What is Local Housing Allowance?
Local Housing Allowance (LHA) is a new scheme for tenants who rent from a private landlord and make a ‘New’ claim for Housing Benefit on or after 7th April 2008.
Local Housing Allowance has already been implemented and tested in several different Local authorities throughout England / Scotland and Wales, the scheme has proved to be very successful.
The scheme allows a person to have more choice and responsibility over their finances and where they want to live.
The rules for calculating a person’s entitlement to benefit have not changed – we will still require proof of a person’s income, capital and proof of the rent that they pay.
Why is LHA being introduced?
Local Housing Allowance is being introduced in an aim to simplify Housing Benefit which will support the Governments wider objectives for Welfare Reform.
The aims of Local Housing Allowance are:
Fairness – LHA bases the maximum amount paid to tenants on the size, composition and location of household. Therefore, two households in similar circumstances in the same area will be entitled to similar amounts of benefit.
Choice – Tenants are able to take greater responsibility and choose how to spend their income in a similar way to tenants who are not in receipt of benefits. Like other tenants, they are able to choose whether to rent a larger property or to spend less on housing and increase their available income.
Transparency – The current link between Housing Benefit and individual rents is complex and does not set out clearly what level of state support is available for people on low incomes. A clear and transparent set of allowances helps tenants (and landlords) know how much financial help is available from the state. Tenants are able to compare how much support is available towards their housing costs in different areas and for different property sizes.
Personal responsibility – Empowering people to budget for and to pay their rent themselves rather than have it paid for them, helps develop the skills unemployed tenants will need as they move into work. Currently around 40 per cent of Housing Benefit payments in the private rented sector are made to tenants with the remainder paid straight to landlords. The Government believes that, wherever possible, LHA should be paid to tenants as are most other benefits and tax credits.
Financial inclusion – We want people to have their housing payments paid into a bank account and to set up a standing order to pay their rent to their landlord. This has the advantage of being a safe and secure method of payment and provides certainty for landlords that rent will be paid.
Improved administration and reduced barriers to work – For working age tenants, LHA provides greater certainty about what help is available in and out of work. A simpler system also helps speed up administration of housing payments, giving tenants more confidence when starting a job that any in work benefit will be paid quickly. A more transparent system may also improve the ability of individuals to move between areas and to take advantage of employment opportunities
To find out more about Local Housing Allowance, please see 'Read More'.
If you have any further questions about Local Housing Allowance then contact us. by:
By Telephone: 01454 86 8002
By Email: Localhousingallowance@southglos.gov.uk