Changes to Local Housing Allowance from April 2011

From 1st April 2011, the government is changing the way Housing Benefit is calculated. These changes will affect claimants who have their Housing Benefit assessed using Local Housing Allowance (LHA). These changes are:

• An end to the extra Housing Benefit (up to £15 per week)
• Limiting the maximum Local Housing Allowance to a four bedroom rate
• Reducing the Local Housing Allowance rates
• The introduction of upper limits (caps) on LHA
• New rules to help some people who have a non resident carer who has to stay overnight

An end to the extra Housing Benefit (up to £15 per week)

At present, some Housing Benefit claimants are entitled to a Local Housing Allowance Rate that is higher than their rent. This is known as a top up and can be up to £15 per week.

This top up is being abolished on 1st April 2011. After this time new claimants will not receive a top up. Existing claimants already receiving a top up will continue to receive it until their anniversary date or there is a change in the size criteria, which ever comes first.

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Limiting the Local Housing Allowance to the four bedroom rate.

At present, the highest rate of LHA we can use for a claim is the five room rate. From 1st April 2011, the LHA rates will be capped at the four room rate. The maximum anyone will receive is the four room rate. This means that no new customers can receive an LHA rate for more than four rooms.

These changes mean that existing claimants receiving a five room LHA rate will have their rate capped at four rooms. However, there will be transitional protection for some of these claimants.

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Reducing the Local Housing Allowance rates

Housing Benefit (LHA) is paid using LHA rates provided by the Valuation Office Agency. At present the LHA rates are worked out by taking the midpoint of a range of rents for each size of property in the area (the 50% mark). This means that about five out of every 10 properties are affordable. From 1 April 2011 this will be worked out using a reduced 30% mark which means that only three out of 10 properties in the area will be affordable to people receiving benefit.

Transitional protection will be available to some claimants who lose money as a result of the reduction in the LHA rate.

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The introduction of upper limits ("caps") on LHA

From 1st April 2011, the government is introducing caps on the amount of LHA that can be used to calculate a claim.

From April the following caps will be introduced:

These amounts will be the maximum any claimant can get.

Transitional protection will be available to some claimants who lose money as a result of these caps.  

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New rules to help some people who have a carer

At present, people who have a carer (who does not live with them permanently) do not get any extra rooms for the carer in terms of their LHA rate.

From April 2011 if a claimant or their partner rents a property with an extra bedroom for the carer, their Housing Benefit may take into account that extra cost subject to specify rules.

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Transitional Protection

Some claimants entitled to Housing Benefit (LHA) may be entitled to transitional protection for up to a maximum of 9 months. . However if at any time after 1 April 2011 there is a change that reduces the number of rooms the claimant is entitled to, there will be no protection and the new rate will become payable immediately