Frequently Asked Questions

What is Local Housing Allowance (LHA)?

LHA will be introduced on 7 April 2008. It is a new way of working out housing benefit for tenants who rent from a private landlord. It will apply to new claims or changes of address made on or after 7 April 2008.

Customers will receive an LHA based on the area in which they live and the number of occupiers in their property. If they choose to occupy a property where the rent is lower than the LHA, the customer will receive HB based on the full rent PLUS any excess up to the level of the LHA (subject to a £15 per week cap).

For example if your LHA is £100 per week and you occupy a property where the rent is £80 per week you will receive £95 per week i.e. your full rent plus the £15 excess you are entitled to.

As with HB, LHA will be subject to a means test so not everyone will be entitled to the full LHA rate. Payments will normally be made to the tenant rather than the landlord.

Why is it being introduced?

Housing Benefit (HB) has long been criticised as an extremely complex benefit that does little to promote personal responsibility and can act as a barrier to work. Reform is needed to simplify HB and ensure it supports the Government’s wider objectives. LHA is the central element of the HB reform programme.

When is it being introduced?

The scheme begins on 7 April 2008 for tenants who are renting private sector accommodation (but not Housing Associations) who

• Make a brand new claim for Housing Benefit on, or after, 7 April 2008
• Change address to a private rented tenancy on, or after, 7 April 2008, or
• Reclaim benefit for a private tenancy after a break in their claim on, or after, 7 April 2008
• Anyone who currently rents private sector accommodation will not come under these new rules until they have one of the changes described above

Who is excluded from LHA?

The following are excluded from LHA

• Council tenants
• Housing association tenants
• Tenants in supported housing
• Crown tenants
• Private tenants whose tenancy began before 15 January 1989
• Tenants who live in caravans, houseboats or hostels
• Tenants in certain board and lodge accommodation (i.e. where the rent officer judges that a substantial part of the rent is attributable to board and attendance)

How does LHA work?

LHA is based on size criteria and Broad Rental Market Areas (BRMAs). Different LHA rates will apply in different areas. Within those areas, they will be based on the median rent – that’s the half way point between the most expensive and least expensive rent charged by landlords for a property big enough to meet your needs within that area charged by landlords in the private sector for properties of various sizes.

What is a Broad Rental Market Area?

A BRMA is the name given to a locality made up of areas of residential accommodation that allow those living there reasonable access to facilities for health, education, recreation, personal banking and shopping. In Southwark the entire borough is part of a single BRMA. What this means is that the LHA rates in Southwark are the same wherever you live in the borough.

What are the size criteria?

This is based on the number of bedrooms that the customer is allowed, which in turn is dependent upon the size of the household.

Who is not counted as part of the household?

The following are not treated as being part of the customer’s household

• Foster children
• An estranged partner who visits regularly
• Children who stay for weekends only (e.g. when a couple have separated)

How many bedrooms are allowed?

• One for each adult couple
• One for any other adult aged 16 or over
• One for any two children under 16 of the same sex
• One for any two children under 10 irrespective of gender
• One for any other child

Single customers aged under 25 years, i.e. young individuals, who do not have a non-dependant living with them will be entitled to the standard rate for a room in shared accommodation. This new shared rate will be based on properties where, while the tenant has a room or bedsit of their own, all or some of the facilities are shared, e.g. kitchen or facilities for cooking, bathroom and toilet, and a room suitable for living in. This does not apply to under 25s who have the severe disability premium in their benefit assessment.

Only someone who is a young individual is subject to the shared room rate restriction. A care leaver under 22 is not a 'young individual' which means that they come under the normal size criteria. Once they reach 22 this is a change that affects the category of dwelling and they will now fall within the size criteria for a single person under 25 (unless they have a partner, child or non-dependant).

Single customers aged 25 years and over, and couples with no dependent children, will be entitled to the rate for a one bedroomed property, e.g. a one bedroom flat or studio or other kind of self-contained accommodation, provided they actually rent a property of at least this size.

How are joint tenants treated?

Joint tenants will get LHA based on the customer’s family, plus any non-dependants etc.

Single joint tenants will get the shared room rate

Joint tenants who share a non-dependant will be allowed the two room rate each.

What if the rent is more than the LHA?

The HB calculation will be limited to the level of the LHA.

What if the rent is less than the LHA?

HB will be based on the lower of

• the appropriate LHA, or
• the contractual rent PLUS £15.00

Example 1

HB will be based on £115 per week (i.e. rent PLUS £15)

Example 2

HB will be based on £120 per week (i.e. the LHA amount)

How is the excess treated?

