What is Housing Benefit?
Housing Benefit is the help given to people who have low savings and low income to pay their rent. We may not always cover all of the rent with Housing Benefit. We will work out a maximum amount of Housing Benefit we are able to award. The amount of benefit your tenant may get will also depend on their income and savings.
What is Local Housing Allowance (LHA)?
Local Housing Allowance (LHA) is the way of working out the maximum Housing Benefit your tenant could get.
LHA rates are set by the Valuation Office Agency (formerly known as the Rent Service).
Who does LHA apply to?
LHA applies to new claims for Housing Benefit, for people in private tenancies. It does not apply to tenants of a housing association, tenants in caravans or mobile homes, or if meals are included as part of the tenancy.
How does LHA work?
The maximum amount of Housing Benefit your tenant could get is set in advance by the Valuation Office Agency. It does not depend on the amount of rent you charge. The maximum amount your tenant could get is the same for every same size household in the area in which they live, regardless of differences in actual rent.
Broad Rental Market Areas (BRMA)
The Valuation Office Agency has divided the country into Broad Rental Market Areas (BRMA). These are made up of a number of neighbourhoods. In this area there will be a wide mix of property types within a reasonable distance of various public amenities such as health, education, recreation, personal banking and shopping.
From the information that is collected the figure that is at the mid-point of these rents is the figure that is used as the LHA rate. This does not take into account any rents from this area that are unusually high or low. Darlington currently has one BRMA.
The Valuation Office Agency continually monitors the local rent market and updates the LHA rates each month. They may go up or down or stay the same. This does not mean that the LHA rate applied to a tenants claim will change monthly. A rate is applied for the month in which they claim and will be reviewed annually.
The LHA rates
What LHA rate will apply to my tenant?
We will decide how many rooms, according to the Housing Benefit rules, your tenant needs. This may be different to the actual number of rooms in the property. If they live in one room and share some facilities with other people, for example a kitchen or bathroom, there is a special LHA rate, called the ‘shared room rate’. If they are under 25 and live on their own they will also get this rate. If the above does not apply to them, this is how the number of rooms will be worked out. One bedroom for each of the following:
- A couple
- A single person who is 16 or over
- Two children of the same sex (under 16)
- Two children both less than 10
- A child (under 16)
Example:
Susan is a single mother who has three children, Tom, who is 14, Judy, who is 11 and Raymond, who is 6. Susan is entitled to one bedroom for herself, one bedroom for Judy and one bedroom for Tom and Raymond to share. This means any benefit they are entitled to will be based on the Local Housing Allowance rate for three bedrooms.
What if the LHA rate changes before my tenant’s claim is worked out?
The LHA rate that will be used to work out your tenant’s maximum Housing Benefit will depend on the date of their claim. This is normally the date that we receive the claim form or the date that they first asked to claim Housing Benefit, if they send the claim form back within one month of this date. It does not matter if the date their Housing Benefit is put into payment is in the next month, their benefit will still be based on the rate that applied when they claimed.
What if the rent is higher than the LHA rate?
The maximum benefit your tenant could get is the LHA rate for their household size, for the month in which they claim. If their rent is more than this figure, it is up to the tenant to make up any shortfall. If you think they are having difficulties, please advise them to contact us.
What if the rent is lower than the LHA rate?
If your tenant’s rent is lower than the current LHA rate, then the maximum Housing Benefit they could get is their rent plus up to £15 pounds a week. This is the amount the Government has decided to cap LHA at. If the LHA rate is more than £15 a week above their rent, they would only get £15 a week on top of their rent. They do not have to give this excess money to you, unless they are in arrears.
Example:
Rent = £90 week
LHA = £120 week
Maximum Housing Benefit = £105 week
Example:
Rent = £90 week
LHA = £100 week
Maximum Housing Benefit = £100 week
If I decide to increase the rent, will my tenant’s Housing Benefit also increase?
No, your tenant’s LHA rate will be reviewed every year using the date of your tenant’s claim. The LHA rate will then be changed to the LHA rate for the household size that applies that month. It will only be reviewed at any other time if there are significant changes to the household, for example a child turns 16 or somebody moves in.
My tenant has asked for their claim to be backdated, which LHA rate will apply?
