Breadcrumb Trail
Local Housing Allowance for Landlords
What is LHA?
Local Housing Allowance (LHA) is a way of working out Housing Benefit for tenants who rent thier property from a private landlord.
LHA is for people on a low income who rent from private landlords and is based on the number of rooms people are allowed - not how much the rent is. The number of bedrooms your tenant(s) are allowed depends on who lives with them.
In summary:
- LHA affects new claims, breaks in claim and change of addresses from 7 April 2008
- It applies to most private sector accommodation with some exceptions
- The Rent Officer will no longer value individual properties - This means there will be no more rent restrictions!
The rent figure we use for the Housing Benefit calculation will be based on:
- The area your tenant lives in - Known as the Broad Rental Market Area; and
- Who lives with them - Known as the Size criteria
- If your tenant secures a rent below the LHA they can keep the difference up to a maximum of £15
- In most cases LHA will be directly to tenants
- Safeguards will be in place to protect you from tenants who are vulnerable and unlikely to pay.
When was LHA introduced?
Local Housing Allowance was rolled out nationally on 7 April 2008. LHA will affect all new claims for Housing Benefit from this date unless the tenancy is exempt - see below.
Will my tenant(s) be affected by LHA?
You and your tenant will be affected by LHA if you entered in to a deregulated tenancy after 1989 (unless your tenancy falls into one of the existing categories below). However, existing tenants will only move onto LHA if they have a break in their claim or they change address.
LHA does not affect:
- A tenancy which started before 1989
- Housing Association tenancies
- Some protected cases, such as supported housing provided by certain, social landlords or charities;
- Caravans, houseboats and hostels
- Tenancies where there is a substantial amount of board provided e.g. B&Bs
If your tenancy falls into one of these categories your tenant's Housing Benefit will be calculated under the existing rules.
Why is LHA being introduced?
The objectives of LHA are to promote:
- Fairness: LHA has been designed to pay the same amount to tenants with similar circumstances living in the same area. This differs from the current Housing benefit scheme, which ties the level of benefit to the rent actually charged for a property.
- Choice: Tenants are able to take greater responsibility and choose how to spend their income in a similar way to tenants who are not in receipt of benefits. Tenants can choose whether to rent a larger property or spend less on rent and increase their income.
- Transparency: The current link between Housing Benefit and individual rents is complex and does not set out clearly what level of support is available for people on low incomes. With LHA tenants (and landlords) can find out in advance exactly how much benefit can be paid towards housing costs in different areas and for different size properties.
- Personal responsibility: Empowering people to budget for and to pay their rent themselves, rather than having it paid for them, helps develop the skills unemployed tenants will need as they move back into work.
- Financial inclusion: Ideally, tenants will set up a bank account and have their benefit paid by BACS. They can then set up a standing order to pay the rent to you. This has the advantage of being a safe and secure method of payment and provides certainty for all landlords that rent will be paid.
- Reduced barriers to work: Greater certainty about what in-work benefits tenants could receive is expected to encourage customers to take the step from welfare into work.
- Improved administration: There will no longer be a need for the complex rent restrictions and individual referral of rents to rent officers that currently contribute to the delay in processing claims by private tenants. The LHA scheme is simpler for local authorities to operate and for tenants to understand.
How will LHA affect me?
The main change is that most Housing Benefit payments will be made directly to your tenant. This means they will be responsible for paying the rent to you. However, landlords will not be asked to repay overpayments where the tenant receives Housing Benefit payments.
It's important that your tenant has a bank account for their LHA to be paid into. They can then set up a standing order to ensure you receive your rent regularly. If your tenant cannot open a current account they may be able to open a basic bank account.
Will all payments be made to tenants?
No. We appreciate there will be occasions when it is more appropriate to make the payment direct to the landlord and safeguards have been put in place to ensure this happens. Payments will be made to you:
- If your tenant is vulnerable and unable to 'manage their affairs'
- If your tenant is unlikely to pay their rent
- If your tenant is in arrears by 8 weeks or more
- If your tenant is having deductions made from Income Support or Jobseeker's Allowance to pay off rent arrears
- If we need to issue a large one off payment on a new claim
In all cases, except for issuing one off payments (above), we will need to see evidence of these circumstances.
What do you mean by a vulnerable tenant?
The Department of Work and Pensions (DWP) define a vulnerable person as someone who is unable to manage their own affairs. Some examples include:
- Learning difficulties
- medical conditions
- illiteracy
- drug/alcohol/gambling dependencies
- people leaving prison
- care leavers
- fleeing domestic violence
We will work with tenants, landlords and welfare/voluntary groups to:
- Identify vulnerable tenants
- Seek written representation from approved sources
- Seek evidence of vulnerability from accepted sources
- Pay landlord's directly where vulnerability is proven
We make a decision on vulnerability on a case by case basis.
What do you mean by 'unlikely to pay their rent'?
Some examples include:
- Previous history of rent arrears
- History of fraud
- On remand
- Severe debt problems/recent County Court Judgements
- Undischarged bankruptcy
- An inability to obtain a bank account
In all cases we will:
- Identify and investigate unlikely payers
- Seek evidence of arrears and reasons why the tenant is unlikely to pay
- Make a decision to whom payment should be made
- Provide direct payment advice for the tenant
- Where payment is made to the landlord, review the decision within an appropriate time scale
How do I apply for direct payments of LHA?
LHA is normally paid to tenants, but landlords can apply for direct payments in the following circumstances. If you apply for direct payments, we will consider the evidence you have provided and notify you of our decision. If we need any more information to help us make a decision we will write to you.
-
Your tenant is 8 weeks or more in arrears with their rent
If your tenant is 8 weeks or more in arrears with their rent, you can apply for direct payments of LHA. Just fill in a direct payments (8 weeks in arrears) form and send it to us with proof that your tenant is behind with their rent. For example a copy of a rent book or account will do.
Even if your tenant is not 8 weeks or more in arrears with their rent, you should still let us know if they have missed a payment. We may be able to help. You can phone us on 0161 912 2220 or email benefits@trafford.gov.uk
-
Your tenant is unlikely to pay their rent or is unable to manage their money
If your tenant is unlikely to pay their rent or is unable to manage their money you can apply for direct payments of LHA. Just download and complete our Direct Payments Application Form and send it to us with any proof you can find.
-
Your tenant does not have a bank account
We can normally help your tenant to open a bank account, so direct payments are not usually necessary. However, if we have seen your tenant and cannot help them, we will consider paying you, the landlord, directly.
If your tenant does not have a bank account they should phone us on 0161 912 3302 to make an appointment. Alternatively, you can read more about opening basic bank accounts in Trafford.
For more information on direct payments please download a copy of our safeguards policy.
How are the LHA rates worked out?
The amount of LHA that a tenant may receive depends on:
- The area they live in - Known as the Broad Rental Market Area; and
- Who lives with them - Known as the Size criteria
Read our Guide to working out your rate of Local Housing Allowance
Who to contact
Trafford Council
Benefits Section
PO Box 65
Sale
M33 6BY
Email: benefits@trafford.gov.uk
Telephone: 0161 912 2220
This page was last reviewed on 8 April 2010
Page content ends
