A-Z of Services

Local Housing Allowance – Existing Claimants

What is Local Housing Allowance?

Local Housing Allowance was introduced from 7 April 2008 and is a new way of working out Housing Benefit for tenants who rent from private landlords.

Previously a private tenant’s Housing Benefit was subject to a restricted rent determination by the Rent Officer Service, under the Local Housing Allowance scheme your Housing Benefit will be based on the people living in your household and the number of bedrooms they require.

Why has Local Housing Allowance been introduced?

The old Housing Benefit scheme for private tenants whereby the Council would seek a restricted rent determination before awarding Housing Benefit has long been viewed to be overly complicated, as acting as a barrier to people finding work and taking responsibility for their own finances.

What are the objectives of the Local Housing Allowance Scheme?

The main aims of the scheme are to promote:

Fairness: Under LHA the maximum amount paid to tenants would be based on the size, composition and location of the household, in other words two households in similar circumstances in the same area would be entitled to the same amount of HB.
Choice: LHA encourages tenants to take on greater responsibility and choose how to spend their income in a similar way to other tenants who are not in receipt of benefits.
Transparency: The current link between HB and individual rent is complex. It does not state clearly what level of support is available for people on low incomes. A clear and transparent set of allowance rates will enable tenants and landlords to know the maximum HB is available from the state.
Personal responsibility: The Government believes that, where possible, LHA should be paid to tenants, alike most other benefits and tax credits, empowering people to budget and pay their rent themselves. This will develop skills unemployed tenants need to move back to work.
Financial inclusion: Ideally, we want people to have their HB paid into a bank account and to set up a standing order to pay the rent to their landlord.
Improved administration and reduced barriers to work: A simpler system will speed up the administration of housing benefits. A transparent system will encourage people to move area to seek employment opportunities.

Will I be affected by Local Housing Allowance?

Local Housing Allowance will only affect you in the following circumstances:

When you make a new claim
If you change address, or
If you have a break in your claim of at least one week or more.

Will Local Housing Allowance affect all private tenants?

The simple answer is no. The following groups are excluded from the scheme:

Tenancies that began before 15 January 1989
Housing Association tenants
People living in supported housing provided by local authorities, social landlords, charities or voluntary organisations
People renting a caravan or houseboat
People residing in hostels
Persons whose tenancy includes a substantial amount of board (meals).

The people who fall within the above groups will continue to have their Housing Benefit claims based upon the old eligible rent rules whilst they reside in the types of tenancy outlined.

How are the Local Housing Allowance rates worked out?

The Local Housing Allowance rates are determined by the Rent Officer Service. Every month they will publish a new set of rates, which we will publish on this website (please go to the LHA Calculator and Rates page).

The Local Housing Allowance rates are based upon two factors:

The composition of your household, in other words, who many rooms you need to adequately accommodate your family, and
the area in which you live – which is known as a Broad Rental Market Area.

What is a Broad Rental Market Area?

In the past the Rent Officer Service valued individual privately rent properties for Housing Benefit purposes. With the introduction of Local Housing Allowance the Rent Officer Service will set monthly rates for different size properties within defined geographical areas based on the median rent charged by private landlords for similarly sized properties within that area.

Median means the middle value in a series of values, for instance, £80, £100, £110, £150, £165: the median value is £110. It is not an average of a series of figures.

These areas are called Broad Rental Market Areas (BRMA). Within Wrexham County Borough Council’s geographic area there are 3 BRMAs – Wrexham and South Clwyd, Salop, and West Cheshire.

You have no right of appeal against the Local Housing Allowance rates set by the Rent Officer Service.

How do you determine the number of rooms I need to accommodate my family?

The number of bedrooms you need is determined by counting how many times your household falls within the categories listed below:

One bedroom for:

every adult couple
any other adult aged 16 or over
any two children of the same sex aged under the age of 16
any two children regardless of sex under age 10
any other child.

For example, a couple with 3 children, two girls aged 13 and 11 years, and a boy aged 8 years will get an LHA rate based on 3 bedrooms (one for the couple, one for the daughters, one for the son).

Single claimants aged less then 25 will qualify for the shared room rate, although there are some exceptions to this rule.

The number of living rooms, kitchens and bathrooms needed in the property is ignored for the purpose of the calculation.

If you are unsure about how to work out the LHA rate applicable to your household’s circumstances please go to our online “LHA Room Calculator”.

What happens if the Local Housing Allowance Rate is substantially more than my contractual rent?

You will be allowed to keep up to £15.00 per week extra Local Housing Allowance. In other words if your contractual rent is £150.00 per week, and the Local Housing Allowance applicable to your circumstances is £200.00 per week, your Housing Benefit will be based upon £165.00 per week.

Using the above example will I automatically get £165.00 per week Housing Benefit?

Not necessarily. Your Housing Benefit will still be subject to an assessment of your income circumstances, and subject to deductions for any non-dependants that live with, and subject to any overpayment recovery action being taken by the Council.

Assuming you are on Income Support, income based Jobseekers Allowance, or income related Employment and Support Allowance, and you do not have anyone else living with you and you are not repaying an overpayment, your Housing Benefit will equate to the Local Housing Allowance rate.

In all cases whereby your income exceeds your applicable amount (the amount the Government says you need to live on), your Housing Benefit will be less than the Local Housing Allowance rate applicable to your circumstances.

How long will the same Local Housing Allowance rate be used to determine my Housing Benefit?

The Local Housing Allowance rate applicable to your circumstances will be reviewed annually unless there is a significant change in your circumstances such a change in your household composition.

Housing Benefit Payments under LHA

Usually LHA will be paid directly to you and it will be your responsibility to pay your landlord. You may be evicted from your property if you don’t pay your rent.

If you do not have a bank account already, you will need to set one up. This will enable you to pay your rent to your landlord by direct debit or standing order. You can get advice about opening and running a bank account from any bank or building society of your choice. You can also get advice from welfare organisations such as Citizen Advice Bureau.

In the useful links section there is a link to the Financial Standards Authority (FSA). This link will take you to an information leaflet about Basic Bank Accounts.

If you are worried about managing your money, please contact us.

In special circumstances, we can make payments to your landlords.

Application for Direct Payment to Landlord

Application for Direct Payment to Landlord – Word format 77Kb

Application for Direct Payment to Landlord – PDF format 56Kb

Application for Direct Payment to Landlord – Plain Text format 187Kb

LHA Safeguard Policy

LHA Safeguard Policy – Word format 106Kb

LHA Safeguard Policy – PDF format 94Kb

LHA Safeguard Policy – Plain Text format 1.2Mb

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