The National Rollout of Local Housing Allowance

LHA - Contents • Why LHA was introduced• Pilot Stage• Local Housing

Allowance?• Tenancies affected by

Local Housing Allowance• Exempted?• What are the changes?• Implementation of the

changes• Calculating LHA –

Number of rooms

• Protections• Payments• Safeguards • Excess Payments &

Gainers• How LHA affected

claims in Lewisham• Caseload trends• Rent arrears &

Vulnerability

Why was LHA introduced?

• To simplify the HB scheme

• HB criticised as complex, doing little to promote personal responsibility

• The old scheme did little to assist tenants to develop essential financial and budgeting skills

• Barriers to work

Pilot Stage

• Lewisham has been a ‘Pathfinder’ authority since December 2003

• 18 Authorities worked in line with Local Housing Allowance

• Royal Accent was received in October 2007, which allowed the remaining authorities to go live with Local Housing Allowance from April 2008.

Local Housing Allowance

•LHA set each month

•Set locally by Rent Officers based on local rents

•Rates published so that tenants know how much they will receive

•Flat rate according to household size and location

Tenancies affected by Local Housing Allowance

•Deregulated private tenancies that have been entered into since 1989 and are not covered by any of the exemptions such as:

Exempted?

•Those currently not subject to the Rent Officer rules such as pre 1989 tenancies

•Mobile homes and caravans

•Housing Associations

•Board and Lodge

•Supported accommodation provided by a charitable or voluntary organisation

What are the changes?

• Broad Rental Market Area (BRMA) are now calculated on median rents not average

• Removal of living rooms from calculation

• Based on Bedrooms needed only

• Introduction of a cap for excess payments of benefits

What are the changes?

LHA National Rollout will only affect:

•New Claims

•Change of Address

•Break in claim

•Substantial change in household makeup

Implementation of the changes

• Letters have been sent to tenants advising them of the changes to the scheme

• Posters have been produced explaining what has changed

• Our website have been updated to reflex those changes

• Our mainframe system has also been updated

• All front/back office staff have been trained on the changes.

Calculating LHA-Number of rooms?

One bedroom for:

– Every adult couple (married or unmarried)– Any other adult aged 16 or over– Any 2 children under the age of 10– Any 2 children of the same sex aged 10 -

15– Any other child

Local Housing Allowance

Under 25’s

• Single claimant’s under 25 will be entitled to shared room rate. The exemptions to this are if the claimant is a care leaver (up to the age of 22) or in receipt of severe disability premium, they will be entitled to the 1 bedroom rate

Local Housing Allowance

Over 25’s

• Single claimants over 25 years old and couples with no dependant children will be entitled to the 1 bedroom rate providing they rent a property at least that size

Payments

•Direct to the claimant unless 8 weeks arrears

•Promoting bank accounts

•BACS or crossed cheque

•Help to access bank accounts and

•Promoting money management advice

Safeguards

•Recognised risk that some tenants may struggle with paying their rent

•Requests can be referred by landlord or third party

•Each case assessed on its own merits

•Short term reviews

Excess Payments & Gainers• At present if a claimants rent is less than the LHA

amount the tenants keep the difference

• An average gainer receives an excess of £38 per week

• With the biggest gainer receiving an excess of £380 per week

• From April 2008 there will be a cap of £15 excess for all new claims. Current claims will change when they have a change in circumstances or in April 2009 if there has was no change

How LHA affected claims in Lewisham

Caseload trends

LHA caseload has increased from 3,800 in December 2003 to 5,468 in March 2008

LHA appears to be a significant factor in this increase

Rent arrears & Vulnerability

• 606 claims were paid directly to the landlord due to the customer being 8 weeks or more in arrears, or being deemed unlikely to pay the rent.

• 667 were treated as vulnerable and Housing Benefit was paid directly to the landlord

• Direct payments due to rent arrears are reviewed regularly

At the end of March 2008, of the 5,468 customers receiving LHA

Local Housing Allowance

Any Questions?