Changes to Local Housing Allowance from 1 April 2011
From the 1 April 2011 the government are making significant changes to the Local Housing Allowance (LHA) scheme.
The changes will be as follows:
An end to excess payments (up to £15)
Claimants will no longer be able to receive more Housing Benefit than their total rental liability
This means claimants whose rent is lower than their LHA will no longer receive an "excess payment" on top of their rent of up to £15.
Limiting the maximum LHA to a four bedroom rate
The 5 bedroom LHA rate will be removed, meaning that the maximum LHA rate will be for 4 bedrooms.
If you rent a property with more than 4 bedrooms, you will be limited to the rate for 4 bedrooms, even if due to household size you qualify for more rooms.
LHA weekly rates will be capped
The LHA weekly rates will be capped, so the rate in any area can not exceed:
- £250.00 for a one bedroom property
- £290.00 for a two bedroom property
- £340.00 for a three bedroom property
- £400.00 for a four bedroom property
LHA rates reduced
The way LHA is calculated will be changed so that it will be less generous for claimants.
Currently under LHA you should be able to afford to rent approximately 50 out of every 100 properties of a particular size in the local area.
But from April 2011 this calculation will be changed so that you can only afford to rent the cheapest 30 out of every 100 properties in the local area.
Help for disabled people who have a carer who needs to stay overnight
The Government intends to help disabled people who need overnight care, by allowing an extra room for a non resident carer.
To qualify for the extra room either the claimant or their partner must require overnight care.
We will automatically accept that overnight care is required where the person in need of care receives Attendance Allowance or Disability Living Allowance Care at middle or higher rate.
All other applicants would need to provide relevant evidence from a medical practitioner, a GP or other healthcare professional, or social services establishing that overnight care is required before the extra room could be awarded.
In all cases there must be a spare bedroom in the property for the carer to use, and we are still limited to paying based on a maximum LHA rate for 4 bedrooms.
When will the changes to LHA be applied?
These changes will apply to all new Housing Benefit claims made on or after the 1 April 2011 under LHA.
Additional Room for Carer
If you are entitled to an extra room due to receiving care from a non resident carer this can be applied to your claim from the 1 April 2011.
If your requirement for care starts after April 2011 you have one month to tell us about the change.
If you already receive overnight care then please let us know as you may be entitled to more Housing Benefit.
If you currently receive more Housing Benefit than your total rental liability (an excess payment), you will lose this extra payment when one of the following events occurs after April 2011:
- If there is a change in your household so that you are entitled to a different category of dwelling, for example somebody moves in or out.
- You change address.
- 12 months have passed since your LHA rate was set (you reach your Local Housing Allowance Anniversary date).
- There is a break in your claim.
Reduction in LHA rates, the removal of the 5 room rate, and maximum caps on LHA
If you do not have a change in circumstance after 1 April 2011 you will not be affected by these changes until you reach your LHA anniversary date. Your LHA anniversary date will be 12 months from when you claimed benefit or from when your LHA was last reviewed. Once you reach your LHA anniversary date, you will then receive a further additional 9 months transitional protection at your existing rate.
For example if you made a new claim on 5 September 2010, if your circumstances did not change your LHA rate would be reviewed a year later on the 5 of September 2011. From the 5 of September 2011, you would then receive a further nine months protection so your Local Housing Allowance would not alter until June 2012.
However if your circumstances change in the following ways you will be affected as follows:
- If you move address, the reduced LHA rates will apply from the date of the move.
- If the number of bedrooms which your household is entitled to decreases then the reduced rates will apply immediately and there will be no protection.
- If your claim ends and you reapply, meaning there is a break in entitlement the new claim will be subject to the new reduced LHA rates.
- If the number of bedrooms which your household is entitled to increases, and due to the changes in LHA this means you will be worse off, you will receive nine months protection at the existing LHA from the date of the change.
If you are worried about these changes and what they will mean for you, or have further questions please do not hesitate to call us on 0208 356 3399 for more advice.
Page updated: 28 Mar 2011