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Local Housing Allowance explained

What is Local Housing Allowance? 

If you are a private tenant and you make a new claim for help with your rent, change address or have a break in your claim, we will work out your new Housing Benefit under the Local Housing Allowance (LHA) rules. 

Every April the Government sets a Local Housing Allowance figure based on: 

  • the area where you live
  • the number of bedrooms you need. 

The Local Housing Allowance figure determines the maximum amount of rent that can be used to calculate the amount of help we can give.

If you are charged more rent than the LHA figure, the part of your rent that is above the LHA amount will not be covered by the help you get from us.  

Does LHA apply to me? 

Local Housing Allowance will not apply to you if: 

  • you pay rent to the Council or to a registered social landlord
  • your Housing Benefit claim started before 7 April 2008 and you have continued to claim at the same address
  • you began your tenancy before 1989 or have a registered rent (the Valuation Office has set your rent)
  • you have a tenancy where a large part of the rent covers board and attendance (such as hotel accommodation)
  • you live in a caravan, mobile home, hostel or houseboat. 

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I have been on benefits since before April 2008. How can I move on to LHA? 

If you have a break of more than one week in your Housing Benefit claim, you will automatically move on to LHA.

So to move on to LHA you need to end your claim in writing and then make a new claim a week later. There must be a one-week break in your Housing Benefit claim.

If you are only part way through your tenancy agreement you should not sign a new one at a higher rent, as we may continue to pay you benefit using the rent on the original agreement until the original agreement ends.

How do you work out my LHA rate? 

The country is separated into broad rental market areas (BRMAs). A BRMA is made up of a number of local neighbourhoods and contains a mix of property types within a reasonable distance of local services. Hackney has three BRMAs. Each separate area has its own LHA rate. 

The Valuation Office determines the Local Housing Allowance rates for each Broad Rental Market Areas on an annual basis every April.

To calculate the LHA rate the Valuation office use data about rents charged within the Broad Market Rental Area. They will usually use letting data equivalent to 20% of all private lettings agreed in the Broad Market Rental Area during the previous 12 months.

LHA rates are based on the lower of:

  • The 30th percentile of local market rents (this means that 3 in 10 properties of each size should be affordable to people on Housing Benefit) or 
  • The previous years LHA rate increased by a fixed percentage.

From April 2014 most LHA rates increased by 1%, but some LHA rates received a 4% increase.

In Hackney this means:

  • All Shared Accommodation Rates increased by 4%.
  • The 1 bedroom rate in the Inner East London BRMA increased by 4%.
  • All other LHA rates in Hackney were restricted to a 1% increase.

For Hackney the weekly Broad Rental Market Area Rates from April 2014 are:

BRMA

Shared

1 bedroom

2 bedrooms

3 bedrooms

4 bedrooms

Inner East London

£98.16

£254.80

£299.34

£350.95

£412.89

Inner North London

£94.07

£258.06

£299.34

£350.95

£412.89

London Centre

£131.27

£258.06

£299.34

£350.95

£412.89

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How many rooms am I entitled to? 

The LHA rate is the maximum rent we can use when working out your Housing Benefit and it depends on the number of bedrooms you need.

Under LHA rules, we work out how many bedrooms you need. You need one bedroom for each of the following:

  • a couple
  • a person over 16
  • two children of the same sex aged under 16
  • two children of any sex who are younger than 10
  • a single child under 16 
  • one bedroom for an overnight carer if appropriate.

Extra rooms may also be allowed for the following:  

  • Armed forces personnel - Adult children who are in the Armed forces, but who continue to live with parents will be allowed a room, even when deployed abroad on long term operations. 
  • Disabled children - Disabled children who can not share due to severe disability, where the other sibling would have their sleep regularly disturbed if they had to share a room, will be allowed an extra room.  
  • Foster children - Approved foster carers will now be allowed a maximum of one extra room if they have foster children. Even if they don't currently have a child placed with them, they will be allowed a room where they have fostered a child in the last 12 months or become an approved foster carer in the last 12 months. 

Maximum number of bedrooms

The maximum number of rooms which a household can qualify for is limited to a maximum of four bedrooms.

If you rent a property with more than four bedrooms, you will be limited to the rate for four bedrooms, even if due to household size you should qualify for more rooms

Shared accommodation rate

You will come under a different LHA rate (called the shared rate) if you:

  • live in one room and share some facilities with other people (for example, a kitchen or bathroom)
  • are a joint tenant
  • are under 35 and live alone. 

Examples

Sarah, 22, lives alone in a two-bedroom flat. Because she is a single person and under 35, she will be limited to the shared rate of LHA.

Sarah then has a daughter but stays in the same property. She becomes eligible for the two-room rate of LHA from the date her daughter is born.

