Coronavirus (COVID-19) and Housing Benefit/Housing Costs in the Private Rented Sector
From April 2020, Local Housing Allowance rates will be increased to the 30th percentile of market rents. This will apply to all private renters who are new or existing Universal Credit housing element claimants, and to existing Housing Benefit claimants. This means that additional financial assistance will automatically be awarded.
Local Housing Allowance
There is no difference to the entitlement rules, so your income and savings will still be taken in to account when calculating your Housing Benefit entitlement.
LHA was introduced to simplify the rules and to allow tenants more freedom - both financially and to choose where they live.
How Local Housing Allowance works
Local Housing Allowance is a flat rate allowance based on the size of your household and the area you live in.
Each local authority is divided in to Broad Rental Market Areas. Rent Officers then set individual LHA rates for each area.
Prospective tenants will be able to shop around with their allowance. If you find a property you like, but the rent exceeds you LHA you will need to make the difference up yourself.
If your landlord increases your rent, you will need to make up the difference yourself. LHA is based purely on your room requirement.
How Local Housing Allowance is paid
LHA is usually paid directly to the claimant, four-weekly in arrears. Payments will normally be made by BACS (direct transfer to your bank account), which will mean that there are no postal delays to worry about, and you don't have to wait for a cheque to clear. The money is available as soon as it arrives in the your bank account. You will then need to arrange to pay your landlord.
Safeguards for Landlords
The Council will not talk to the landlord about a claim unless the claimant has given written permission to do so.
However if a tenant is in arrears with their rent by 8 weeks or more the landlord has the right to ask for direct payments and in those circumstances the Council would confirm to the landlord the amount of benefit they are entitled to.
Direct payments can also be made to the landlord in cases where the tenant is deemed vulnerable, and so unable to manage their own affairs or when the tenant is deemed 'unlikely to pay' their rent due to a history of chronic rent arrears.