Local Housing Allowance

If you are renting a property or room from a private landlord, the Local Housing Allowance (LHA) is used to work out how much Housing Benefit you get.

 LHA is a flat rate allowance towards rent costs, based on the area where you live and the number of people who live with you. It is not based on the rent that your landlord charges for your property.

If you rent from a Housing Association or the council, rent a caravan or houseboat or have a tenancy which began before 1989, you will still claim Housing Benefit, which is based on the amount of rent that you are charged.

 LHA is calculated in the same way as Housing Benefit, based on your income, savings and a valid tenancy agreement.

Current Local Housing Allowance rates.

**Important changes from April 2011 and January 2012**

There have been some recent changes to Local Housing Allowance.  Follow the links for full details of the April 2011 and January 2012 changes.

How does Local Housing Allowance differ from Housing Benefit?

LHA is a flat rate allowance towards rent costs, based on the area where you live and the number of people who live with you. It is not based on the rent that your landlord charges for your property. The Rent Service does not need to look at your property to decide the amount of rent that will be used to calculate your benefit. 

LHA is designed to be fairer, to simplify the rules and to allow you more freedom - both financially, and when it comes to choosing where you want to live.

Your individual LHA rate is the starting point to work out your benefit. Entitlement rules are the same as for Housing Benefit - the calculation is based on your income and savings and proof of a valid tenancy.

LHA means that tenants living in the same area with similar circumstances receive broadly the same amount of benefit - under the old Housing Benefit scheme for private tenants, if you rented a smaller, less attractive property, you would often receive less benefit than someone who rented a larger or more attractive property in the same area, even though your family size and needs may have been similar.

LHA is normally paid in to your bank account, and you then arrange to pay your rent to your landlord. There are however safeguards in place so that a landlord may be paid directly in certain cases - this will protect vulnerable tenants.

Who is affected by Local Housing Allowance?

You will be affected if you rent from a private landlord and:

• You make a new claim for benefit, or 
• You have a break in your current claim, or
• You change address to privately rented accommodation

Who is not affected by Local Housing Allowance?

LHA does not apply if you:

• Pay your rent to a registered social landlord, such as East Midlands Housing Association
• Pay your rent to the council
• Pay a rent that has been registered as a 'fair rent'
• Have a tenancy that began before 1989
• Live in a hostel, caravan, mobile home or houseboat
• Live in accommodation where a large part of your rent is for board and attendance

How are Local Housing Allowance rates worked out?

Each council is divided into Broad Rental Market Areas (BRMA), usually based on postcode and set by the Rent Service. Each month, Rent Officers set LHA rates for each area so that you can see the amount of rent that LHA will cover. Both LHA Direct and the council publish these figures so that landlords and tenants can find out the amount of rent that the LHA will cover. This means that you can shop around for a rent you can afford, knowing what your allowance will be.

What is a Broad Rental Market Area?

A Broad Rental Market Area (BRMA) is based on a geographical area and how it accesses services such as hospitals, schools and shopping. North West Leicestershire District Council falls in to three areas - Leicester, Eastern Staffordshire and Derby. More information can be found on the LHA Direct website.

How are Local Housing Allowance amounts set?

LHA is a flat rate allowance based on the size of your household and the area in which you live (BRMA.) It depends on the number of people who live in your home and the number of bedrooms needed. This means that your LHA rate will be individual to you.

The number of people who live with you is used to work out the number of bedrooms needed.  The maximum number of bedrooms allowed is four.

One bedroom will be allowed for:

• Every adult couple (married or unmarried; same or opposite sex)
• Every other person aged 16 or over
• Any two children of the same sex
• Any two children regardless of sex under the age of 10
• Any other child

Current Local Housing Allowance rates.

Tenants aged under 25 (35 from January 2012) who live alone

If you are single and under 25 (35 from Jan 2012) years of age, you are entitled to the rate for a room in shared accommodation. This is the "shared room rate" and is based on properties where a tenant has a room of their own but shares all or some of the facilities (for example a living room, kitchen or bathroom).  There are however certain exemptions, such as if you are under 22 years of age and have just left the care of Social Services, or if you are severely disabled.

