Changes to Local Housing Allowance - January 2012
Local Housing Allowance is changing from 1 January 2012 for single people aged 25 to 34 who rent from a private landlord.
What do the changes mean?
From 1 January 2012 single people aged from 25 to 34 will only be entitled to a maximum Housing Benefit shared accommodation rate. As of January 2012 that rate is £63.46.
By single people we mean someone who is not living:
- As a couple
- with dependent children
If you currently claim Housing Benefit and receive the one bedroom rate - your Housing Benefit may go down when you move to the shared accommodation rate – leaving you with a shortfall in rent to pay.
If your Housing Benefit is paid directly to your landlord, the amount your landlord gets for your rent could go down, leaving you to pay any shortfall.
If you are getting, or thinking of claiming Housing Benefit, you need to consider this change before you renew or make a new tenancy agreement with a private landlord.
Who will the changes affect?
These changes will affect you if:
- you rent accommodation from a private landlord
- you already get Housing Benefit, or are going to make a new claim
- you are single
- you have children to live with you BUT you do NOT get the Child Benefit
- you are under 35 years old
- you live in a self contained property
These changes will not affect you if:
- You rent from a housing association.
- You are under 22 years old and have been in care.
- You live in supported housing provided by a housing association, registered charity, and voluntary organisation.
- You get the severe disability premium in your benefit because you are entitled to the middle or higher rate care component of Disability Living Allowance.
- You need an extra bedroom for a carer who provides you with the overnight care you need but who doesn’t normally live with you.
- You have spent at least three months in a
o homeless hostel or
o a hostel specialising in rehabilitating and resettling within the community. To benefit from this exemption you need to have been offered and accepted support services to enable you to be rehabilitated or resettled in the community.
- You are a person managed under active multi-agency management under the Multi Agency Public Protection Arrangements
When will the changes affect me?
If you are already getting Housing Benefit you will have been told of the changes to the Local Housing Allowance rates from April 2011. You will have been given nine months protection from these changes. You will not be affected by the change to the shared accommodation rate until the nine months has ended.
The nine months start from the anniversary date of your claim after 1 April 2011. For example, if your anniversary date was in June 2011 the change to the shared accommodation rate will not affect you until March 2012 (nine months later).
If you make a new claim for Housing Benefit before 1 January 2012, the change will affect you from your next anniversary date.
If you live in a privately rented home and make a new claim for Housing Benefit after 1 January 2012, the change will affect you straightaway.
Example – anniversary date is after 1st January 2012
A person aged 28 lives in a one bedroom self contained property and claims Housing Benefit in March 2011. They are entitled to the one bedroom self contained rate from the outset – for example £89.50 and their rent is £90. At the March 2012 anniversary date the transitional protection would apply for the next 9 months until December 2012 when the shared accommodation rate would apply. This could be a little as £63.46 meaning they have a £26.54 shortfall.
Example – those with rents consistently below the LHA
A person who is 32 years old is paying a rent of £70 a week for a one bedroom self contained property. They make a claim for Housing Benefit in June 2010 when the LHA one bedroom self contained rate is £91.15. Their eligible rent is £85 (£70 + £15) and they receive £85 as the excess over rent is capped at £15.
At their June 2011 anniversary date they are still paying £70 a week for the property but are no longer entitled to the £15 addition. The new LHA one bedroom self contained rate is £80.77. Therefore their maximum rent (LHA) is their cap rent of £70.
This is lower than their pre-April 2011 eligible rent of £85 so therefore they are entitled to transitional protection for 9 months and their eligible rent is now £70.
Although they have no financial advantage, as they continue to have their rent met in full, they are still transitionally protected for 9 months from June 2011 until March 2012 at which point the shared accommodation rate applicable at that time will apply. This could be as little as £63.46 which is less than their rent.
One avenue of assistance may be the Discretionary Housing Payment Scheme, which the council operates. This is a scheme that aims to provide claimants with temporary financial assistance on top of any Housing Benefit payment, where it is considered help is needed with housing costs.
You may be eligible for this, should you wish a claim to be considered please complete the Discretionary Housing Payments claim form and return it to your local office as soon as possible.
If you have any queries or concerns regarding these changes please contact us on 01546 605512 or visit us at your local Customer Service Point.