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Housing benefit in the private rented sector has been replaced by the Local Housing Allowance (LHA).  These changes affect how housing benefit is worked out and how it is paid.  

LHA only affects tenants in the mainstream privately rented sector who:

• make a new claim for housing benefit
• change address
• have a break in their housing benefit claim of at least one week.

If an existing tenant remains in a property and continues to claim housing benefit continuously, you will continue to be treated under the existing rules.

LHA means that the majority of tenants will be paid housing benefit directly and will not have the option to elect for benefit to be paid to your landlords.  It is your responsibility to pay the rent to your landlord.  There are, however, safeguards which are in place and you can read more about these over the coming months.

LHA makes it easier for tenants and landlords to find out in advance how much rent could be covered by way of housing benefit.  The amount of LHA still depends on your household income and capital  but the LHA figures  determine the rent that the benefit calculation is based upon, and represents the maximum that you could receive.

LHA is based on the rent levels for the area in which you want to live and on the number of people that live with you. There is no change to the entitlement rules as these are still be based on a person's income, saving and proof of rent etc. View the new rates now.

For more information, view our frequently asked questions below, or download the LHA guide for landlords (PDF 463KB) or our LHA guide for tenants (PDF 434KB)

Landlords frequently asked questions

1. What is Local Housing Allowance (LHA)?
2. When will LHA be introduced?
3. Why is LHA being introduced?
4. Who is not affected by LHA?
5. What about single people under 25 years?
6. Why are you removing a landlord's right to receive payment of housing benefit?
7. What safeguard exists for landlords?
8. How can I be sure that the council will put these safeguards into effect?
9. Isn't it likely that tenants may spend their housing benefit on other things?
10. How will you equip tenants to manage their own affairs?
11. Landlords may be reluctant to take housing benefit tenants. What will you do about the resulting homelessness?
12. Isn't it unreasonable to expect landlords to collect the rent every week or month?
13. If I receive direct payments under LHA, how long will they go on for?
14. How will the council know that my tenant has rent arrears of 8 weeks or more?
15. What appeal rights do I have against a payment decision?
16. How will the rent officer decide on the amounts for various sized properties?
17. Will I still need to make sure my tenant gets a pre tenancy determination?
18. Will I still get letters telling me my tenant's benefit has changed?
19. Where can I get more information about LHA?

  1. What is Local Housing Allowance (LHA)?
It is a new way of working out housing benefit.  The rent is based on the number of bedrooms the occupants are allowed depending on who lives there. The allowances are one bedroom each for:

• every adult couple
• any other adult aged 16 or over
• any 2 children of the same sex
• any 2 children regardless of sex under age 10
• any other child.

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 2. When will LHA be introduced?
From 7 April 2008. The changes will apply when someone moves house or has a break in their housing benefit claim so it will affect all your new tenants from then.  If an existing tenant has a break in their benefit claim, you may not necessarily be aware of that but the change to LHA will take effect once they reapply.

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 3. Why is LHA being introduced?

• 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 choose between the quality and price of their accommodation.
• Transparency – the expectation is that the scheme will make it easier for tenants and landlords to find out in advance how much rent could be covered by housing benefit.
• Personal responsibility – the aim of paying the allowance to the claimant is to encourage them to take responsibility for budgeting and paying their rent themselves.
• Increased work incentives – greater certainty about what in work benefit they will receive will make it easier for claimants to move from being out of work to taking a job.
• Simplicity – There will be no need for complex rent restrictions and individual referral of rents to the rent officer, which can contribute to delays in processing claims.

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  4. Who is not affected by LHA?

• Tenancies with registered social landlords (housing associations).
• Protected cases, such as supported housing.
• Social landlords, charities and voluntary organisations.
• Tenancies which are excluded from current rent restrictions.
• Tenancies in caravans, houseboats and hostels.
• Tenancies where a substantial part of the rent is for board and attendance, such as hotel accommodation.

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  5. What about single people under 25?
These claimants will be entitled to the standard rate for a room in  shared accommodation – this will however, be based on a more generous definition than the existing single room rent.

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  6. Why are you removing a landlord's right to receive payment of housing benefit?

There has never actually been a right in legislation for a landlord to receive housing benefit payments direct (unless a tenant has rent arrears of 8 weeks or more). There is a right for tenants to request this arrangement and it is the right that is being replaced. LHA will encourage tenants to take greater responsibility for managing their financial affairs and should equip people of working age with the skills they need when they move into work.

