Changes affecting people who claim housing benefit under the Local Housing Allowance (LHA)

For new claims made on or after 1 April 2011

The government have:

• ended the maximum £15 weekly excess housing benefit top-up paid to people whose rent is less than the LHA rate for the size of accommodation they need.
• provided help for a disabled person towards the cost of an extra bedroom if they need an overnight carer. This means that if your family would normally be able to claim Housing Benefit for a two bedroom property but you need an overnight carer to stay in the property you will be able to claim for a three bedroom property.
• limited housing benefit for private tenants so that only the rents for the cheapest 30 per cent of local properties can be met in full by Housing Benefit rather than the cheapest 50 per cent that applies before April 2011. This means that the amount of benefit paid to new benefit claimants will be less than may have been previously awarded to tenants for the same property. The exact LHA rates will not be known until nearer the time. The Valuation Office Agency who set the LHA rates have published figures showing what effect this change would have on previous LHA rates. These can be viewed on the Valuation Office Agency website.
• introduced a limit (or cap) so that the maximum LHA will be:
  • £250 a week for a one bedroom property (including shared accommodation)
  • £290 a week for a two bedroom property
  • £340 a week for a three bedroom property
  • £400 a week for a four bedroom property

The maximum rate of LHA will be limited to the rate for a four bedroom property.

Existing claims - protection from the changes

If you are already claiming Housing Benefit before 1 April 2011 you will normally have more time before the changes to LHA affect you. This is called transitional protection.

Normally the new rules would apply from the first time the LHA rate used to assess the benefit claim is reviewed after April 2011. However, for existing customers a period of nine months transitional protection will apply after this date.

If, after 1 April 2011, you change address or have a change in your household that reduces your LHA bedroom entitlement, protection from the new rules stops.

The change that is not protected is the loss of the excess housing benefit of up to £15 weekly that some claimants get. If you received this before 1 April 2011, you will lose it at your anniversary date (the anniversary date is each year after the date you made your current claim or the date you had a change in your family size that altered your LHA rate). Housing Benefit cannot be higher than the rent you pay to your private landlord.

For example, if your LHA anniversary date is in June 2011 you will be protected from the changes due to the caps and changes to the LHA rates until March 2012. However, if you received £15 excess housing benefit you will lose it in June 2011.

Change from January 2012

Before 1 January 2012 the LHA shared room rate applied to people under the age of 25 living by themselves in accommodation that they rent from a private landlord. From January 2012 this has been extended to people aged under 35. This means that single people under 35 will no longer receive Housing Benefit based on one bedroom self-contained accommodation.

The changes are:

• Single claimants under age 35 making a new Housing Benefit claim on or after 1 January 2012 will be entitled to the shared accommodation rate rather than the one bedroom self-contained rate
• Existing claims at that date who are receiving transitional protection from the April 2011 LHA changes will move to the shared accommodation rate at the same time as their transitional protection ceases
• Existing claims not receiving transitional protection, (those whose claims are made on or after 1 April 2011 but before 1 January 2012) will move to the shared accommodation rate on the anniversary of their claim
• Pre LHA cases will move to the shared accommodation rate (previously known as the single room rent) on the annual review of their case

There are some cases where this restriction will not apply:

• If you have recently left care
• Receive severe disability premium in your benefit because you are entitled to the middle or higher rate of the care component of Disability Living Allowance
• Have an extra bedroom for a carer who provides you with overnight care you need but who doesn't normally live with you
• Have spent at least three months in a homeless hostel specialising in rehabilitating and resettling within the community. To benefit from this exemption you need to have been offered and accepted support services to enable you to rehabilitate or resettle in the community.

If you will be affected by any of these changes you could:

• Talk to your landlord about the changes and see if they will reduce the rent on your property.
• If you are about to renew your tenancy agreement you need to make sure the rent will be affordable after your protection runs out. The protection is there to give you more time to start looking for somewhere cheaper.
• If your landlord agrees to reduce the rent to a level that is at or near the lower LHA rate we could pay housing benefit directly to them.

Change from April 2012

From April 2012 Local Housing Allowance rates will 'freeze'. This means Local Housing Allowance rates will no longer be published each month. Instead any new claim, changes or your next LHA review will use the April 2012 rates. From April 2013 the Local Housing Allowance rates will be increased by the Consumer Price Index (CPI) and all claims will be recalculated each April. The Consumer Price Index measures the average changes in the prices of consumer goods and services in the UK from month to month. It is the main measure of inflation in the UK.