- Advance claims
- Change of circumstances
- Anniversary dates
- Service charges/board and lodgings
- Size criteria
- Joint tenants/shared accommodation
- Discretionary Housing Payments
- Supported accommodation/Transitional HB
- Rent arrears
- Appeal rights
Q. Does LHA replace HB or Rent Allowance?
A. No. LHA is a new way of calculating Rent Allowance for the deregulated private rented sector.
Q. What are the exclusions to LHA?
A. The new scheme will apply only to HB customers in the deregulated private rented sector. The intention is to focus the scheme on mainstream private tenancies and so a number of cases will be exempt from the LHA scheme.
The exemptions are:
- Registered social landlord tenancies
- protected cases, such as supported housing provided by certain local authorities, social landlords, charities and voluntary organisations
- tenancies which are excluded from current rent restrictions (such as pre-1989 tenancies)
- exceptional cases such as caravans, houseboats and hostels
- cases where the Rent Officer judges that a substantial part of the rent is attributable to board and attendance (e.g. hostel accommodation which already exists in the private sector).
Q. Are Crown Tenancies excluded from LHA?
A. Yes. As they are excluded from current rent restrictions they are also excluded from LHA. Be aware that customers who are irregular occupiers, tenants of licensees of properties managed by the Crown Estate or the Duchies of Lancaster or Cornwall are sometimes, incorrectly, thought to be Crown Tenants.
Q. Why is LHA paid to the customer rather than the landlord?
A. The Government wishes to move away from the current HB system where most customers have their benefit paid directly to their landlord, which means that they have no personal responsibility for their rent and many are unaware of how much rent is actually paid on their behalf.
By paying LHA direct to the customer it ensures they take on the personal responsibility of paying the rent to the landlord and helps develop the budgeting skills unemployed people will need when they move into the workplace.
It also plays a part in the wider cross Government strategy of greater financial inclusion. The Government also believes that wherever possible LHA should be paid to customers, as is the case for most other benefits and tax credits.
Q. Will all payments be made to customers?
A. Normally, payment will be made to customers. However, to avoid circumstances where the customer might risk losing their home, payments may be made to the landlord when the customer is:
- in arrears of 8 weeks or more
- unlikely to pay their rent
- deemed unable to manage their own affairs.
Q. Is LHA being introduced into the social sector?
A. No. We have recognised the concerns about introducing LHA for customers in social housing and have no plans to take forward legislation to extend the LHA approach to this area.
However, we will develop proposals for using HB to help address the high levels of worklessness in social housing. This will include encouraging customers to take greater personal responsibility for managing their own rent payments.
Q. What are LHA rates based on?
A. LHA rates are based on:
- Size criteria
- Broad Rental Market Areas (BRMAs)
Different LHA rates will apply in different areas. Within those areas, they will be based on the median rent charged by landlords in the private sector for properties of various sizes. LHA rates will be further broken down into ‘Room Rates’ that will apply depending on the size of the household, including any non-dependants. Size criteria will be based on allowing one bedroom for:
a) every adult couple
b) any other adult aged 16 or over
c) any two children of the same sex
d) any two children regardless of sex under age 10
e) any other child.
The number of living rooms, kitchens and bathrooms is ignored for the purpose of the size criteria.
Q. Will any excess of LHA be taken into account for the calculation of other benefits?
A. The general rule is:
- if HB is currently disregarded, so is LHA
- if HB is currently taken as income, so is LHA
LHA, or any excess of LHA, will not be taken into account for IS, JSA or Pension Credit. Nor will it be taken into account for tax credits, as LHA is not taxable. LHA is also not taken into account for the calculation of child support payments.
LHA may impact on other local schemes, such as Local Scheme Education Maintenance awards and Local Scheme Clothing awards. It is for the signatories of these and other means tested schemes to decide whether or not LHA should be taken into account.
There may be a few cases where excess LHA must be taken into account, for example the Severe Hardships Payment.
Q. Is LHA taken into account when calculating Child Support payments?
A. LHA is a payment of HB and the receipt of HB does not normally affect the calculation of other benefits. LHA is disregarded as income in its entirety. The only exception is in the case of the Severe Hardship Payments scheme, which takes account of all income.
