Local Housing Allowance
Background
Local Housing Allowance is a new way of working out the maximum Housing Benefit for private tenants. This is intended to simplify the current system.
It is due to roll out across the country from April 2008, although the scheme has been piloted by 18 Local Authorities known as ‘Pathfinders’ since November 2003.
Housing Benefit will still be assessed in the same way it was before the introduction of LHA, based on income, savings and household composition but will use LHA rates instead of actual rent to calculate the maximum Housing Benefit that can be paid.
Aims and Objectives
Fairness – LHA is based on the size, composition and location of a household so two households with similar circumstances in the same location will receive similar amounts of benefit
Choice – Tenants can take greater responsibility over how they spend their income. They are able to chose the size of their accommodation and decide how much they need to pay towards their rent
Transparency – With this new simpler system tenants are able to compare how much help is available towards their housing costs in different areas and for different sized properties
Personal responsibility – With payments being made directly to the tenant, they are encouraged to take responsibility for their own finances, helping them to develop the skills they will need as they move in to the work place
Financial inclusion – Tenants will be encouraged to have payments of LHA made directly in to their bank accounts and to set up a standing order to make rent payments to their landlord. This is a safe and secure method of payment that guarantees the rent payments are made
Reduces barriers to work – Greater certainty about what in -work benefit they could receive should encourage customers to take the step away from welfare and into work
Improved administration – There will no longer be a need for the complicated individual referrals to the rent office that have previously caused delays in the processing of claims
