Local Housing Allowance

On 7 April 2008 a new way of calculating Housing Benefit for people on low incomes who rent their homes from a private landlord was introduced. The new scheme is called Local Housing Allowance (LHA) and is no longer based on the property that you are renting.

It is based on:

• who lives with you
• the area where the property you are renting is located (broad rental market area)
• how much money you have coming in
• what savings you have

As a tenant you will not be affected if you:

• are already receiving Housing Benefit
• rent from a housing association or a charitable or voluntary organisation
• rent from the local authority (council tenant)
• have a tenancy which started before 1989
• live in a caravan, houseboat, mobile home or hostel
• live in accommodation where a substantial part of the rent is for board and lodge (eg bed and breakfast accommodation)

You will be affected if you live in private accommodation and you:

• make a new claim for Housing Benefit which starts on or after 7 April 2008
• currently receive Housing Benefit but change address (to other private accommodation on or after 7 April 2008)
• currently receive Housing Benefit but have a break in entitlement of at least one week

What’s the difference between the existing Housing Benefit scheme and Local Housing Allowance?

The existing Housing Benefit scheme is based on the rent that you actually pay, or what the rent officer decides is a fair rent for the property you are living in.

Under the new Local Housing Allowance scheme:

• you can find out the maximum Local Housing Allowance you could be entitled to before you rent a property
• Local Housing Allowance is a simpler system, there is no longer a need for complex rent restrictions and individual referrals to the Rent Service, which will help speed up the administration of Housing Benefit payments
• Local Housing Allowance payments will normally be paid direct to the tenant, the easiest way for you to receive your Local Housing Allowance is straight into a bank account. Under the Local Housing Allowance scheme there is no longer the option for claimants to request payments direct to their landlord, except in certain circumstances

The circumstances are:

• where the claimant is considered vulnerable and it is in the best interests of the tenant to pay Housing Benefit direct to the landlord. (Plymouth City Council has developed a safeguard policy for assessing vulnerability claims which is available to download from the documents table below)
• where the claimant is eight weeks or more in arrears with their rent, unless we consider it in the tenant's best interest not to pay the landlord direct

How will Local Housing Allowance work?

You can work out the maximum amount of Local Housing Allowance you could receive by calculating how many bedrooms you are entitled to and checking the rates guide page for that number of bedrooms for the month you are making your claim for Housing Benefit.

You are allowed one bedroom for:

• every adult couple
• every adult aged 16 or over
• any two children of the same sex under the age of 16
• any two children under the age of 10
• any other child

There is also a shared room rate which applies to most tenants aged under 25 and certain tenants over 25 that do not have exclusive use of the accommodation they rent.

If your rent is less than the Local Housing Allowance amount, you get to keep the difference (this is capped at £15 per week above your rent).

This is an example of where there may be excess Local Housing Allowance:

Couple with 3 children (boy aged 16, girl aged 11, boy aged 9) and elderly mother living with the family.

Local Housing Allowance entitlement:

• Gross rent - £240 per week
• Max eligible rent/Local Housing Allowance - £248.77 per week (for 5 rooms)

In this example, the tenant would be entitled to keep the excess Local Housing Allowance of £8.77 per week.

Please note the Local Housing Allowance figure shown above for a 5 bedroom rate is an example only, and is not a true figure.

We will publish the actual Local Housing Allowance rates for Plymouth every month on this website and also in our offices and other outside agencies such as at the Citizens' Advice Bureau and Job Centres.

For more information on Local Housing Allowance please visit our frequently asked questions page.

[Back to top]