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Changes from April 2011

From 1st April 2011 there were six changes to the way that claim for Housing Benefit have been calculated for private tenants under the rules for Local Housing Allowance (LHA):

  1. The maximum weekly LHA rates have been restricted
  2. LHA rates have been reduced to a calculation known as the 'thirtieth percentile'
  3. The maximum number of bedrooms allowed under the size criteria has been reduced from five to four
  4. An extra bedroom has been allowed for a non-resident overnight carer
  5. Excess payments of up to £15 per week have ended
  6. The circumstances under which payments can be made to a landlord were extended

All new claims received on or after 1st April 2011 have been subject to these changes from the start of entitlement.

Changes 1, 2 and 3 did not usually affect existing claims immediately because there was transitional protection that lasted for nine months after the first anniversary date of the claim following 1st April 2011. However, transitional protection ended if an existing customer changed address.

Please see the details below for a further explanation.

1. Maximum rates of LHA

The maximum weekly LHA rates are restricted to a maximum of:

  • £250 for a one-bedroom self-contained property
  • £290 for a two property
  • £340 for a three property
  • £400 for a four property

The weekly LHA rates throughout Adur and Worthing are below these levels so this change did not affect Housing Benefit claims in the Adur-Worthing area.

2. Thirtieth percentile calculation

From April 2008 (when LHA was introduced) to March 2011 inclusive, LHA rates were calculated by reference to the 'median' (or mid-point) of rents. In effect, this meant that the rent charged for 5 out of 10 properties was at or below the LHA rate.

Since April 2011, the LHA rates have been calculated by reference to the 'thirtieth percentile' of rents. In effect, this means that the rent charged for 3 out of 10 properties will be at or below the LHA rate and as a result the LHA rates (and therefore Housing Benefit awards) will be reduced.

3. Maximum number of bedrooms

Customers entitled to five or more bedrooms (in accordance with the size criteria rules) will only have the four-bedroom rate of LHA used in their benefit calculation.

4. Extra bedroom for a carer

Where a customer or their partner:

  • Needs overnight care that is provided by someone who does not normally live with them; and
  • As a result, they have an extra bedroom in their property for their carer; and
  • The carer regularly stays overnight

Then an additional bedroom will be allowed in the size criterion that's used to determine the rate of LHA that should be used in the Housing Benefit calculation. The additional bedroom does not apply where another family member (eg a child or elderly relative) requires the care - it must be the Benefit claimant or their partner who receives the care.

This rule is also subject to the maximum size property of four bedrooms that is allowed under the LHA provisions. If you or someone you know satisfies this rule, please contact the Revenues & Benefits Service immediately.

5. Excess payments

Prior to April 2011, if a customer's rent was less than the LHA rate that was used in their Housing Benefit calculation, the rent that was used in the Benefit calculation was their rent plus up to £15.00 per week. This was known as an 'excess payment'. Since April 2011, there have been no excess payments used in the Housing Benefit calculation for new or change of address claims, ie the rent used will be the lower of the contractual rent or the LHA rate.

Existing customers generally continued to have the excess payment included in their Benefit calculation until the anniversary date of their claim. Thereafter, the rent used in the calculation was the lower of the contractual rent or the new (anniversary) LHA rate and unlike points 1, 2 and 3 above, there was no transitional protection for a further nine months.

6. Landlord payments

In addition to the original circumstances, which are:

  • If the tenant is vulnerable in accordance with the safeguarding criteria; or
  • The tenant has at least 8 weeks' rent arrears; or
  • The landlord is receiving direct payments from the Department for Work & Pensions from the tenant's entitlement to an income-related Benefit; or
  • The tenant has vacated the property leaving rent arrears

Housing Benefit can also be paid to the landlord where making such payments will assist the customer in securing or retaining the tenancy.

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