Her friend Karen lives in a three-bedroom house. She has a boy aged 9 and a girl aged 7. She is entitled to the two-room rate of LHA as children under 10 are expected to share a room.

When her son turns 10, Karen becomes entitled to the three bedroom rate as her children are no longer expected to share a room.

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 four bedrooms.

What if I suffer a bereavement?

If you are in receipt of Housing Benefit and someone who lives with you has died, the number of rooms you are entitled to will remain unchanged for a period of 12 months after their death.

If you were not previously receiving Housing Benefit, and someone who lives with you has died in the last 12 months, then we will pay your full eligible rent for 12 months from the date of death.

What if I have just lost my job and could previously afford my rent?

Where the LHA rate is less than your eligible rent, providing you or your household could afford to pay the rent when you entered the into rental agreement, your Housing Benefit will be calculated using the full eligible rent for the first 13 weeks of your claim. This 13 weeks protection does not apply if you have received Housing Benefit in the previous 52 weeks.

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What if my rent is lower than the LHA rate? 

You cannot be paid more in Housing Benefit than your total rent charge. If your rent charged is lower than the LHA rate, then we will calculate your Housing Benefit on the rent charged. 

When will my LHA rate change? 

Local Housing Allowance rates are set for 12 months and change on 1 April each year. This means, irrespective of which month you make your claim in, the Local Housing Allowance figure used will be the annual figure set in the April.

Local Housing Allowance rates are updated annually on the 1st April for all claimants regardless of when a person made their claim.

The new rates are usually available from the middle of March and can be obtained from our reception, or by contacting our call centre on 020 8356 3399.

Once applied the LHA rate will remain unchanged until the following April, unless if there is a change in the number of bedrooms you need. 

If the number of bedroom you need changes as someone has moved into or left your household, one of your children turns 10 or 16, the LHA rate will alter from the Monday after the change.

If you claim Housing Benefit and your claim is backdated, the previous years LHA rate will apply to any period prior to April, and the current LHA rate will apply for any period after 1 April. 

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What if my rent increases? 

We can review the LHA rate when there is been a mid year increase or decrease in rent.

This will mean if your rent is below the LHA rate and increases, we will be able to immediately review your LHA claim.

This will only apply where the rent changes after April 2013 and is below the LHA rate.  You must always tell us of a rent increase within one month of when it happens.

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How will you pay my Housing Benefit? 

We pay Housing Benefit direct into your bank account. If you do not have a bank account, contact your local bank about opening one. Find out about the different types of accounts which are available and how to open a basic account on our banking information pack page.

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Can you pay LHA direct to my landlord? 

Under LHA rules, we will almost always pay the benefit direct to you. We cannot make payments direct to your landlord just because you would prefer this.

However, in very exceptional cases we may consider paying your landlord. We will only do this if we believe that paying LHA to you direct will cause you serious problems, or if we believe it is in your best interest to pay your landlord.

Paying your landlord could be appropriate in certain situations, for example if you have serious debt problems, an addiction to drugs, alcohol or gambling, or a medical condition which makes managing money difficult. It may also be appropriate if you have had problems with paying your rent in the past.

If you think you might find it difficult to receive LHA direct, please contact us for advice. You will need to fill in a form explaining the reasons why.

We may also need to see evidence from an independent person or organisation such as a GP, Social Services, or a welfare group.

You can get a friend, family member or support worker to help you fill in the form, or you can contact Citizen's Advice or other support organisations for more information and help.

We will pay your landlord direct if you owe them more than eight weeks' rent. You will need to provide evidence from your landlord, for example a rent statement showing that you owe more than eight weeks' rent. As soon as you have less than eight weeks of unpaid rent, we will start paying LHA to you again.

If you or your landlord disagrees with our decision about who should receive the payment, you both have the right to ask us to look at the decision again.

You should ask within one month of our decision. If you are still unhappy, you have the right to appeal. You can do this by contacting us in writing within one month of our decision.

If we decide to make payments direct to your landlord, we will usually check the situation from time to time so that we are sure the decision is still correct.

For more information about when we will consider making payments direct to your landlord read our Local Housing Allowance safeguard policy (Word).

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Can I appeal against the amount of LHA I am being paid? 

If you disagree with our decision, you must write to us within one month of the decision and tell us why. Once we reply, and if you still disagree, you can ask that we send the decision to an independent tribunal to consider. Or, you may appeal direct to an independent tribunal.

Unfortunately there is no right of appeal against the LHA figure we use to work out your LHA rate as these are set by the Valuation Office. However, if your Housing Benefit is not enough to cover your rent, you could apply for a Discretionary Housing Payment to help you meet the extra rent costs (although whether you are entitled to this depends on your circumstances).

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Page updated: 11 Apr 2014