Get clued up about radical new housing benefit changes

Local Housing Allowance (LHA) is the new name for Housing Benefit for tenants in privately rented accommodation, which will come into effect on the 7th April 2008.

Some of the reasons behind the changes are to simplify the rules, to be able to tell tenants in advance how much maximum benefit their household could receive, and to allow tenants on benefit more freedom to choose where they live.

LHA is a flat rate allowance based on the size of the household (their bedroom entitlement) and the area in which the person lives. There are no other changes to the entitlement rules, this will still be based on a person’s income / savings and proof of a valid tenancy. Payment will normally be to the tenant, who will then pay the landlord.

Prospective tenants on LHA will be able to shop around with their allowance. If they find a property they like with a rent that exceeds their LHA they will need, as they do now, to make up the difference themselves. But if they find somewhere with a rent below their allowance, they will be able to keep the difference up to a maximum of £15 a week.

Stuart Dennison, Head of Revenues and Benefits, said “Local Housing Allowance is being brought in for a number of reasons. Firstly it is fairer as the maximum amount paid to tenants is based on the size, composition and location of the household.

It allows tenants to take on greater responsibility, and paying rent directly to the tenant rather than the landlord empowers people to take greater responsibility for their financial affairs and helps develop the skills that they will need to help them move back into work.”

LHA will be used to work out Housing Benefit for all new claims received on or after 7th April 2008. LHA will also apply to claimants already on housing benefit if they move home after 7th April 2008 and claim benefit at the new address, or where an existing claim is broken for longer than a week.

This document was last updated on 2008-03-20 14:44:24 published by the Communications team. Document Reference:LBE_132582