Benefits - Local Housing Allowance
This new scheme started on Mon 7th April 2008
Local Housing Allowance (LHA) is the new way we work out
Housing Benefit for tenants renting
accommodation from a private landlord. This scheme started
in Bath & North East Somerset on 7th April 2008 and affects
the following:
- All new claims for Housing Benefit for privately rented
accommodation.
- Claimants already getting Housing Benefit who change address
and move into privately rented accommodation.
- Claimants in privately rented accommodation who have a break in
their claim and reapply for Housing Benefit.
Where can I find more information?
These web pages have been designed to provide you with all the
information you need to know about LHA and why it's been
introduced.
Leaflets are also available for you to read and download from
the National Benefit Leaflets website.
How will the new Local Housing Allowance affect
you?
Are you a.....
How is the Local Housing Allowance calculated?
LHA is a flat-rate rent allowance determined by the Rent Service
based primarily on property location and the size criteria
(number of people living there).
Location
England is broken up into a number of Broad Rental Market
Areas (BRMA). Bath & North East Somerset Council will
have two BRMA's. The Rent Officer sets the level of rents in a
BRMA which are published on a monthly basis.
The latest LHA rates are published at the beginning of each
month on the LHA rates
page.
The LHA award is valid for one year and will then be reviewed in
accordance with the LHA level applicable at the time. The Rent
Officer sets the LHA rates based on the median of
rents for the area.
The way we work out Housing Benefit using income and savings is
not changing. The only thing that is changing is the way we work
out maximum Housing Benefit. You will still need to give us details
about your income, household and savings and let us know about any
changes in your circumstances.
Why have the Government decided to make
this change?
The Government wanted to streamline the process in order to
promote:
- Fairness – by paying similar rent to tenants in similar
circumstances.
- Choice – pre-determined rates of payment allow claimants to
choose accommodation to suit their budget.
- Transparency – by making it easier for tenants to find out in
advance what their eligible rent will be.
- Personal Responsibility – by making tenants take responsibility
for budgeting for, and paying their own rent.
- Financial Inclusion – to encourage tenants to have their
Housing Benefit paid into a bank account and set up a standing
order to pay rent to their landlord.
- Simplicity – the LHA scheme aims to streamline the present
complicated system.
Over the last two decades, the process for establishing the
maximum rent that can be paid by a Local Authority has been
considered by many observers to have become overly complicated and
difficult to understand. Furthermore the arrangement whereby Local
Authorities pay Housing Benefit direct to a landlord for privately
rented properties has, in many cases, resulted in claimants having
(a) no direct involvement in paying their rent and (b) exerting
less control over their financial affairs.
The Government has acknowledged these shortcomings in the system
and has sought to reverse this process in the Welfare Reform Act 2007, and more
specifically through the introduction of this national LHA
scheme.
The LHA scheme was piloted from 2004
in 18 pathfinder authorities. Claimants found that
they had a better understanding of the benefit system and more
control over their finances. The pilot studies showed:
- It operated well in all 18 Local Authorities.
- Processing times reduced and claims were paid more
quickly.
- The demand for Discretionary Housing Payments decreased.
- Average rent shortfall under the LHA scheme has
reduced.
- 91% of claimants in receipt of LHA operate a
bank/building society account which has given them more
control over their own finances.
- More tenants have been able to meet their
rent under the LHA programme.
- Little evidence of increased eviction or
homelessness.