Q. Where claims are made in advance which months LHA rate should we use?
A. If a genuine advance claim is made on 10 April for benefit to commence in 16 June then reg 83(10) says that the claim is treated as made in the week before the date of entitlement. Therefore the claim date would become 09 June and the LHA rate would be one applicable for June.
In another example, if the claim is made on the 10.04.08 for benefit to commence in 16.06.07 the date of claim would become the 09.06.07 and the June LHA rate would be used.
If, however, a claim were made 10 April but due to delays in the LA was not processed until 16 June and therefore the first payments sent in June, the claim date is still 10 April (the effective date would be 16 April unless linked to a start of liability) and the LHA would be the April rate.
Q. Will the level of LHA be from the date of claim or the date the claim is actually assessed?
A. LHA relates to the actual date of claim rather than the date of assessment. However, if the date of claim was before the LHA start date, the case would have to be treated under existing rules rather than LHA.
Q. How will backdated claims be treated?
A. If a claim is backdated the local authority will apply the LHA rate in force on the date of claim. The ‘date of claim’ means the date when the claim was made or treated as made under existing regulation 83. The phrase ‘date of claim’ covers both the date when the claim is initially made, and the date it is backdated to. We want you to use the earlier date when calculating a customer’s allowance.
For example, if a customer makes a claim in June and a decision is taken to backdate it to February, the LHA rate payable will be based on the February LHA, not the June LHA.
If the claim was assessed using the June rate and the customer only notifies the local authority in July that they want the claim to be backdated to February and a decision is made to backdate to February, the customer will be paid the February rate and any over/under payment resulting from initial payment at the June rate will need to be recovered/reimbursed.
If a claim is backdated to a period before LHA begins, the customer will be assessed under the old scheme and any over/under payment resulting from the initial payment will need to be recovered / reimbursed. Once/if the customer has a break in their claim of a week or more or they move address they will move onto LHA under the normal rules.
Q. Will benefit be reassessed when a customer moves into work?
A. Yes. A customer may have an increase or a decrease in his benefits depending on his earnings.
Q. What action should be taken to determine the rent for a pre-LHA period where Pension Credit and associated HB claim has been backdated to a point prior to the introduction of LHA?
A. The Rent Service will need to provide a determination for the pre-LHA period.
Q. Will mid-year rent increases be taken into account?
A. No. The LHA rate in payment will apply from the date of claim and continue to apply for a year unless an update is triggered by a change of circumstances. The anniversary review date will be the earlier of the effective date of the claim or the effective date of the backdated award.
Q. What if a customer moves house within the local authority area?
A. Customers changing address to a property in the private sector after 7 April 2008 will move on to the LHA .
Q. Does the customer have to complete a new claim form for a change of address, even when the change is within the local authority area?
A. As now, if a customer moves within the LA area they will not need to fill in a new claim form, but they will need to tell you about their circumstances at the new address.
Q. Will claims be re-assessed every 52 weeks or on the anniversary of the last assessment?
A. We expect that a customer’s entitlement to an allowance will be reviewed on the anniversary of the most recent assessment and the new rate will apply from the following Monday. For example, if a customer claims on 6 October 2008, his claim will be re-assessed on 6 October 2009 and the new rate will be paid from the following Monday.
Q. Will a new eligible rent still be re-calculated on the anniversary of the date of claim, even if there is a change of circumstances during the year?
A. No. If there is a change of circumstances which results in the calculation of a new eligible rent, the new eligible rent would only be re-assessed on the anniversary of the date when it was calculated. For example, if a customer’s eligible rent was originally calculated on 6 October 2008, it would be re-calculated on the anniversary of this date (i.e. 6 October 2009). However, if changes in the customer’s household on 8 December 2008 prompted a new eligible rent calculation, the customer’s eligible rent would be recalculated again on the anniversary of this change (i.e. 8 December 2009) and not the anniversary of the original claim (i.e. 6 October 2009).
Once LHA has been recalculated, it takes effect for the benefit week that starts on or after the anniversary. If that benefit week falls in the following month, the LHA rate used will still be that for the previous month, i.e. the month in which the change occurred.
