What is Local Housing Allowance (LHA)?
Local Housing Allowance (LHA) is a change in the way Housing Benefit is calculated for private tenants but, instead of calling it 'Housing Benefit for private tenants', it is called Local Housing Allowance.
The LHA scheme was phased in nationwide from 07 April 2008. It does not replace Housing Benefit: Council tenants, tenants of housing associations and some other tenants will continue to get 'normal' Housing Benefit.
From 07 April 2008, we introduced LHA for tenants who made a new claim and rented properties from private landlords in the deregulated private sector.
Existing Private Sector tenants continued on the current scheme until they:
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changed address to another private sector property or
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their claim ended for one week or more and they then made a new one.
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Why was LHA introduced?
LHA was introduced to increase responsibility, place choice firmly in the hands of tenants and help develop the skills to make the transition into work. The objectives were:
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fairness – to pay similar amounts to tenants with similar circumstances
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choice – to allow tenants to choose between price and quality of accommodation
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transparency – easier for tenants (before they commit themselves to a property) and landlords to find out how much rent could be covered by LHA
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personal responsibility – making tenants take responsibility for budgeting for and paying their own rent
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financial inclusion – to encourage private tenants to have their housing payments paid into a bank account and set up a standing order to pay the rent to their landlord
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improved administration and reduced barriers to work – a simpler system helps to speed up the administration of housing payments giving private tenants more confidence when starting a job that any in-work benefit will be paid quickly.
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Who gets LHA?
Local Housing Allowance (LHA) applies to:
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all private tenants who make a new claim on or after 07 April 2008
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existing Housing Benefit claimants in private sector tenancies who have a break in their claim of more than a week starting on or after 07 April 2008
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existing Housing Benefit claimants who move to a new private sector tenancy on or after 07 April 2008.
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Who counts as a private tenant?
A private tenant is someone renting accommodation from a private landlord/agent in the deregulated sector. By deregulated, we mean where you have entered into a tenancy agreement with a private landlord on, or after, 02 January 1989.
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Who will not be affected by LHA?
Existing private tenants already getting Housing Benefit before 07 April 2008 carried on getting it under the old rules until one of the above applied.
The following types of tenants also still get Housing Benefit:
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Council tenants
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Housing Association tenants
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tenants who have a registered fair rent
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tenancies that started before 02 January 1989
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tenancies where care, supervision or support is included
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tenancies of caravans, mobile homes or houseboats
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tenancies where a 'substantial' part of the rent is for board and attendance.
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Changes to Local Housing Allowance from April 2012 – Local Housing Allowance (LHA) rates freeze
Up to March 2012, the Rent Service Scotland set the LHA rates each month.
There has been a change in the law which means that the rates set for April 2012 will apply for all of 2012/13 and will not be changed until April 2013.
Further changes to Local Housing Allowance from January 2012
From January 2012 a further change is proposed:
Single people with no resident children who live alone and are aged 25 to 34 will have their LHA rate set at the shared accommodation rate, rather than the one bedroom self-contained rate. This is a lower figure.
You can see the current shared rate if you click the link below and you can also see how it compares with the one bedroom self-contained rate.
Changes to Local Housing Allowance from April 2011
From 01 April 2011, there were a number of changes to the existing scheme:
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the end of the maximum £15 weekly Housing Benefit excess that some customers can receive under the LHA arrangements
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the removal of the five bedroom LHA rate so that the maximum level is capped at the four bedroom property rate
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the introduction of absolute caps so that LHA weekly rates in any area cannot exceed:
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£250 for a one bedroom property
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£290 for a two bedroom property
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£340 for a three bedroom property
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£400 for a four bedroom property
The LHA rates in the Falkirk Council area are currently set well below these levels.
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a change in the method of calculating the LHA rates will reduce the amount of LHA used to calculate claims for all sizes of properties by between approx £3 and £12 per week, depending on the size criteria that applies to your household.
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a change to help disabled people who have a carer who stays overnight but who doesn't normally live with them. In most cases, where a property has been rented with a bedroom for the carer, the LHA rate used to calculate an award will reflect this.
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LHA rates|
This will normally affect current claimants when their claim is first due to be reviewed after 01 January 2012.
It will affect all those who make a new claim or move address on or after 01 January 2012 immediately.
Exceptions?
There are some limited exceptions. These include:
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You get the severe disability premium in your benefit because you are entitled to the middle or higher rate care component of the Disability Living Allowance.
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You need an extra bedroom for a carer who provides you with the overnight care you need but who doesn’t normally live with you.
We have set up a Local Housing Allowance Hotline to deal with enquiries. Contact us on 01324 506903.
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