but that there is someone coming around to my address to ‘help’ me fill out a form….
The Rent Officer has not visited me since 02 and now says that the house Irent is ‘too big for me’ and my benefit amount has gradually decreased approx £100 over the past few months.
I have never had any help before filling out forms and am wondering ‘why now’ and is everyone else who claims benefit getting a visit too?
Was very interested to read your initial commment that if the benefits office try to change me from my present benefit to the LHA that I should appeal?
would appreciate your ideas.
some landlords say “no dss”,how do they know the tenant gets benefit if they dont tell them?
So you can get this housing allowance if you live in Greenock area and are thinking of renting a bedsit for £55, funnily enough I had a phone call for a bedsit at that price today. A two bed house split into 2 bedsits, shared everything else. Will the housing just give me the full amount even though if they know the rent is only 55 quid.
At the end of the day I don’t want to end up in court for fraud for diddling the benefits office. And Greenock Sherriff court frequently has cases of benefit fraud for paltry amounts that could just be settled out of court.
My concern is that the goverment insisst on a housing policy ,eg when applying for a house with a housing assoc or council they say same/diffent sex can not share after the age of 11 . People may only have to rent a house where their is 3 bedrooms and it may only be a 5 person unit but their could be six people living in the house .eg , girl age 2 ,girl age 14 , 2 boys age 5&6 mum &dad .They clearly need a four bedroom . This sinario also contains 2 children with disabilities as well as dad .The new system does not allow for this eg .The system says they only need a three bedroom. This is then over crowding a contridiction to the goverments housing policy .I think the scheme has some good points but where their is diabled children their is no allowance made.I find the system to dicrimnate against people with disabilties .
I’m having real problems with the Glasgow Housing Department. I’m under 25 so only qualify for the shared rate but I qualify for the severe disablement premium so I should be exempt from this and get the 1 bed rate. I’ve phoned the office twice now but they keep telling me that is not true and that premiums are not considered if you are under 25. I don’t know where they are getting their information as even the Glasgow City Council states that I should be getting the 1 bed rate. Time to go to the Citizens’ Advice Beureau methinks.
A landlord can ask for an employer’s reference to find out if you’re on DSS.
Where I live in London (SE13) some big new private developments have become ghettoised as described above by fleabite, creating a nightmare for owner occupiers who are in some cases in properties with huge negative equity, which will be bought by professional landlords at a knockdown price, further ghettoising the area.
Landlords peg their prices to the rent scales, meaning few people will get the £15 per week. This is likely to lead to tension between landlord and tenant.
This also means the resale value of a property is in effect being decided by rent officers.
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I’m not sure where the theme is from. I believe a lot of it is custom. We’ll be giving it a clean up soon as well.