Q. Should we implement the new LHA rate from the Monday of the benefit week in which the anniversary date falls?
A. The new LHA rate should be implemented from either the Monday if the anniversary falls on a Monday or the following Monday if the anniversary falls on any other day of the week as set out in D&A regs 7A(2) and 8(15).
Q. How will service charges be handled?
A. Under the LHA no consideration will have to be made of service charges that are included within the contractual tenancy agreement. Tenants will receive up to the maximum applicable LHA rate (capped at £15.00 excess).
Q. In cases where the customer pays their landlord for services and where the customer is deemed to have difficulty managing their own affairs, should the local authority pay the landlord for the services out of any excess LHA that is left after rent has been paid to the landlord?
A. No. Where services are not part of the contractual rent agreement this is a matter for the tenant and the landlord to resolve. The local authority should not become involved.
Q. Can payments to landlords, up to the amount of the contractual rent, include service charges?
A. Yes, if the services charges are included in the contractual rent and are a condition of occupancy.
Q. If a customer is in tied accommodation but stops working for his employer/landlord might he be entitled to LHA?
A. Yes. As with normal HB rules once the employment ends the customer may be entitled to LHA.
Q. How will board and lodgings cases be handled?
A. Any claim, which the local authority believes to include board and attendance should be referred to the Rent Officer for consideration. If the Rent Officer decides that board and attendance is not substantial a payment of LHA is appropriate. If board and attendance is substancial, the Rent Officer will provide a decision on which to calculate HB as the case will be exempt from the LHA scheme.
Q. How are size criteria applied?
A. Single customers aged under 25 years
Single customers aged under 25 years, i.e. young individuals, who do not have a non-dependant living or treated as living with them will be entitled to the standard rate for a bedroom in shared accommodation. However, this will be based on a different definition than the existing Single Room Rent (SRR), which limits HB entitlement for this group of claimants to the rate for a room in shared accommodation.
NB: This does not apply to under 25s who have the severe disability premium included in their benefit assessment and certain people under the age of 25 are not classed as a “young individual” e.g certain care leavers less than 22 years of age . They will be entitled to the one-bedroon rate of LHA regardless of the size accommodation they are actually occupying.
This new shared rate will be based on properties where, while the tenant has a room or bedsit of their own, all or some of the facilities are shared, e.g. kitchen/facilities for cooking, bathroom and toilet, and a room suitable for living in.
A. Single customers aged 25 years and over
Single customers aged 25 years and over, and couples with no dependent children, will be entitled to the rate for a one bedroomed property, e.g. a one bedroom flat or studio or other kind of self-contained accommodation, provided they actually rent a property of at least this size.
Q. Will there be any flexibility in LHA to reflect the needs of customers with disabilities?
A. We appreciate that disabled customers can be limited in the type of property that they can rent because they may require a more expensive home without stairs or closer to local facilities. They may also need larger property for specialist equipment. Single disabled customers, under 25 and in receipt of Severe Disability Premium, will qualify for a higher rate of LHA rather than the shared accommodation bedroom rate. However, other disabled customers will not be entitled to a higher rate and we feel, rather than adjusting the LHA rate for all people with disabilities, local authorities will be able to continue to use discretionary housing payments, to ensure that these customers can find decent accommodation that meets their needs.
Q. Do you include foster children when considering the LHA bedroom rate?
A. HB regulations require the customer and their family to occupy the dwelling as their home. Foster children are not considered as being members of the customer’s household, therefore should not be treated as an occupier and consequently are not included under the size criteria.
Q. How should foreign students placed with host families be treated under LHA size criteria?
A. If the student is aged between 14-17 years of age they should not be treated as a boarder, sub-tenant or non-dependant in view of the short time that the students stay in the property. When they stay for longer period e.g. a year or more they should be treated as a boarder, sub-tenant or tenant and therefore included in the size criteria.
Q. When a child reaches 10 or 16, if this affects the size criteria, when should the LHA rate be amended from?
A. The change will take effect from the Monday following the child’s birthday. However, the LHA rate applicable will be the rate in payment on the child’s birthday.
