April 2011 changes

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revsbens@worthing.gov.uk

Introduction

From 1 April 2011 there are six changes to the way that Housing Benefit is calculated for private tenants under the rules for Local Housing Allowance (LHA):

1. The maximum weekly LHA rates will be restricted
2. LHA rates will be reduced to a calculation known as the "thirtieth percentile"
3. The maximum number of bedrooms allowed under the size criteria will be reduced from five to four
4. An extra bedroom will be allowed for a non-resident overnight carer
5. Excess payments of up to £15 per week will end
6. The circumstances under which payments can be made to a landlord are being extended

All new claims received on or after 1 April 2011 will be subject to these changes from the start of entitlement.  Changes 1, 2 & 3 will not usually affect existing claims immediately because there will be transitional protection that lasts for nine months after the first anniversary date of the claim following 1 April 2011.  However, transitional protection will end if an existing customer changes address.

Please see the details below for a further explanation.

Maximum restrictions

1.  Maximum rates of LHA

The maximum weekly LHA rates will be restricted to

• £250 for a one-bedroom self-contained property
• £290 for a two property
• £340 for a three property
• £400 for a four property

The weekly LHA rates for Worthing are below these levels so this change will not affect Housing Benefit claims in the Worthing area.

30th percentile

2. Thirtieth percentile calculation

From April 2008 (when LHA was introduced) to March 2011 inclusive, LHA rates were calculated by reference to the "median" (or mid-point) of rents.  In effect, this meant that the rent charged for 5 out of 10 properties was at or below the LHA rate.

From April 2011, the LHA rates will be calculated by reference to the "thirtieth percentile" of rents.  In effect, this means that the rent charged for 3 out of 10 properties will be at or below the LHA rate and as a result the LHA rates (and therefore Housing Benefit awards) will be reduced.

Maximum number of bedrooms

3.  Maximum number of bedrooms

Customers entitled to five or more bedrooms (in accordance with the size criteria rules) will only have the four-bedroom rate of LHA used in their benefit calculation.

Extra bedroom for a carer

4.  Extra bedroom for a carer

Where a customer or their partner

• Needs overnight care that is provided by someone who does not normally live with them; and
• As a result, they have an extra bedroom in their property for their carer; and
• The carer regularly stays overnight

Then an additional bedroom will be allowed in the size criterion that's used to determine the rate of LHA that should be used in the Housing Benefit calculation.  The additional bedroom does not apply where another family member (e.g. a child or elderly relative) requires the care - it must be the Benefit claimant or their partner who receives the care.

This rule is also subject to the maximum size property of four bedrooms that is allowed under the LHA provisions.  If you or someone you know satisfies this rule, please contact the Benefits Department immediately.

Excess payments

5.  Excess payments

Prior to April 2011, if a customer's rent was less than the LHA rate that was used in their Housing Benefit calculation, the rent that was used in the Benefit calculation was their rent plus up to £15.00 per week.  This was known as an "excess payment".  From April 2011, there will be no excess payments used in the Housing Benefit calculation for new or change of address claims (i.e. the rent used will be the lower of the contractual rent or the LHA rate).

Existing customers will generally continue to have the excess payment included in their Benefit calculation until the anniversary date of their claim.  Thereafter, the rent used in the calculation will be the lower of the contractual rent or the new (anniversary) LHA rate and unlike points 1, 2 & 3 above, there will be no transitional protection for a further nine months.

Landlord payments

6.  Landlord payments

In addition to the existing circumstances, which are

• If the tenant is vulnerable in accordance with the safeguarding criteria; or
• The tenant has at least 8 weeks' rent arrears; or
• The landlord is receiving direct payments from the Department for Work & Pensions from the tenant's entitlement to an income-related Benefit; or
• The tenant has vacated the property leaving rent arrears

Housing Benefit can also be paid to the landlord where making such payments will assist the customer in securing or retaining the tenancy.

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