Housing Benefit - Local Housing Allowance

On Monday 7 April 2008 the new Local Housing Allowance was introduced throughout Britain.
 
Local Housing Allowance is a new way of working out, and paying, Housing Benefit for tenants of private landlords.

Local Housing Allowance only affects tenants of private landlords from 7 April 2008 and only 

• if they change address and take on a new tenancy on or after 7 April 2008
• or if they make a new claim for Housing Benefit on or after 7 April 2008
• or if they have a break in their existing claim

Local Housing Allowance does not affect council tenants or tenants of social landlords, such as Bield Housing Association, Almond Housing Association or Weslo Housing Management, or tenants of charities like the Abbeyfield Society.

 

The Local Housing Allowance Rates are available at the bottom of this page along with a range of other supporting documents.  e.g. Safeguard Arrangements, Landlords Guide.

What are the changes?

There are two main changes to the Housing Benefit scheme under the new Local Housing Allowance.

Firstly, the way the maximum rent is calculated changes.

• The Rent Officer, an official who is independent of the council, will still set the maximum amount of rent we can pay benefit on.
• The Rent Officer will no longer look at every individual property and the actual rent that is charged by the landlord in each case.  
• Instead the Rent Officer will set a Local Housing Allowance Rate for each size of property in our area (one bedroom; two-bedroom, three-bedroom etc.) and these will be published every month on this website (see below).

Secondly, the way Housing Benefit is paid changes.

In almost all cases payment of Housing Benefit will be made to the tenant directly into their bank accounts.  The tenant will have the responsibility to pay their rent to the landlord.

How will the Local Housing Allowance operate?  

Under the Local Housing Allowance, the maximum amount of benefit someone is entitled to is not based on the individual property in which the tenant lives. It is based on:

• which area the property is in (the Broad Rental Market Area)
  and
• who lives in the property with the tenant (the Size Criteria)

The Rent Officer will decide what the Local Housing Allowance Rate will be for different sizes of properties within each Broad Rental Market Area.

The council will then use the appropriate Local Housing Allowance Rate as the starting point for the Housing Benefit calculation.In some cases, other things will affect the actual amount of benefit someone receives. These can include:

• how much the rent is
• whether anyone living with the tenant is expected to contribute to their rent

There is no change to the other entitlement rules for Housing Benefit. These will still be based on a person's income, savings and proof of rent etc.

How do I find out what the Local Housing Allowance Rate for my property will be?

Each month the Rent Officer will supply councils with the Local Housing Allowance rates for various sizes of property in each of the Broad Rental Market Areas.
 
We will publish the Local Housing Allowance rates on this website every month. 

Please note that the Local Housing Allowance rate is only the starting point for the calculation of a tenant's benefit entitlement - it is not necessarily the actual amount a tenant will receive as this will be influenced by other factors such as the tenant's income and savings and the actual rent being charged.
 
There are three Broad Rental Market areas in West Lothian, split by postcode.

• EH postcodes (this covers the majority of West Lothian properties)
• ML postcodes
• FK postcodes

For each of these Broad Rental Market Areas, the Rent Officer will supply the council with a Local Housing Allowance rate for each of the following size of properties:

• Single room with shared facilities 
• 1 bedroom property
• 2 bedroom property
• 3 bedroom property
• 4 bedroom property
• 5 bedroom property

The Rent Officer will supply a Local Housing Allowance rate for larger properties on an individual basis.

The link in downloadable documents at the bottom of this page gives the weekly and the calendar monthly (pcm) Local Housing Allowance Rates.

The Local Housing Allowance rate used for the calculation of a tenant s housing benefit will be determined by the number of bedrooms required by that tenant's household.
 
Under the Local Housing Allowance a tenant is entitled to the following number of bedrooms:

• 1 bedroom for a single claimant or adult couple
• 1 bedroom for any other adult aged 16 or over
• 1 bedroom for any two children of the same sex aged 15 or under
• 1 bedroom for any two children under 10 regardless of sex
• 1 bedroom for any other child

For example: 

• Mrs Smith is a widow living in a house with her two daughters aged 17 and 14. The three-bedroom rate will be used to work out her housing benefit entitlement.  This will be the case even if she lives in a two-bedroom property.
• Mr and Mrs Jones live in a flat with their 4- year old twins (a boy and a girl). The two- bedroom rate will be used to work out their housing benefit entitlement.  This will be the case even if they rent a three-bedroom property.
  
• The maximum rent for most people aged under 25 who live alone will be the single room with shared facilities rate.

What if the tenant's Local Housing Allowance is higher than their rent?
The tenant can keep up to £15 per week where the Local Housing Allowance is higher than the rent charged.  This excess will not normally be taken into account as income when working out other benefits. 

What if the tenant's Local Housing Allowance is lower than their rent?
As in the current situation, the tenant will have to make up any shortfall out of their other income.
 
Why is Local Housing Allowance being introduced?
Local Housing Allowance is part of the Government's welfare reform agenda.  It represents a major change to the Housing Benefit scheme for tenants of private landlords.  The Government's stated aims in introducing this change are grouped around six main objectives: 

Encouraging Personal Responsibility, The Government believes that, wherever possible, Local Housing Allowance should be paid to tenants. Empowering people to budget for and pay their rent themselves, rather than councils paying it over their heads direct to the landlord, will help unemployed tenants to develop the skills they will need as they move into work.

Financial inclusion, By encouraging and assisting tenants to open bank accounts, receive payments of Local Housing Allowance into those accounts (as most salaries are paid), and set up standing orders to pay their rent, Local Housing Allowance claimants will be more like in-work tenants.

Fairness, The maximum rent will be based on the size and composition of the household, not the amount of rent charged.  Therefore households in similar circumstances in the same broad area will be entitled to similar amounts of benefit.

Choice, The idea here is that, because Local Housing Allowance is not strictly related to the actual rent, tenants can choose how to spend this income. Like other tenants, they will be able to choose whether to rent a larger higher quality property or to spend less on their housing and increase their available income (though there are limits to this).

Transparency, Under the existing Housing Benefit scheme for tenants in the private sector, it is sometimes difficult for claimants to know the extent to which Housing Benefit will meet the costs of the property they are considering renting.  There is a system of Pre-tenancy Determinations that can help, but these have to be completed in advance for each individual property.  Under Local Housing Allowance the amounts that the Rent Officer has set as the maximum rent for each category of property in the area will be published each month. Thus tenants will know in advance of taking on a tenancy how much support is available towards their housing costs in different areas and for different property sizes.

Improved administration and reduced barriers to work, The fact that local authorities will no longer be required to refer individual cases to the rent officer will, the Government believes, assist in speeding up the assessment of these claims. For working age claimants, Local Housing Allowance should provide greater certainty about what help is available in and out of work. A more transparent system may also improve the ability of individuals to move between areas and to take advantage of employment opportunities.