Q. Will there be a flat rate for all properties with more than 6 bedrooms?
A. No. The Rent Officer will routinely provide rates for all property sizes up to six bedrooms, but will be required to provide rates for larger properties if they:
- are asked to do so by a local authority because that authority has received a claim from a customer with a requirement for a larger property
- consider that larger house sizes are likely to be needed by benefit customers in the area
Q. Can a customer gain extra LHA because his estranged partner visits the property regularly to stay with the children and needs a room to sleep in?
A. No. Only those who occupy the property as their home count towards bedroom entitlement.
Q. Where LHA customers have partners or household members who have no recourse to public funds are such people included in the customer's room entitlement under the size criteria?
A. As long as the customer is not the person who has no recourse to public funds then the partner or household member will be included in the customer's room entitlement in the same way as they would have been included in the Rent Officer Referral.
Q. Will a person's LHA change due to the household size changing temporarily, e.g. because a person has gone into hospital or into temporary respite care?
A. Normal rules on temporary absence from the home apply in LHA cases. This will not normally make a difference for the first 52 weeks of an absence.
Q. What LHA would apply to a care leaver who is under 22 and lives in shared accommodation?
A. Only someone who is a young individual is subject to the Shared Room Rate restriction. A Care leaver under 22 is not a “young individual” which means that they come under the normal size criteria. Once they reach 22 this is a change that affects the category of dwelling and they will now fall within the size criteria for a single person under 25 (unless they have a partner, child or non-dependant).
Q. If a woman is pregnant, does this increase the LHA size criteria?
A. No. This would only potentially increase at the point the newborn baby becomes an occupant of the property.
Q. How will joint tenants be treated?
A. Joint tenants will receive a rate of LHA based solely on the customer’s family plus any non-dependants, sub-tenants or boarders of the customer.
Where joint tenants share a non-dependant, the non-dependant is counted in the size criteria but will only have an apportioned non-dependent deduction. For example two joint tenants who share a non-dependant will each be entitled to the two bedroom rate of LHA, but will have 50% non-dependant deduction applied to their benefit calculation.
Q. How do you work out the percentage split on which to base joint tenancies paid under LHA?
A. Under LHA single joint tenants will be entitled to the lower of the applicable LHA rate or the cap rent plus £15. Which means that they will be entitled to the shared room rate or the apportionment of their rent plus £15.
Q. Can Discretionary Housing Payments be made up to LHA rates (even if this is greater than the actual rent payable)?
A. No - the normal rules for Discretionary Housing Payments will apply.
Q. Are customers who are in receipt of Transitional HB included within the scope of LHA scheme?
Q. Is accommodation that is provided by a private company with care provided by a different body (whether public, private or voluntary sector) within the scope of LHA scheme?
A. Supported housing tenancies (supported accommodation) provided by a private landlord (i.e. not a charity or voluntary organisation) are not exempt and will fall under the LHA scheme.
Q. Are cases where customers are provided with floating support by Supporting People included within the scope of LHA?
A. Yes. Customers are entitled to LHA even where they are receiving support from Supporting People, provided they are in regular private sector tenancies.
Q. Should the payment be changed so that the landlord receives it direct once the tenant is over 8 weeks in arrears?
A. If rent arrears are owed, the local authority will arrange to make payments direct to the landlord unless it is not in the customer’s overriding interests to do so. However, landlords are encouraged not to wait for the 8-week period to be reached before contacting the local authority.
Q. What action should be taken where a landlord is in pursuit of long term, pre-LHA rent arrears?
A. In this instance you would be expected to contact the landlord and investigate further. For example: how long have the arrears been outstanding and has the landlord been pursuing them? If arrears have been accruing for a number of years and landlord has taken no action it would be entirely reasonable for you to query why he has suddenly decided to take action.
Local authorities will have discretion to make decisions on direct payments based on the evidence provided.
However, you should be trying to prevent cases arising where a customer is clearly not using their benefit money to cover their housing costs and you should be encouraging landlords to report any missing payments at the earliest possible opportunity rather than resorting to the 8 weeks provisions. In most cases you would be looking at earlier evidence where it appears that the customer is unlikely to pay their rent.
Q. If landlords demand 8 weeks rent in advance, is the customer ‘in arrears’ after one day of the tenancy so that the local authority is obliged to pay the landlord directly?
