Local Housing Allowance - Information Update

Welcome to the Benefits Service update on the new Local Housing Allowance (LHA). We will post all the latest information we have on this page, as well as sending out updates in the mail and attending Landords Forums. 

Local Housing Allowance
A New Scheme for Private Tenants

What is Local Housing Allowance

Local Housing Allowance has been brought in by the Government and is the new scheme for Housing Benefit for tenants in privately rented accommodation. The change will only affect you if you rent your home from a private landlord and you make a new claim for Housing Benefit or you are already claiming Housing Benefit and you change your address with effect from 7 April 2008.

Local Housing Allowance has been introduced to give tenants more choice in where they live and to be fairer. With Local Housing Allowance:

• you will be entitled to the same amount of Benefit as people in the same circumstances as you
• you can find out how much Benefit you can get before you rent a property
• you can decide how much of your Benefit you want to spend on renting a property
• you will get your Benefit paid to you and it is up to you to pay the rent to your landlord
• you will find out about your Benefit more quickly than before

The new rules will not apply to:

• Local Authority tenants
• Tenants of Registered Social Landlords (Housing Associations)
• Tenants who have a registered or 'fair' rent
• Tenancies that started before January 1989
• Protected cases such as supported housing provided by social landlords, charities or voluntary organisations
• Tenancies in caravans, houseboats or hostels. LHA may not apply if the rent includes an amount for board and/or lodgings.

What are the Changes 

With Local Housing Allowance, your Benefit is not just based on the property you live in.  We will look at:

• who lives with you
• which area you live in
• how much money you have coming in
• what savings you have.

Other things may affect the amount of Benefit you are entitled to, such as:

• how much your rent is
• whether anyone living with you is expected to contribute to your rent.

LHA is based on the number of bedrooms you need and the area you live in, not on how much your rent is. The number of bedrooms you need will be based on the number of people you have living with you. One bedroom will be needed for:

• each adult couple
• any other adult (aged 16 or over)
• any two children under 10
• any two children of the same sex aged 10 to 15
• or for any other child.

For example:

Family A -single parent with one child would need 2 bedrooms.
Family B - couple with 1 girl aged 6 and 1 boy aged 8 would need 2 bedrooms.
Family C - couple with 1 girl aged 6 and 1 boy aged 12 would need 3 bedrooms.

In the above example Family A & B would receive the 2 bedroomed LHA rate and Family C would receive the 3 bedroomed rate.

Single people under 25 will receive the "shared room" LHA rate - replacing the current "single room rent" level.

Anybody who rents a shared room tenancy will receive the "shared room" LHA rate regardless of how many people are in the household.

To calculate the number of bedrooms needed for your family you can use the Rent Service bedroom calculator by clicking on the following link

New methods of Payment

If LHA applies to you, your Benefit will be paid directly into your Bank or Building Society account. You will no longer have the choice of direct payments to the landlord. If you do not already have a Bank or Building Society account, you should set one up. That way you can arrange to pay the rent to your landlord automatically, using a standing order. The payments we make to you will normally be made by BACS (direct transfer to your bank account), which will mean that there are no postal delays to worry about, or waiting for a cheque to clear. The money is available as soon as it arrives in your account.

It is then up to you to pay your rent to your landlord.  If you do not use your Benefit to pay your rent, your landlord may take you to court or try to evict you and you may lose your home. Your Benefit will always be paid to you unless you are likely to have difficulty paying your rent. If you are worried about managing your money, please contact us to see if we can help. In some cases we may be able to pay your rent to your landlord.

You can get advice about opening and running a bank account from any Bank or Building Society. You can also get advice from your local Citizens Advice Bureau who has agreed to help LHA customers with all financial matters.

If you already get Housing Benefit and you move to a new address or there is another change in your circumstances, you should tell us straightaway. You may need to make a new claim for Housing Benefit

Broad Rental Market Area

Each local Authority will be divided into Broad Rental Market Areas (BRMA) and an independent Rent Officer will be responsible for setting the individual LHA rates for each BRMA.

The LHA rates within each area will be set monthly and only apply to that BRMA. Sedgefield has been given two BRMAs - Durham and Darlington. These areas will be based on postcodes that will not be finalised until February.

Currently if you live in the DL5 area, it will be the Darlington LHA rate you will use, the remainder of the Borough will use the Durham LHA rate

The link below shows the Local Housing Allowance rates for Durham and Darlington.  These are provisional rates only, not from April 2008. This will appear every month in the Inform and on our website with the LHA rates for the following month, even if there is no change in the rate.

Prospective tenants will be able to shop around with their allowance. If they find a property they like with a rent that exceeds their LHA they will need to make up the difference themselves - as they do now. But if they find somewhere with a rent below their allowance, they will be able to keep the difference up to a maximum of £15.00 per week.

For example- if the rate of LHA is £100 but the rent charged is £70, the maximum LHA will be £85.

We have a range of leaflets about LHA that are available from Council offices or download from the list below:

• LHA - An Introduction
• Working out LHA
• Working out LHA as a Couple
• Working out LHA for 25 or over
• Working out LHA for under 25.
• Working out LHA for care leavers under 22
• LHA - Money Advice for Tenants
• LHA - Information for Private Landlords
• Rights and Responsibilities
• Difficulty paying Rent
• LHA - Reviews and Appeals

For more information you can contact the LHA Project Team (Graeme Lythe, Ann Hutchinson or Ian Porter ) on 01388 816166 extension 4532.