Quick Guide to Local Housing Allowance of Housing Benefit

Local Housing Allowance limits the maximum Housing Benefit you can receive in the private rented sector.
If you can rent a place cheaply though, you could pocket up to £15 per week of the saved Housing Benefit in cash.

Important Point
Local Housing Allowance is a new method of establishing the maximum level of Housing Benefit. It does not replace Housing Benefit, nor does it create a new form of Housing Benefit

Local Housing Allowance is a new way to work out maximum Housing Benefit entitlement.

  • It was introduced on Monday 7th April 2008
  • It applies to private rented sector only; not to council housing, housing associations or registered social landlords.
  • It is based on number of bedrooms needed (note – in pilot schemes, living rooms needed were calculated too)
  • It is not based on the actual rent being charged
  • It is paid to tenant, not directly to landlord (except in special circumstances, see below).

It will be applied to (for private rented sector):

  • All new Housing Benefit claims from 7th April 2008 onwards
  • Existing claimants who change address from 7th April 2008 onwards
  • Claimants who have a break in their claim of one week or more. E.g. through a break in signing on. That makes it important to fight for a backdate in those circumstances.

A change in rent level or lease terms will not cause you to switch to Local Housing Allowance – be sure to appeal if an Housing Benefit office ever attempts that.

Local Housing Allowance does not apply to council housing, housing associations, registered social landlords, homeless hostels.

Local Housing Allowance is a flat rate allowance calculated by the local authority Rent Registration Service using criteria of:

  • The number of bedrooms needed in claimants circumstances
  • Room rates for these within Broad Rental Market Area. For Glaswegians, all of Glasgow is treated as one area.

Number of bedrooms needed in claimants circumstances is calculated as one bedroom for every

  • Adult couple
  • Other adult aged 16 or over
  • Any two children of the same sex up to 16
  • Any two children regardless of sex under 10
  • Any other child

Note that there is no extra allowance for tenants with disabilities.

A one bedroom shared (bedsit) rate applies to single claimants under 25.
But you are exempted from that if you:

  • Qualify for severe disablement premium; or
  • Have a non dependent with you; or
  • Are under 22 and were formerly in care.

You are also subjected to the one bedroom shared (bedsit) rate if you happen to actually be living in a shared/bedsit flat and are single over 25 or are a couple. The same exemptions as above apply.

Local Housing Allowance rates are set monthly by Glasgow City Council (for Glasgow) and published on their website.

Their rates for June 2008 are:

Size Criteria - Weekly Room Rate
Shared Accommodation (bedsit) - £ 69.23
1 Bedroom - £ 92.31
2 Bedrooms - £118.85
3 Bedrooms - £135.00
4 Bedrooms - £200.00
5 Bedrooms - £230.77

Delays in applying Local Housing Allowance level

You can get full rent paid for first 13 weeks of Housing Benefit claim, if the rent could be met when you started renting, and if you have no Housing Benefit claim in previous 52 weeks.
And there is a 12 month delay in any adjustments to Local Housing Allowance levels after the death of a family/close relative who lived in the accommodation.

Reassessment of your Local Housing Allowance figure is carried out every 12 months.
An immediate reassessment (an instant Local Housing Allowance change) is carried out for a:

  • Change of dwelling
  • Change of number of rooms required (death excepted)

No reassessment is carried out for a rent increase.

Example – John and Mary have two children, Susan aged 15 and Claire aged 12.
The number of bedrooms needed is two. So they are assessed as entitled to £115.38 Local Housing Allowance
Susan turns 16 – they number of bedrooms needed is now three = £132.69 Local Housing Allowance.
That reassessment is meant to be carried out automatically by Housing Benefit office. But in practice they may need prompting.

Free Money

Local Housing Allowance figure need not be actual maximum rent for Housing Benefit purposes
Claimant will actually be entitled to the lower of:

  • Local Housing Allowance figure; or
  • Contractual rent plus £15.

Example: Bob rents a bedsit for £55 a week. His Local Housing Allowance figure is the bedsit rate of £66.92.
He is entitled to the lower of £55+£15 or £66.92 – which means he is entitled to £66.92 even though he isn’t paying that much to his landlord.

The difference – up to £15 – is kept by the claimant as extra money, and does not count for deductions from other benefits. Note that in the pilot schemes more than £15 could be kept by the tenant, but that has been cut for the real roll out.

On the other hand many tenants will find they loose out under the Local Housing Allowance rules and will be topping up their actual rent payments from out of their other benefits.

Safeguards

Local Housing Allowance Housing Benefit is paid to the tenant. The tenant then (supposedly) pays rent on to the landlord.

It can be paid to the landlord when:

  • The Local Authority considers the tenant is likely to have difficulty managing their affairs (so e.g. mental health, drug/alcohol, debt, gambling issues); or
  • The tenant has fallen 8 weeks into rent arrears; or
  • The tenant has a history of falling into arrears.

Refusal to pay direct to landlord is appealable.

Backdating

If Housing Benefit is backdated before 7th April 2008 it will be assessed under the old rules rather than Local Housing Allowance.
If Housing Benefit is backdated to after 7th April 2008, it will be based on Local Housing Allowance monthly rental figures from the month of the backdate.

Appeals

  • It is not possible to appeal against the level set in the published Local Housing Allowance monthly rental figures
  • You can appeal other decisions: e.g. number of bedrooms needed, whether there is a non dependent living there, claimants income, etc.
  • You have one month to lodge an appeal (12 months for late appeals with reasons for the lateness).

Glasgow City Council have set up a public enquiry line for Local Housing Allowance: 0141 287 3525.

Related Tips

1) Many people who do not receive full Housing Benefit because they are in receipt of a works pension, would get the full Housing Benefit if they could only qualify for the disabled or carers premiums. For the disabled premiums that requires applying for Disability Living Allowance. Note that Housing Benefit Carers Premium is paid even if Carers Allowance is not paid (because of means testing of it) – it is enough simply to show you have an underlying entitlement to Carers Premium, by filling out a Carers Allowance application form.

2) For all Housing Benefit claims, but perhaps especially relevant for Local Housing Allowance issues, the Local Authority can make extra payments to top up Housing Benefit through its Discretionary Housing Payments scheme. In Glasgow the form for that is available online.

 

Comments

Re: Quick Guide to Local Housing Allowance of Housing Benefit

By Anonymous

very useful - thanks!