A. No. We recognise that there is no definition of “arrears” in the HB (General) Regulations 1987, therefore we take the view that the customer must be in arrears of an amount equivalent to 8 weeks or more (Regulatrion 93) of the amount he is liable to pay his landlord as rent. Local authorise should make decisions based on the ordinary meaning of the word ”arrears” and that was the policy intention and the purpose behind regulation 93.
Q. What can the local authority do where it appears that the customer is not payment their rent?
A. The local authority may pay benefit directly to the landlord for up to eight weeks whilst it is investigating the circumstances of the case. By the end of this period, it should make a decision whether to pay benefit to the landlord or customer.
Local authorities will have to make a decision based on the evidence they have received who is best placed to receive LHA payment.
Q. Who may appeal against LHA decisions?
A. Current arrangements continue under LHA. Only a "person affected" by a decision may appeal.
Q. Will a customer/landlord be able to appeal against a local authority’s decision that a customer is/isn’t vulnerable or unlikely to pay his rent?
A. Yes. These decisions will be made under Regulations 95 and 96 of the HB Regulations 2006, which cover direct payment to landlords. Customers and landlords are persons affected and may appeal against any decision made.
Q. Will a customer/landlord be able to appeal against a local authority’s decision that the landlord should not be able to receive HB on the customer's behalf, i.e. as an "agent"?
A. No. This decision is not appealable as it is made under regulation 94(3).
Q. Will there be any right of appeal against the levels of allowances for each Broad Rental Market Area determined by the Rent Officer?
A. No, because an appeal would call into question the level set for the whole area, so any changes to the published maximum rents would require local authorities to identify and adjust all claims that had been made using that rate. It would undermine the transparency and certainty of the scheme for other customers.
Q. Will there be any right of appeal by a person affected, about the application of LHA in an individual case?
A. Yes. The general principle is that there should be a right to ask for re-determinations of decisions about individual cases, but not of decisions that may affect many other people (such as the level of the allowance – see above question).
Local authorities can therefore ask for re-determinations of a Rent Officer’s decision about whether a claim includes substantial board and attendance. However, there is no right to ask for a re-determination of a Rent Officer’s decision about, for example, a Broad Rental Market Area or the LHA rate.
Q. What will be the subsidy requirements for the year? Will there be any changes required for the current subsidy returns to DWP, CLG, NAW, and Scottish Executive etc?
A. Information about the expenditure in LHA cases has been collected on the subsidy claim forms from 2005/06 and will continue to be collected in the future.
Q. If the customer is subject to transitional protection at go-live date does the payment based on the protected amount of rent get treated for subsidy as falling under either Deregulated New Scheme/Deregulated Old Scheme or is it treated still as made under LHA?
A. Transitional protection does not apply to existing regulated or deregulated claims that convert to LHA at or after national rollout following a change of address. However transitional protection were put in place for those customers, in the Pathfinder and Second Wave Group areas, who are already receiving LHA. Their existing amount of LHA will be protected where their LHA under the new LHA rules would be less than that under the current LHA rules.
Q. If it is based on an older protected rent amount, and particularly where it is under Deregulated Old Scheme, would you use some of the different subsidy classifications e.g. over market rent, or would it simply be paid as normal because it comes under the LHA scheme?
A. Only those existing customers in non-Pathfinder and non-Second Wave Group areas, who change address at or after national rollout, will convert to LHA from current benefit rules, but they will have no transitional protection. They will have their awards assessed under the LHA rules, along with all new claims. All other existing awards will continue having their benefit assessed under deregulated new/old scheme or regulated rules as before. In both cases the subsidy will be paid according to the rules that apply to the particular claim. The Department is planning to review those awards assessed under deregulated new/old scheme or regulated rules after the second year of LHA.
There are and will be a number of HB customers in certain tenancy types who are and will be exempt from the LHA rules. These will continue to have their eligible rent calculated, and subsidy paid, under deregulated new/old scheme or regulated rules as now.
Q. If the customer is in arrears, can the local authority use the excess LHA to re-pay the arrears by making payment to the landlord rather than to the customer?
A. Payment to the landlord can only cover the amount due in rent, but this could also include payments of arrears. It will be for the local authority to decide whether any excess benefit can be used to pay off the arrears.