What is LHA?
From April 2008, there has been a new way of calculating housing benefit. This is called Local Housing Allowance (LHA).
LHA is available for people on a low income who rent from private landlords. Some tenants are excluded from receiving LHA and the Housing Benefit rules still apply.
The following people are amongst those who have their housing benefit calculated under Housing Benefit rather than LHA:
- Tenants with pre-1989 tenancies
- Tenants renting from registered social landlords
- Tenants renting from voluntary organisations or charities
- Tenants renting a caravan or houseboat
- Tenants whose rental accommodation is in a hostel
Like Housing Benefit, LHA is means-tested. You have to provide proof of your tenancy, identification, National Insurance Number and your finances.
What Are The Differences Between LHA And Housing Benefit?
The Housing Benefit scheme is designed to pay enough benefit to cover rent payments. Therefore, if someone qualifies for full benefit, they would potentially have all their rent paid, whatever the size of their property. Therefore, tenants who take tenancies on larger, more attractive properties could get paid more benefit than those who take tenancies on smaller, less attractive properties.
From April 2008, when LHA became effective, there is a set of LHA rates for different sizes of properties in different areas of the Borough. The LHA rate you qualify for depends on the size and make-up of your household. This is the amount you then receive, allowing a choice between paying more to live in a more attractive property and paying less to live in a less attractive property.
Under LHA, it is easier for landlords and tenants to find out in advance how much help tenants may receive towards their rent. There is no longer a need to wait for a pre-tenancy determination to find out the maximum Housing Benefit payable.
LHA is paid to the claimant in most cases, rather than the landlord. This is to encourage LHA claimants to budget and pay their own rent while on benefit, making it easier to do the same when in work.
Who Receives LHA?
Only tenants renting from a private landlord are affected by LHA. You are not affected if:
- Your tenancy started before 1989
- You live in a mobile home or caravan
- You live in a houseboat
- You live in a property in which you are provided with care
- You rent from a Housing Association
Tenants currently receiving Housing Benefit continue to do so unless there is a break in their claim or they move address. Any new claims will be assessed under LHA unless they fall into one of the above categories.
How Will I Be Paid LHA?
In most cases, LHA is paid to the claimant rather than the landlord. In order for it to be paid to you, you need to hold a bank account. Most of the banks have basic bank accounts, which you are able to open for this purpose.
Once you have been paid your LHA, it is your responsibility to make sure that the correct amount of rent is paid to your landlord. Therefore, if your LHA payment is lower than your rent, you need to pay the difference.
There are cases in which we will pay your landlord direct. These include if you are more than eight weeks in arrears with your rent payments, or if we consider that it is in your best interests to do so.
We have a safeguard policy to ensure that we do not pay a tenant direct when it would be irresponsible for us to do so.
You may also need to know:
- How much LHA will I be paid?
- What can I do if I disagree with a decision about LHA?
- How will my LHA be worked out?
- What is a Broad Rental Market Area?
You can get further information about LHA on the Department of Work and Pensions' official website.
You can also email us. Alternatively, you can contact the benefits team on 01732 876376.