Any excess LHA is disregarded as income in the assessment of

• IS, JSAIB and pension credit
• Tax credits
• Child support payments
• HB or CTB

What about Service Charges?

Under the LHA no consideration will have to be made of service charges. Tenants will simply receive up to the maximum applicable LHA rate, and will then be able to exercise their discretion about whether or not they would prefer to pay a higher rate for accommodation that includes additional services.

What about rent increases?

The LHA rate in payments will be reviewed annually. Any mid-year rent increases will not be taken into account.

When are the LHA rates reviewed?

The rent service will review the LHA rates every month. They will be published at the end of the month before they come into force – e.g. the rates for April will be published at the end of March.

Where are the rates publicised?

At your local One Stop Shop.

How will LHA be paid?

Normally, payment will be made to customers. However, to avoid circumstances where the customer might risk losing their home, payments may be made to the landlord when the customer is

• In arrears of 8 weeks or more
• Unlikely to pay their rent
• Deemed unable to manage their own affairs

Why is LHA paid to the customer rather than the landlord?

The Government wishes to move away from the current HB system where most customers have their benefit paid directly to their landlord which means that they have no personal responsibility for their rent and many are unaware of how much rent is actually paid on their behalf.

By paying LHA direct to the customer it ensures they take on the personal responsibility of paying the rent to the landlord and helps develop the budgeting skills unemployed people will need when they move into the workplace.

It also plays a part in the wider cross Government strategy of greater financial inclusion. The Government also believes that wherever possible LHA should be paid to customers, as is the case for most other benefits and tax credits.

Can benefit be paid to the landlord if the tenant has rent arrears?

Direct payments can be made to the landlord when the tenant has arrears equivalent to eight weeks or more rent. The only exception would be where this would not be in the overriding interests of the customer.

Landlords should keep accurate rent records and report missed payments immediately.

In most cases, payments will revert back to the customer once the level of arrears has dropped below eight weeks.

Can the excess be used towards clearing the rent arrears?

Yes, if the LA decides this is appropriate.

What if the tenant has difficulty managing his or her own affairs?

The LA has a safeguard policy to ensure that any vulnerability issues are taken into account when deciding whom to pay. In most cases, some evidence of vulnerability will be required, but if this is established then payments will be made to the landlord.

Can payments be made to the landlord whilst the LA is investigating the customer’s vulnerability?

Yes, regulations allow direct payments to landlords for up to eight weeks whilst vulnerability is being investigated.

What if the customer doesn’t have a bank account?

Where a customer has no bank account, the LA won’t automatically class as vulnerable. Every effort will be made, both in the run up to the implementation of LHA and beyond, to encourage, advise and assist customers to open bank accounts.

Where, at the point of making a claim, a customer indicates that they do not have a bank account, then information and advice on opening an account will be provided. In these circumstances, in order to minimise any delay in paying benefit, payments may be made to the landlord. Once the customer advises the LA that a bank account has been opened, payments will revert back to the customer.

If payments are being made to the landlord, how will any excess payments be made?

Any excess benefit above the actual rent must be paid to the customer, unless the excess is being used to clear rent arrears. In this case, the excess can be paid to the landlord until the arrears fall below eight weeks rent.

Can the decision about the customer’s vulnerability be appealed against?

Yes, by both customer and landlord.

Can the LHA rates in each BRMA be appealed against?

No, because an appeal would call into question the level set for the whole area, thus undermining the transparency of the scheme for other customers.

Contact us

By telephone

020 7525 1880 - housing and council tax benefit
020 7525 1850 - council tax

By post

Council tax section
London Borough Of Southwark
P.O. Box 782
Bromley
BR1 3YE

Please indicate which department your query is for.

In person

Bermondsey One Stop Shop
Spa Road
Bermondsey
SE16 3QN

Peckham One Stop Shop
Ground Floor
Peckham Library
122 Peckham Hill Street
SE15 5JR

Walworth One Stop Shop
151 Walworth Road
London
SE17 1RY

Dulwich Area Housing Office
41-43 East Dulwich Road
Dulwich
SE22 9BY

All one stop shops are open from Monday to Friday, 9am to 5pm. In addition, Peckham one stop shop is open on Saturday, 9am to 1pm.

By email

Housing/council tax benefit: souhousingbenefitsuk@liberata.com
Council tax: Soucounciltaxuk@Liberata.com