11 October 2011

Changes to Local Housing Allowance from January 2012

Early int project

New Rules

The latest of the UK Government's welfare reforms comes into law from 1 January 2012.

This extends the 'shared accommodation rate' restriction on Local Housing Allowance - the form of Housing Benefit for tenants in the private rented sector - to claimants under the age of 35.

At present, in cases where a claimant is single, aged under 25, and has no dependent children, the category of property considered appropriate for them is a bedroom in shared accommodation.  The maximum eligible rent (for Local Housing Allowance purposes) is, therefore, restricted to the 'shared accommodation rate'.  This rate varies from month to month, but as an indication as at October 2011 the 'shared accommodation rate' for the city of Edinburgh is £65.77 per week.

In practice, this means that (as at October 2011) LHA will not cover rent costs above £65.77 per week for a claimant affected by the 'shared accommodation rate', which means the tenant either has to cover any additional costs out of their own resources - or try to find more affordable accommodation.

From January 2012, single people in the age range 25 - 34 years will be potentially brought within the scope of the 'shared accommodation rate'.  The City of Edinburgh Council projects that 800 people may eventually be affected by the change.

Transitional Protection

The extension of the shared accommodation rate to people aged under 35 will apply to all new, non-exempt, claimants from 1 January 2012.

For existing claimants, aged 25 to 34 years, the date from which they are affected will be:

  • If the claim was made after 1 April 2011, but before 1 January 2012, the change to the 'shared accommodation rate' will take place on the anniversary of the claim (i.e. sometime between 1 April 2012 and 31 December 2012)
  • If the claim was made before 1 April 2011 the change to the 'shared accommodation rate' will take place on the anniversary of the claim, or the date from which a change in circumstances requires the LHA rate to be reassessed.

Exemptions

The 'shared accommodation rate' will not apply to claimants where:

  • s/he is a care leaver (aged under 22);  or
  • s/he has non-dependents living with her/him, or are treated as living with her/him;  or
  • her/his applicable amount includes a Severe Disability Premium;  or
  • s/he needs overnight care from a non-resident carer.

From 1 January 2012, an additional two exemption categories are introduced for people in the 25 - 34 years age range:

  • s/he has spent at least 3 months in a homeless hostel and has accepted support to help resettle in the community;  or
  • s/he is an ex-offender who could pose a risk to the public if s/he live in shared accommodation

Options for those affected by the extension of the 'shared accommodation rate' to people under the age of 35 from January 2012

The reality of this restriction in Local Housing Allowance is that most singe people, under the age of 35, are unlikely to have all of their rent covered by Housing Benefit unless they are living in shared accommodation.

The options for those affected by this include:

  • Negotiate with landlord:  Some landlords may be prepared to negotiate a reduction in the rent charged to reflect the new restricted amount payable (although they do not have to do this).
  • Claim Discretionary Housing Payment:  The Government has increased the allocations of DHP available to local authorities to help deal with additional hardships which may arise from these changes.  However, the increased allocations are unlikely to cope with the potential increased demand.
  • Access debt/money/income maximisation advice around any shortfall in rent payments
  • Seek cheaper/more affordable accommodation (access housing options advice)

If you think that you may be affected by this change in the LHA rules, and would like some advice on your options, you can arrange to speak to an EHAP Housing Adviser.  Contact us on 0845 302 4607, or through the 'Contact Us' section of this website.

EHAP Partners are National Standards Accredited Advice Providers.

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