HOUSING BENEFIT ANDCOUNCIL TAX BENEFIT

A guide to Local HousingAllowance for

Landlords and Agents

This leaflet explains the newway of working out HousingBenefit.This new way iscalled Local HousingAllowance. It will apply from7 April 2008 and will be thesame whichever area you livein. If you don’t know whichcouncil covers the area youlive in, you can find it on yourcouncil tax bill.

A guide to Local Housing Allowance forLandlords and Agents

What is Housing Benefit?

Housing Benefit is the help given to people withlow incomes and low savings to pay their rent.It is assessed based on their income, savings andthe people in their household.Within thiscalculation, there is a maximum amount ofbenefit they will be able to receive.

What is Local HousingAllowance?

Local Housing Allowance (LHA) is the new wayof working out the maximum Housing Benefityour tenant could get.Anyone affected by thenew rules will have their Housing Benefitworked out in this way, rather than the RentOfficer setting the level of benefit.

The Rent Service will issue maximum rent levelsfor all sizes of properties, and these will bepublished on every council’s website. Although

your tenant’s benefit will be worked out bytaking account of their income, savings and thepeople in their household, it will not be morethan the maximum amount of rent.

Also, under LHA rules, your tenant will receivetheir Housing Benefit payment direct, except incertain circumstances. Contact us for moreinformation about this.

Who will LHA apply to?

LHA will apply to new claims we receive on orafter 7 April 2008 from tenants who rentaccommodation from a private landlord. It alsoaffects tenants who are already getting HousingBenefit and who move into accommodation theyrent from a private landlord on or after 7 April2008.

Local Housing Allowance does not affect:

tenants of local-authority landlords(‘council tenants’);

tenants of registered social landlords;

some supported housing;

tenancies which started before 15 January1989 (2 January 1989 in Scotland);

tenants living in caravans, houseboats orhostels; or

tenancies where the Rent Officer hasdecided that a large part of the rent is formeals cooked for tenants.

These groups continue to have their HousingBenefit worked out under the existing rules.

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My tenant already receivesHousing Benefit.Will it change?

No, they will not be affected by the changes.Their Housing Benefit will continue under theexisting rules and you, as the landlord, cancontinue to receive the payments if this is whatyour tenant has chosen.

When your tenant changes address (even if thisis to a different place in the same building) orstops claiming Housing Benefit for one week ormore, the new LHA rules will apply.

How will LHA work?

The maximum amount of Housing Benefit yourtenant could receive will be set beforehand bythe Rent Officer. It will not depend on theamount of rent you charge.The maximumamount they could receive will be the same forevery same-size household in the area they livein, no matter what differences there are in theactual rent the different households pay.

Broad rental market areas

The Rent Service has divided the country intobroad rental market areas (BRMAs). These aremade up of a number of neighbourhoods. Ineach area there will be a wide mix of propertytypes within a reasonable distance of variouspublic services such as health, education, leisure,personal banking and shopping.

From the information that is collected, the rentamount that is at the middle point of the rentscharged in each area will be the figure that isused as the Local Housing Allowance rate.Therewill be a number of different rates for each areabased on the number of rooms each householdneeds.

The Rent Service will continually monitor thelocal rent market and update the Local HousingAllowance figures for each BRMA every month.The figures may go up or down or stay thesame.This does not mean that the LHA rate

applied to a person’s claim will change everymonth.A rate will be applied for the month theyclaim in, and will be reviewed each year.Thefigures will be advertised by the local council’sHousing Benefit office.

Number of rooms

We will decide how many rooms, according tothe Housing Benefit rules, the tenant will need.If they live in one room and share some facilities(for example, a kitchen or bathroom) withother people there is a special Local HousingAllowance rate. If they are under 25 and live ontheir own, they will also receive this rate.

If the above does not apply to them, we willwork out the number of rooms as shownbelow.

One bedroom for each of the following.

A couple

Someone who is 16 or over

Two children of the same sex until theyare 16

Two children who are younger than 10

A child (someone under 16)

Each person is only counted once, in the firstgroup that they would come into.

We do not count everyone in the house whenworking out how many rooms they need.Wecount the tenant and their partner, as well asany children or young people they areresponsible for. If the tenant has any otheradults who are not boarders or lodgers, we alsocount those. However, we do not count fosterchildren or joint tenants.

Which rate applies to mytenant?

The maximum Housing Benefit will be the LHArate for the number of rooms your tenantneeds in the broad rental market area they livein.

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The Rent Service will publish new LHA rateseach month.The rate that will apply to yourtenant will depend on the date they claim.Thiswill normally be the date that we received theclaim form or the date that the tenant firstasked to claim Housing Benefit, if they send theclaim form back within one month of this date.It does not matter if the date we will pay theirHousing Benefit is in the next month, theirbenefit will still be based on the rate thatapplied when they claimed.

The tenant’s rent is higher thanthe Local Housing Allowance.

The maximum benefit your tenant will receiveis the LHA rate for the size of their household,in their BRMA, for the month they claim in. Iftheir rent is more than this figure, it is up tothem to make up any shortfall. If you think theyare having difficulties with this, tell them tospeak to us or a citizens advice bureau.