We will continue to provide landlords with information about claims as long as we have authorisation from the tenant to do so.

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  7. What safeguards exist for landlords?

There are a range of safeguards to protect the interests of tenants and landlords. For example, where the claimant is 8 weeks or more in arrears with their rent, we can make the first payment payable to the landlord. Payments can be made to the landlord where the claimant is deemed by the council to be 'vulnerable' (this means they are unable to manage their affairs or it is unlikely they will pay their rent.

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 8. How can I be sure that the council will put these safeguards into effect?

Guidance will be provided by the Department for Work and Pensions and we will be working closely with landlords, advice agencies, other council departments and the medical profession to make sure the necessary safeguards are implemented.

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 9.Isn't it likely that tenants may spend their housing benefit on other things?  

Many tenants in the private rented sector already receive their housing benefit themselves and regularly pay their rent on time. Where a tenant is moving from direct payments we will be making it clear to them what their responsibilities are and of the potential consequences of falling into rent arrears. There will be examples of some tenants misusing their housing benefit and where this becomes a habit we will make provision for the landlords to be paid direct provided we are satisfied that we have the necessary evidence to justify our decision.

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10. How will you equip tenants to manage their own affairs?  
A person's ability or willingness to manage their own affairs will vary. Our One Stop Shop advisers and the Citizens Advice Bureau will ensure that good money management advice is available to those who need it.

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11. Landlords may be reluctant to take housing benefit tenants. What will you do about the resulting homelessness?  
LHA has merits for both landlords and claimants and we hope that landlords will give the reforms a chance to work rather than decide not to let property to people on housing benefit.  The reforms are intented to create a more transparent system that will be simple for people to understand and for the council to administer.

The safeguards regarding direct payments will strike the right balance between protecting the interess of both landlord and tenant.  We do not see any need for landlords to feel vulnerable from letting to housing benefit tenants or for them to cease letting to housing benefit tenants.

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 12. Isn't it unreasonable to expect landlords to collect the rent every week or month?
In most cases we hope that landlords will not have to physically collect the rent. We want to encourage tenants to receive their LHA into a bank account and set up a direct debit or standing order arrangements to pay their rent in the same way as some other tenants.

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 13. If I receive direct payments under LHA, how long will they go on for?
Where the tenant is considered 'vulnerable' and there is no prospect of the situation changing, landlords can expect to receive direct payments indefinitely.  In cases where the vulnerability may be temporary or direct payments are being made because the claimant has more than 8 weeks rent arrears or did not pay the rent regularly, then we will encourage the claimant to seek money advice. The intention is that the claimant will be in a better position in the future to manage their own finances and you may no longer receive LHA payments direct.

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 14. How will the council know that my tenant has rent arrears of 8 weeks or more?
It will be up to you, the landlord, to tell us if they know that a claimant is having problems paying their rent (it is advisable to let us know before the arrears reach 8 weeks). It should be noted that we may not pay LHA direct to the landlord in every case where there are 8 weeks of arrears or more (for example, we may not pay the landlord direct if the claimant is witholding rent payments because of a dispute over repairs or maintenance).

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  15. What appeal rights do I have against a payment decision?
Appeal rights will not change as a result of the new scheme. You will not be able to appeal against the LHA rates set for the area or the council's decision to pay the tenant.

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  16. How will the rent officer decide on the amounts for various sized properties?
The rent service will identify broad market rental areas and as now, will gather evidence regarding rental levels in those areas. Knowsley will be treated as having three broad market rental areas and will therefore have three sets of LHA figures for Knowsley claimants, depending on the area where they live. View areas and rates.

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 17. Will I still need to make sure my tenant gets a pre tenancy determination?
No, these will no longer be issued. The details of the LHA amounts will be widely publicised each month in the local press, One Stop Shops and on the website so it will be clear to all landlords and tenants what the amount of LHA will be. This is the maximum amount which can be paid but it is still a means tested benefit so your tenant may get less.

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  18. Will I still get letters telling me my tenant's benefit has changed?
No.

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  19. Where can I get more information about LHA?
The Department for Work and Pensions website has information and we will keep you informed through quarterly newsletters and forums.

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