What is Local Housing Allowance?

Local Housing Allowance (LHA) is a new way of working out Housing Benefit from 7 April 2008 for tenants renting accommodation from a private landlord. LHA will not replace housing benefit – it’s just a different way of calculating entitlement.

LHA has been successfully used to calculate Housing Benefit entitlement in a number of pathfinder Authorities since 2003.  There are 18 pathfinder sites and the nearest pathfinder Authority to Torbay is Teignbridge District Council who went live with LHA on 12 January 2004.

Why introduce LHA?

Fairness

Local Housing Allowance bases the maximum amount paid to tenants on the size, composition and location of the household. Therefore, two households in similar circumstances in the same area will be entitled to similar amounts of benefit.

Choice

Tenants are encouraged to take greater responsibility and choose how to spend their income in a similar way to tenants who are not in receipt of benefits. Like other tenants, they are able to choose whether to rent a larger property, or to spend less on housing and increase their available income.

Transparency

Tenants will be able to compare how much support is available towards their housing costs in different areas and for different property sizes having taken into account that if their LHA rate exceeds their rent then they can keep up to £15.00 of the difference.

Personal Responsibility

Empowering people to budget for and to pay their rent themselves, rather than having it paid for them, helps develop the skills unemployed tenants will need as they move into work. The Government believes that, wherever possible, Local Housing Allowance should be paid to tenants, as are most other benefits and tax credits.

Financial Inclusion

Ideally, the government wants to see housing payments paid into a tenant’s bank account and to set up a standing order to pay the 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.

Improved Administration and Reduced Barriers to Work

For working-age tenants, Local Housing Allowance provides greater certainty about what help is available in and out of work. The system is simpler and helps to speed up administration of housing payments, giving tenants more confidence when starting a job that any in-work benefit will be paid quickly. A more transparent system may also improve the ability of individuals to move between areas and to take advantage of employment opportunities.

Who is not affected by the new rules?

You will not be affected by LHA if:

• you are a council or housing association tenant or
• your tenancy started before 15 January 1989, OR
• you live in a caravan, mobile home or house boat or
• you live in a hostel or
• your rent includes a substantial charge for board and attendance e.g. hotel or guest house accommodation
• and tenants who are already receiving Housing Benefit before April 2008 as long as they do not have a break in entitlement or change address after April 2008

Who will be affected and when?

• any private tenant making a new claim for Housing Benefit on or after 7 April 2008
• any change of address on or after 7 April 2008
• any claim where there is a break in entitlement of a week or more on or after 7 April 2008

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Related Documents

Information for Landlords

Information for Tenants

To view any published Related Documents for this service you will require the appropriate software. To download this software please see our documents help page. All links to documents will open in a new window. To request documents and files in an alternative format please contact us using the contact information provided on this page.