Information for landlords
Housing Benefit has changed from April 2008
The Government has changed Housing Benefit to make it fairer and easier to use.
Local Housing Allowance (LHA) is a new way of working out Housing Benefit. It will only apply to tenants in the deregulated private sector who make a new claim for Housing Benefit or who change address on or after 7 April 2008.
It is a flat rate allowance towards rent costs based on:
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the area in which the property is located
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who lives with the tenant
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what money they have coming in
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what savings they have
LHA is not based on the rent charged by the landlord so the Housing Benefit that your tenants receive may be higher or lower than the contractual rent.
The rate of LHA that tenants receive will be reviewed annually.
Why is the location of property important?
The area in which the property is located will be known as the Broad Rental Market Area (BRMA). It is expected that Kennet will be part of five BRMA’s
The Rent Service will be responsible for calculating the LHA for each BRMA, which will be based on the average rent for that particular area depending on the size of the property.
Why is the number of bedrooms the tenant needs important?
LHA will be based on the number of bedrooms a tenant needs, dependent upon the number of people they have living with them. If their rent is less than the LHA for the type of property they need, they will be able to keep the extra money, up to a maximum of £15 per week. If the rent is more than the LHA, they will normally have to pay the extra themselves.
The Council will publish the LHA rates each month so that landlords and their prospective tenants will know how much of their rent can be covered by LHA.
Why are the changes being made?
LHA is part of the Government’s agenda to modernise public services. It is a radical reform of the assistance given to people on low incomes with their housing costs and was designed to be fairer and easier.
• LHA is Fairer –The maximum amount of LHA paid to tenants will be based on the size, composition and location of their household. Therefore, two households in similar circumstances in the same area will be entitled to similar amounts of benefit.
• LHA provides more choice – Tenants will be able to choose how to spend their income in a similar way to tenants who are not in receipt of benefits. If they find a property they like, but the rent exceeds their LHA, they will know that they need to make up the difference; if they choose a property with a rent below the LHA they will be able to keep the difference, up to the maximum of £15 per week.
• LHA is clearer – A clear and transparent set of allowances will help landlords and tenants know how much financial help is available. Customers will know how much LHA they are entitled to before they look for a property to rent so they will know which properties they can afford.
They will be able to compare how much support is available towards their housing costs in different areas and for different property sizes.
• LHA encourages personal responsibility – LHA will generally be paid to the tenant and it will be up to them to pay the rent to their landlord in the same way as tenants who do not get benefit.
• LHA assists with financial inclusion – Customers will be encouraged to have their Housing Benefit paid into a bank account and to set up a standing order or direct debit to pay their rent to their landlord. This has the advantage of being a safe and secure method of payment and provides certainty for landlords that rent will be paid.
• LHA will reduce barriers to work – Greater certainty about what in-work benefit they could receive is hoped to encourage customers to return to work.
• LHA is simpler – There will no longer be a need for the complex rent restrictions and individual referrals to the Rent Service that contribute to the delay in processing claims from private tenants.
Which landlords will be affected by LHA?
LHA affects any landlord who enters into a deregulated private tenancy agreement with a person entitled to Housing Benefit on or after 7 April 2008
Who will not be affected by LHA?
If you provide accommodation in one of the following tenancy types, your tenants will be exempt from LHA.
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tenancies with registered social landlords
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protected cases, such as supported housing provided by certain local authorities, social landlords, charities and voluntary organisations
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tenancies excluded from current rent restrictions (such as pre-1989 tenancies)
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tenancies in caravans, houseboats and hostels
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tenancies where the Rent Service decides that a substantial part of the rent is for board and attendance, such as hotel accommodation.
Customers with these types of tenancies will continue to be assessed for Housing Benefit under the existing rules.
How will LHA be paid?
Because LHA is intended to encourage personal responsibility and financial inclusion, it will generally be paid to the tenant. This is to encourage them to take greater responsibility for managing their financial affairs in the same way as other tenants do. This should also help to equip people of working age with the skills they need when they move into work.
Customers will no longer be able to request that their Housing Benefit be paid direct to their landlord.
Will there be exceptions?
Some tenants will have problems with the responsibility of paying the rent themselves. In order to safeguard these tenants, the Council will use its discretion to decide whether there is evidence that it is in the tenant’s interest to pay their LHA direct to their landlord.
There are four circumstances when the Council will consider whether it will be in the tenant’s best interests to make direct payments:
1. Difficulty managing their financial affairs
The tenant may have learning difficulties, a medical condition or educational needs that suggest that they may have difficulty managing their financial affairs; or they may not be able to read or have language difficulties; or they may suffer from drug or alcohol addiction; or have debt problems.
The existence of any of these factors does not necessarily mean that rent will be paid directly to the landlord.
2. Unlikely to pay.
Some tenants may be unlikely to pay their rent. They may have consistently failed to pay their rent in the past or they may have other debts or cash flow problems. In such cases, the Council may make payments direct to the landlord. However, it will not be sufficient to make direct payments simply because the tenant has said they will not pay their rent.
3. Rent arrears of 8 weeks or more
As now, if a tenant has built up rent arrears of 8 weeks or more, the Council will be able to make payments direct to the landlord, unless it is not in the tenant’s overriding interests to do so.
4. Deductions from DWP for rent arrears
If a landlord is receiving deductions from a tenant’s Income Support, Job Seekers Allowance or Pension Credit to cover rent arrears, the Council can pay LHA direct to the landlord
The Council will need written evidence to make a decision. Once we have collected the evidence we will decide as quickly as possible whether it will be in the tenant’s best interest to pay their LHA direct to their landlord. Each request will be considered on its own merits and reviewed periodically.
Further information
You can get further information on LHA from the Benefit Section on
Telephone number 01380 724911, Option 1 for benefits
Email benefits@kennet.gov.uk
Or write to us at
Kennet District Council
Browfort
Bath Road
Devizes
Wiltshire, SN10 2AT
You can also get information at the following websites:
Department of Work and Pensions – www.dwp.gov.uk/housingbenefit/lha
The Rent Service – www.therentservice.gov.uk