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.
Following a successful pilot, the LHA scheme will be phased in all over the country from 7 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.
Initially, the LHA scheme will run alongside the current Housing Benefit scheme.
From 7 April 2008 we are introducing LHA for tenants who make a new claim and rent properties from private landlords in the deregulated private sector.
Existing Private Sector tenants will continue on the current scheme until they change address to another private landlord property or their claim ends for one week or more and they make a new one.
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Why is LHA being introduced?
LHA is being 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 are:
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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 will get LHA?
Local Housing Allowance (LHA) will apply to:
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private tenants who make a new claim on or after 7 April 2008
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existing Housing Benefit claimants in private tenancies who have a break in their claim of more than a week starting on or after 7 April 2008
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existing Housing Benefit claimants who move to a new private tenancy on or after 7 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, 2 January 1989.
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Who will not be affected by LHA?
Other private tenants already getting Housing Benefit will carry on getting it under the old rules until one of the above applies.
The following types of tenants will still get Housing Benefit (there are no plans at present to change them over to LHA):
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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 2 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
If a person claims LHA for what appears to be board and lodgings the local authority will refer the claim to the rent officer to determine if it is eligible for LHA. Most will not be, however, the claimant can still claim 'normal' Housing Benefit for board and lodging.
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