The tenant’s rent is lower thanthe Local Housing Allowance.

If your tenant’s rent is lower than the LHArate, the maximum Housing Benefit they couldget is their rent, plus up to £15 a week.This isthe amount the Government has decided tolimit LHA at.They will not get more HousingBenefit than the LHA rate. If the LHA rate ismore than £15 a week over their rent, theywould only get £15 week on top of their rent.They do not have to give this extra money toyou.

ExampleRent = £90 a weekLHA = £120 a weekMaximum Housing Benefit = £105 a week

ExampleRent = £90 a weekLHA = £100 a weekMaximum Housing Benefit = £100 a week

I have decided to increase therent.Will my tenant’s HousingBenefit also increase to coverthis?

No, we will review your tenant’s LHA rate everyyear, using the date they claim.We will thenchange the LHA rate to the correct rate for thesize of the household in that month.We will onlyreview the rate at any other time if there aresignificant changes to the household (forexample, if a child turns 16 or somebody movesin).

My tenant has asked for theirclaim to be backdated.WhichLHA rate will apply?

This depends on whether they have asked fortheir claim to be backdated to a date before 7April 2008.

If we have decided to backdate their claim tobefore 7 April 2008, we will class the date theyclaim as being before the Local HousingAllowance regulations came into force.As aresult, their maximum Housing Benefit willdepend on what the Rent Officer decides.Theclaim will only change to LHA when they moveor if they stop claiming and then start again.

If your tenant has asked for their claim to bebackdated to a date that is after 7 April 2008,their LHA rate will be based on the LHA ratefor the month their claim starts in.This may bedifferent to the figures for the month theyactually claimed in.We will review the LHA rateon the anniversary of the date their claimactually started.

I always get my tenant’s HousingBenefit paid direct to me.Willthis change under the newregulations?

Yes. One of the changes under the new rules isthat Housing Benefit will almost always be paid

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to the person claiming. It will be theirresponsibility to make sure that they pay youthe right amount at the right time.We will giveour customers advice on how to open a bankaccount and provide details of some of theaccounts that are available.You may want toconsider the way in which you collect your rentnormally and look at changing to some kind ofautomated system (for example, standingorders) if you have not done so already.

There are very few times when we will payHousing Benefit to you.We will only do this ifwe think your tenant will have serious problemsin paying their rent and managing their ownfinancial affairs. If you think this may be the casewith one of your tenants, you should contactus.We will probably ask you to fill in a form.Wewill make a decision on every case individuallyaccording to our policy.We may need evidencefrom an independent person or organisation.You should tell your tenant to contact us or acitizens advice bureau for more information.

My tenant owes me rent. Doesthe benefit still have to be paiddirect to them?

You should speak to us if your tenant is at leasteight weeks behind with their rent. If this is thecase, we may be able to make the paymentsdirect to you.

How can I tell what the LHArate will be for my housesbefore my tenant claimsHousing Benefit?

You will need to find out the LHA rates for thebroad rental market area the houses are in.Wewill have this information in our offices and onour website.

However, the actual rate your tenant’s HousingBenefit will be based on will also depend on thesize of their household.The number of roomsthey need may not necessarily be the same asthe number of bedrooms there actually are inthe property.

Will my tenant’s Housing Benefitalways be the full LHA rate?

No, the way we work out Housing Benefit usingthe tenant’s income and savings is not changing.We will use the LHA rules to work out themaximum Housing Benefit they would be entitledto.They may only receive part of this amount,however, depending on the level of their incomeand savings. For more information on how wework this out, see the leaflets ‘Help with Rentand Council Tax for Pensioners’ or ‘Help withRent and Council Tax for People of WorkingAge’.

My tenant has told me the sizeof their household has changed.Will this affect the LHA rateused to work out their benefit?

Yes.This is a significant change and we will workout their Housing Benefit using the correct LHArate for the new size of their household.

We will also change the benefit when a memberof the household has a birthday that will affectthe LHA rate (for example, when a child turns16).

Either you or your tenant must tell us if anyonemoves in or out of the household.

I don’t agree with the LocalHousing Allowance rate that willapply to my house. Can I or mytenant appeal?

No, it is not possible to appeal against the LHArate.This is because the level is set for the wholeBRMA and any change would affect people whoare happy with the rate.

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Where can I get more advice?

You can also get more help from the following websites.

Independent advice

If you need independent advice, contact your local citizensadvice bureau.You can find their phone number (and the

numbers for other local advice agencies) in The Phone Bookand at your local library, or by contacting your local council.

Other formats

You can get the information in this booklet in large print, inBraille, as an audio version and in other languages.Visit ourwebsite www.benefit-leaflets.org for more information.

If you want more help or advice, please visit the Worcestershire Hub at Kidderminster Town Hall or phone 01562 732928.

www.dwp.gov.uk – Department for Work and Pensions

www.therentservice.gov.uk – The Rent Service

www.adviceguide.org.uk – Citizens Advice

www.wyreforestdc.gov.uk