City of Edinburgh Council Welfare Rights Service1 Local Housing Allowance NAWRA 14 th September 2007...

City of Edinburgh Council Welfare Rights Service 1

Local Housing Allowance

NAWRA

14th September 2007

EDINBURGH

Nancy Fowler Welfare Rights Officer



Pilot introduced in UK on February 2004 (Welfare Reform Bill) Edinburgh only Scottish area in Pilot of 12 authorities in UK Argyll and Bute since April 2005 National roll-out from April 2008

For Private tenants claiming Housing Benefit Allowance depends on the area in which the claimant lives, and

the number of people living in their home. Non Dependant Deductions (NDD’s) apply as per Housing

Benefit (HB)


Housing Benefit or ‘Rent Rebate’ – Local Housing Allowance (LHA)

LHA is for private tenants on a low income

A ‘private tenant’ is someone who rents property or a room from a private landlord

LHA may not apply if the rent includes an amount for meals e.g. B+B accommodation.


When is LHA not paid

Property is rented from the council Landlord is a housing association The rent has been registered as a ‘fair rent’ The tenancy started before 1989 Care, support and supervision is included in

tenancy Claimant lives in a caravan, mobile home or

houseboat.


How much LHA is paid?

Depends on;

The number of rooms needed The area the property is in Any income or savings claimant has (Means-

Tested) Whether claimant has a non-dependant living

in the property (NDD’s same as for HB)


How many rooms are allowed?

One BEDROOM for;

Every adult couple (married or unmarried) Any other adult aged 16 or over Any two children under age 10 Any two children of the same sex under 16 Any other child


How many rooms are allowed?

Living Rooms;

One living room if one to three people live in the property

Two living rooms if four to six people live in the property

Three living rooms if seven or more live in the property


Couples with no dependent children

Are awarded the rate for a two-roomed property if renting a ‘self-contained’ property

‘Self-contained’ means at least one room plus a bathroom, toilet and cooking facilities that no one else uses

If sharing facilities then the shared LHA rate is paid


25+ and Live Alone

Can be paid the rate for a two-roomed property provided it is self contained with at least two rooms i. a one bed-roomed flat

If living in a property where all or some facilities are shared then shared LHA rate is paid



Normally payments are made direct to the tenant

Transitional protection to ensure those already in receipt of benefit do not lose out

Pilots in Edinburgh and 8 other councils. Edinburgh is the Scottish council


How does it work in practice?

Compared to the old system people will now know how much financial help they will get with their rent

If accommodation is cheaper than average then they can keep the difference

If accommodation is more expensive they have make up the difference


Maximum Rent

This is the local Housing Allowance set by the rent officer for the ‘broad rental market area’ in which the tenant lives and for the size of the house they are entitled to

The maximum rent is updated monthly


The eligible rent

Usually the maximum rent except

for those with transitional protection

where there has been a death in the house no reduction in eligible rent for a year

where no claim for HB in previous year eligible rent will be actual rent

For all of the above if tenant is better off with LHA based eligible rent then that will apply


Maximum Benefit

Will be;

rate at time of claim

(see current rate handouts)

The rate is fixed for twelve months and then updated annually


Payment

In most cases rent is paid to tenant except;

pay first cheque to landlord to cover overdue rent pay landlord if tenant has difficulty managing their

own affairs Pay the landlord if LA thinks claimant will not pay

their rent pay landlord if more than 8 weeks of arrears any excess is paid to tenant


Benefits?

Fairness: The new scheme has been designed to pay the same amount to tenants with similar circumstances living in the same area

Choice: The intention is to allow tenants to trade between the quality and the price of their accommodation

Transparency: The expectation is that the scheme will make it easier for tenants to find out in advance how much rent could be covered by the new scheme


Benefits? Personal Responsibility: It is hoped that by paying the

allowance to the claimant it will encourage them to take responsibility for budgeting for and paying their rent themselves, rather than having it paid for them.

Increased work incentives: Greater certainty about what in work benefit they could receive is expected to help claimants bridge the gap between being unemployed and taking a job.

Simplicity: There will no longer be a need for the complex rent restrictions and individual referral of rents to rent officers.

and private tenants on HB are in a position to shop around for

cheaper accommodation


Criticisms

The new scheme’s success at meeting its objectives hinges on some large assumptions:

that by using the standard allowance, the rent for a decent home in the private sector that meets a tenant’s needs will reflect the level of this allowance

that by publicising these allowances and simplifying the claim process, private landlords will be more inclined to let to HB claimants;


Criticisms

The definition for determining the local reference rent will, as now, be crucial.

National research has shown that, under the current rules, private tenants face an average shortfall of £19 a week.

Limits tenants choice and may lead to a reduction in the number of landlords willing to let to claimants


Changes from April 2008

Capping the amount of LHA a claimant can receive over and above contractual rent – CAP to be set at £15.

Adjusting size criteria so it is based on bedrooms needed – no extra for additional living areas.

LHA will apply to new claims only from April 2008.

LHA rates will be based on median point of local rents rather than the mid point at present.


85-87 South BridgeEdinburghEH1 1HN

0131 225 1255Monday, Wednesday, Thursday 9.30 a.m. to 4.00 p.m.

Tuesdays 10.00 a.m. to 4.00 p.m. (opens 11.00 a.m. first Tuesday of month)

Fridays 9.30 a.m. to 3.30 p.m.

City of Edinburgh Council Welfare Rights Service1 Local Housing Allowance NAWRA 14 th September 2007...

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