Tenants aged 25 (35 from January 2012) and over who live alone and couples with no dependent children

If you are a single tenant aged 25 (35 from Jan 2012) years and over, or a couple with no dependent children, you are entitled to the rate for a one-bedroom property provided that you actually rent a property of at least this size (for example a one bedroomed flat).

However, if you live in a property where all or some of the facilities are shared, you are only entitled to the "shared room rate".

How is the Local Housing Allowance rate used to work out my Housing Benefit?

Your maximum Housing Benefit is based on the LHA rate that applies to you for the month in which you make your claim. This rate will not usually change for 12 months unless there is a change in the number of bedrooms that you need. LHA and Housing Benefit are calculated in the same way. Your income, any savings you have and any non-dependants living with you may mean that you will not receive the full LHA rate once your entitlement is calculated. Your LHA rate is really the starting point for working out your Housing Benefit.

For example:

Your rent charge is	£95
Your LHA rate is	£80

This means that the maximum Housing Benefit you could receive is £80 and you would need to pay £15 per week yourself even if you were entitled to full benefit.

Examples - how benefit is calculated.

What if the Local Housing Allowance rate is more than the rent charged?

Your benefit will be calculated on the amount of rent charged.

For example:

Your rent charge is	£70
Your LHA rate is	£90

Your Housing Benefit will be based on £70.

Examples - how benefit is calculated.

Where can I find out about the rates?

The LHA Direct website has this information. Follow the links to "Find LHA Rates" and look for North West Leicestershire District Council, or search by postcode. The current rates are also shown here.

How do I claim?

You can download a claim form, telephone or call in the request one, or we can visit you at home to complete a form.

How will I be paid?

Local Housing Allowance is usually paid into your bank account, and you then arrange to pay your landlord.

What if I am unable to cope with paying my rent?

We know that some people struggle with the responsibility of budgeting their money and so there are some safeguards in place to protect vulnerable tenants. These safeguards allow us to pay your LHA to your landlord in certain limited circumstances.

What if I have rent arrears?

We will pay your landlord if you have rent arrears of eight weeks or more, if proof of this is provided. If your LHA exceeds the rent, we may pay your landlord any excess until your rent arrears are cleared.

Who makes the decision that payment should be made to my landlord?

If you have difficulty managing your own affairs, we may decide to pay your landlord. We need to see evidence that you would have difficulty. Some examples of people who can give evidence are:

• You
• Your family and friends
• Your landlord
• Welfare Groups including money advisors
• Social Services
• Your doctor
• Probation officers
• Job Centre Plus
• The Pension Service

Some examples of situations where we could look at paying directly to the landlord are:

• A medical condition (dementia or terminal illness for example)
• Addiction to drugs, alcohol or gambling
• Leaving prison
• Fleeing domestic violence
• A single person who has recently left Social Services care
• Severe debt problems
• Un-discharged bankruptcy
• Getting help from a homeless charity
• Unable to open a bank account (due to poor credit only)

If you feel that you are unable to manage your financial affairs, please contact us for guidance.

What happens if I don't have a bank account?

The Department for Work and Pensions (DWP) pays most benefits directly into a bank account. If you need help to open a bank account please refer to the Money Advice Service website or contact us for advice.

What appeal rights do I have against a decision?

Appeal rights are the same for LHA as for Housing Benefit. If you want to appeal you must let us know within one month of the decision letter.

You must write down the decision you are appealing against and the reasons for your appeal and make sure you sign it.

You can appeal against:

• The amount of benefit awarded, if you think it is wrong
• Our decision about who we pay benefit to, if you are the person affected by that decision.

You cannot appeal against:

• The LHA rates set for your area.

Where can I find out more information?

More information is available from the LHA Direct and Direct.gov websites, or please contact the Benefits Team.