Important Changes to Local Housing Allowance

From 1 April 2011, the government has changed the way Housing Benefit is calculated. These changes affect claimants who have their Housing Benefit assessed using Local Housing Allowance (LHA). Local Housing Allowance is the name given to the way Housing Benefit is calculated for people who rent from a private landlord

The main changes are:

• Removal of the five bedroom Local Housing Allowance rate so that the maximum level is for a four bedroom property.
• Introduction of absolute caps so that Local Housing Allowance rates cannot exceed:
- £250 for a one bedroom property,
- £290 for a two bedroom property,
- £340 for a three bedroom property,
- £400 for a four bedroom property.
• the £15 weekly excess that some customers can receive under the Local Housing Allowance arrangements will be removed.
If you were already entitled to LHA before 1st April you may be entitled to transitional protection which means you may not be affected by the changes for up to a maximum of 9 months from the first anniversary date after 1 April 2011. Your anniversary date is usually 12 months from that date you first claimed Housing Benefit. Your claim is recalculated on this date every year.

Transitional protection will end sooner than nine months if:
• You have a change of address
• You become entitled to a larger category of property and the maximum rent (LHA) is equal to or higher than the transitionally protected eligible rent
• You become entitled to a smaller category of property
• You are entitled to bereavement protection (up to twelve months) following the death of someone in the household

If you are making a first or new claim then you will be affected by the changes immediately.

Local Authority Housing Benefit Departments will be writing to tenants affected to explain how the changes might affect you and when.

If the changes mean that your Housing Benefit will be reduced then you may need to consider:-

• Negotiating a rent reduction with your present landlord
• Getting money advice on budgeting
• Moving to a cheaper area/smaller property

If your tenancy is coming up for renewal of you are thinking or moving you should get advice before signing any new tenancy.

The legality of these changes is to be tested in judicial review proceedings that have been brought by the Child Poverty Action Group (CPAG) against the coalition government. CPAG consider that the cuts will have a dramatic effect on households, particularly those in London. It is expected that the High Court will give judgment in June.

The above is not a substitute for tailored expert legal advice. You are advised to seek formal advice in respect of any specific case. We have a specialist housing team of Housing lawyers at Hanne & Co so please consult us for further advice. 

Hanne & Co has an experienced housing law team specialising in a variety of issues realting to your housing.  Please visit us at our website.