Changes to Local Housing Allowance
The government’s Welfare Reform programme has already had a significant effect on Local Housing Allowance (LHA) with more changes yet to be implemented.
The changes so far:
01 April 2011
Several changes came into affect on this date:
The excess Housing Benefit (HB) payment of up to £15 per week was removed
The 5 bedroom LHA rate was removed so that the maximum level is capped at the four bedroom property rate
Absolute caps were introduced so that LHA weekly rates in any area cannot exceed:
£250 for a one bedroom property
£290 for a two bedroom property
£340 for a three bedroom property
£400 for a four bedroom property
However, the LHA rates in the Falkirk Council area are currently set well below these levels so this did not impact upon any of our private tenants.
LHA rates were previously calculated using the 50th percentile but were re-assessed on the 30th percentile thereby reducing the LHA levels. This measure was introduced to encourage landlords to reduce rents so that about 3 in 10 properties for rent in the area should be affordable to people on Housing Benefit rather than every 5 in 10 properties as was the case before.
Additional financial assistance was introduced for disabled people who have a carer who occasionally stays overnight but who doesn't normally live with the claimant. In these cases, an additional room allowance is included in the assessment for LHA.
The government allowed a new criterion which allows Local Authorities (LA's) to make payment of LHA direct to landlords where the landlord sets or reduces the rent to an affordable level for a claimant on LHA.
01 January 2012
Single people with no resident children who live alone and who have not yet reached the age of 35 have had their LHA rate set at the shared accommodation rate, rather than the one bedroom rate. Previously this restriction only applied to those aged less than 25 years. This means that we can only pay LHA at £60 per week for the shared room rate instead of the 1 bedroom rate of £86.54 per week and the shortfall is expected to be met by the tenant.
However, it may be possible for a claimant to be awarded a Discretionary Housing Payment to assist them to meet the shortfall and a Discretionary Housing Payment Application Form can be downloaded from the Forms and Leaflets page or by contacting the office on 01324 506900.
01 April 2012
Local Housing Allowance (LHA) rates were previously up rated monthly, however from this date, they are now up rated annually meaning the rates will remain static between April 2012 and March 2013.
Still to come:
01 April 2013
Benefit Cap - Introduction of a Benefit Cap for all working age claimants in both the private and public sector.
The cap is set at £500 per week for couples and lone parents and £350 per week for single claimants and will take account of various state benefits including Housing Benefit (Local Housing Allowance).
The Department of Work & Pensions (DWP) have identified those claimants potentially affected by the cap and wrote to 67,000 households in the UK in July and again in September to advise them of this impending change.
Draft regulations have been issued for consultation and initial data scans have been passed to Local Authorities identifying those households potentially affected.
Revenues and Benefits Division will issue letters to claimants in November. We plan to offer a cross service interview comprising of Housing Options advice and Debt and Budgeting advice.
More information about the proposals can be found on the DirectGov website.
Size Criteria – already in place within the LHA rules in the private sector, this restriction will now be applied to working age claimants renting from the council and Registered Social Landlords where a deduction from their HB will be made if they are deemed to be under occupying their home from 01 April 2013.
If a claimant has 1 extra bedroom, a 14% reduction to the eligible rent used to assess Housing Benefit will be applied. If the claimant has 2 or more extra bedrooms, the reduction will be 25%. This could mean that people who were previously in receipt of maximum Housing Benefit and therefore had no rent to pay, may now have to pay rent to their Local Authority or to their Housing Association.
The draft regulations have been published and we are currently working to identify those Council Tenants likely to be affected and we will issue letters in October 2012. If you have any queries on this specific change, you can email us at firstname.lastname@example.org.
In November we will work with the Registered Social Landlords to identify their tenants who will be affected and notify those claimants by letter.
Abolition of Council Tax Benefit - CTB will be replaced by the Council Tax Reduction Scheme (CTR) which is a national scheme devolved to the Scottish Government. There will be an interim scheme introduced from April 2013 with a longer term module implemented from 2014. Draft Regulations have been issued for consultation.
Discretionary Housing Payments (DHP) – Revenues and Benefits Division have administered DHP since its introduction in 2001. It is a finite amount of funding given to LA's each year to provide further financial assistance to those claimants who are not currently receiving maximum HB/CTB. To mitigate the impact of the various Welfare Reform changes, the DWP have increased the DHP budget considerably in 2012/2013 with further increases pending in 2013/2014 and 2014/2015 already announced. For more information see the Discretionary Housing Payments (DHP) pages.
You can also use the links below to read more information about the proposals on the DirectGov website:
If you want a summary timetable of all the Welfare reform changes announced, with the key target dates, see our Forthcoming changes affecting benefits 2011-2017 (PDF, 41KB) leaflet.