If your tenant has requested backdating, their Housing Benefit will be based on the LHA rate for the month in which their claim is backdated to. This may be different to the LHA rate for the month in which they actually claimed. The LHA rate will be reviewed on the anniversary of the date their claim actually started.
Will I get my tenant’s Housing Benefit paid directly to me?
Under the LHA rules, Housing Benefit will almost always be paid to the tenant. It will then be their responsibility to make sure that they pay you the right amount of rent at the right time, just as if they were not receiving any benefit. We will give advice to customers on how to open a bank account and will provide details of some of the accounts that are available. We will also remind them of the importance of paying their rent to you on time. You may want to consider the way in which you collect your rent normally and look at changing to some kind of automated system, for example by standing order, if you have not already done so.
What if my tenant has difficulty in paying their rent or managing their financial affairs?
We will only pay Housing Benefit directly to you, if we consider that your tenant will have serious problems in paying their rent or managing their own financial affairs.
If you think this may be the case with one of your tenants, you should contact us straight away. You will need to provide us with details of why you think your tenant will have serious problems in paying their rent.
We will make a decision on every case individually, by applying our safeguarding policy [pdf document].
Evidence may be required and this should not be from you, but an independent person or organisation. You should advise your tenant to contact us or the Citizens Advice Bureau for more information.
What if my tenant is in arrears of 8 weeks or more?
You should contact us if your tenant is in arrears of 8 weeks or more. Housing Benefit payments will then be made direct to you. We count rent being in arrears if it has not been paid by the date it is due, even if the rent is charged in advance.
How can I tell what the LHA rate will be for my property, before my tenant claims Housing Benefit?
The LHA rates will be available on our website or through the Customer Contact Centre. However, the actual rate your tenant’s Housing Benefit will be based on will also depend on the size of their household and the date they make their claim. The number of rooms they need may not necessarily be the same as the number of bedrooms in your property.
Will my tenant’s Housing Benefit always be the full LHA rate?
No, Housing Benefit is also calculated based on the tenant’s circumstances, such as their income and savings. The LHA rules will be used to work out the maximum Housing Benefit they are entitled to. They may not get all of this amount however, depending on the level of their income and savings.
My tenant has informed me the size of their household has changed; will this affect the LHA rate used in their benefit calculation?
A change in the size of your tenant’s household could result in a new LHA rate being used to work out their Housing Benefit. Their benefit could also change if a member of their household has a birthday that will affect the LHA rate, for example a child turning 16.
However, not all changes to their household will result in a new LHA rate being applied and in some cases their Housing Benefit could stay the same, or go down.
You must tell us straight away if you become aware of anyone moving in or out of their household.
I don’t agree with the LHA rate that will apply to my property; can I appeal?
No, it is not possible to appeal against the LHA rate. This is because the rate is set for the whole BRMA and any appeal would affect other people claiming Housing Benefit.
In most cases, your tenant can appeal about any other decision we make about their Housing Benefit claim.
How can I find out if my tenant has made a claim for Housing Benefit?
We can only talk to you about your tenant’s Housing Benefit claim if they have given us their permission to do so. The claim form contains a page which they can complete and sign, giving us their written consent.
We will not be able to give you any information without their consent. However, we may act on any information you pass on to us about your tenant, for example if they are in arrears with their rent.
What should I advise my tenant to do if they want to claim Housing Benefit?
Your tenant should contact us straight away if they want to make a claim for Housing Benefit, as their claim will generally only be paid from the date we receive it.
They will need to complete a claim form, which they can also get by contacting us. In most cases we will also need evidence to support their claim. This needs to be original documents, as we do not accept photocopies. Each claim if different, but in most cases we need to see the following (this applies to both the tenant and their partner, if they have one):
- Proof of their identity and National Insurance Number
- Proof of all their income
- Proof of all their savings, if the total amount is over £6,000
- Proof of their tenancy
You may be able to help us by providing the tenancy agreement, or confirmation of their rent in writing. We may be able to accept a copy of their tenancy agreement if you send this to us by e-mail, or if you sign and date a photocopy.
Where can I get more information or advice?
- E-mail us at HBEnquiries@darlington.gov.uk
- Telephone Customer Services on 01325 388514
- Write to us at Housing Benefits Section, Town Hall, Darlington DL1 5QT
- Visit us in person at the Customer Contact Centre