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Changes to Housing Benefit from April 2011 onwards

The Government is planning to introduce legislation in November 2010 which will make significant changes to the Local Housing Allowance rules from April and October 2011

What is Local Housing Allowance?

Local Housing Allowance is a mechanism which the Government uses to decide the maximum rent which can be considered in Housing Benefit assessments. It is a set figure based on the area where you live and the number of bedrooms you need.

Once applied the amount of Local Housing Allowance lasts for 12 months from the date you claim Housing Benefit, after 12 months your rate will be adjusted based on the new rates for that month. The Local Housing allowance rate will only change during these 12 months if there is a change in the number of bedrooms you need.

Will I be affected?

If you are a private tenant and have made a new claim, changed address, or have had a break in your claim since the 7th April 2008, then it is likely that your claim is calculated based on Local Housing Allowance, and these changes will affect you.

How will my Housing Benefit change?

Until the legislation is passed the Benefits Service cannot give you definite advice as to how your case may be affected, but the information below is based on the announcements made by the Government.

The changes from April 2011

If your Local Housing Allowance is due to change after the 1st April 2011 then you would be affected by the following changes:

  • The £15.00 weekly Local Housing Allowance excess payment will be abolished meaning that no claimant can ever receive more Housing Benefit than their actual rent.
  • The 5 bedroom Local Housing Allowance rate will be removed, meaning that the maximum Local Housing Allowance rate will be for 4 bedrooms.

If your Local Housing Allowance changes after April 2011 you will be limited to the Local Housing Allowance rate for a maximum of 4 bedrooms, even if due to household size you currently qualify for the 5 bedroom rate.

  • The Local Housing Allowance weekly rate capped, so the rate in any area can not exceed:

£250.00 for a one bedroom property

£290.00 for a two bedroom Property

£340.00 for a three bedroom Property

£400.00 for a four bedroom Property

Although the rules change on the 1st April 2011, you would not normally be affected until your Local Housing Allowance anniversary date, unless your Local Housing Allowance alters because of a change in the number of rooms your household requires.

Further changes from October 2011

  • From October 2011 the Government plans to change how Local Housing Allowance rates are calculated so that it is less generous for claimants.

Due to the way Local Housing Allowance is calculated you should currently be able to afford to rent approximately 50 out of every 100 properties in the local area.

But from October 2011 this calculation will be changed so that you can only afford 30 out of every 100 properties in the local area.

This may lead to a reduction in the amount of Housing Benefit you receive.

The Government intends to help disabled people who have a carer who needs to stay overnight but who doesn’t normally live with you, by allowing you an extra room.

If you are disabled and need a carer who does not normally live with you to stay overnight, you could qualify for an extra bedroom on your Local Housing Allowance rate. You must already have an extra bedroom in your home for the carer to use.

This applies to all private rented tenants on Housing Benefits even if you are not receiving Local Housing Allowance.

Key Questions and Answers:

I have been getting Housing Benefit without a break since before April 2008 could the changes affect me?

Providing you to continue to live in the same property and you don't have a break in your Housing Benefit claim the Local Housing Allowance arrangements will not apply to you.

If you are not sure whether the changes could affect you, please call Hackney Benefits Service on 020 8356 3399.

Will I be affected by the capping of LHA rates?

The caps are likely to affect people who are renting properties in central London boroughs including Hackney.

Some tenants in Hackney will find that their Housing Benefits is limited by the cap for Local Housing Allowance.

If your weekly rent is more than the cap for the Local Housing Allowance rate that applies to you, your Housing Benefit will be reduced, and you will need to make up any shortfall in your rent.

How do I know which Local Housing Allowance rate applies to me?

You can use the following information as a guide to work out how many bedrooms you are allowed. You are allowed on bedroom for:

  • Every adult couple (married or unmarried)
  • Any other adult aged 16 or over
  • Any two children of the same sex aged under 16
  • Any two children aged under 10
  • Any other child

Remember the maximum allowance is four bedrooms, for claims with a Local Housing Allowance anniversary date after 1 April 2011.

Different rules may apply if you are under 25 or live in shared accommodation. Contact the London Borough of Hackney for further information by calling 020 8356 3399 or by visiting: http://www.hackney.gov.uk/f-housing-benefits.htm

I need a property with more than four bedrooms. Will I only get benefit at the four bedroom rate?

The maximum Housing Benefit you get will be based on the four bedroom rate. You can still look for properties with more than four bedrooms, with rents that are within the four bedroom rate.

I am already getting Housing Benefit, when will I be affected by the changes?

If you are already getting Housing Benefit will not normally be affected until the anniversary of your claim. But if there is a change in your household such as someone leaving or someone moving in with you or if you more, the changes could apply sooner.

When is my anniversary date?

Once a Housing Benefit claim has been calculated the Local Housing Allowance rate is fixed for 12 months. This means that the Local Housing Allowance rate will be reviewed 12 months from the date you made your claim, on an ongoing basis.

However, if there has been a change in your circumstances that affects the number of rooms you require, a new Local Housing Allowance rate is applied. The anniversary date will then be every 12 months from the date of this change.

If you do not know when you Local Housing Allowance anniversary date is then contact us.

How will I know what the Local Housing Allowance rates will reduce to, from October 2011?

There is information available about the levels of Local Housing Allowance rate that might apply from 1st October 2011 based on current rent levels on the Valuation Office Agency website. You can go to the following website:

http://www.voa.gov.uk/lhadirect/lha-rates-england.htm

This information will give you an idea of the amount of rent that might be met by Housing Benefit from 1st October 2011, and the amount of the decrease.

The figures area estimates and will be updated regularly. Rent levels and rates may change between now and October 2011.

You also need to remember that in some areas, such as central London, Local Housing Allowance rates will also be restricted by the cap from 1st April 2011:

£250.00 for a one bedroom property
£290.00 for a two bedroom Property
£340.00 for a three bedroom Property
£400.00 for a four bedroom Property

The rent I am paying now is likely to be more than the Housing Benefit I will get when the changes come in. What should I do?

If you cannot afford to pay the difference between your Housing Benefit and your rent, you should first talk to your landlord about the changes and see if they will reduce the rent on your property.

If that isn’t possible, you could start looking to rent somewhere cheaper. You might want to talk about your situation with London Borough of Hackney Housing Advice and Options Team, Benefits Service of the Citizens Advice Bureau.

In certain circumstances if your housing benefit is not enough to cover your rent, you could apply for a Discretionary Housing Payment to help you meet the shortfall.

Any award is discretionary and would only be for a short period. Whether you are entitled would depend on your circumstances. The amount of money available for these payments is limited so money may only be awarded to the most deserving cases. If you want more information about Discretionary Housing Payments please give us a call on 020 8356 3399.

My Housing Benefit is paid directly to my landlord, what should I do if my Local Housing Allowance rate is reduced? How will I know that the amount paid to my landlord will still meet my rent?

Contact Hackney Benefits Service on 020 8356 3399 and we will give you advice. You might also find it helps to talk to your landlord about the changes.

My rent is less than the Local Housing Allowance, so I currently receive more Housing Benefit than my rental liability. How will the changes affect me?

When your Local Housing Allowance changes after April 2011, you will lose this excess payment, meaning that your Housing Benefit will be limited to your actual rent charge.

I think I will be due an increase in my Housing Benefit because I have a carer who stays overnight – who should I tell?

Make sure that Hackney Benefits Service knows you have an overnight carer, so that they can look at your Housing Benefit entitlement again. You must already have an extra bedroom in your home available for the carer to use before you get this help. If you are already getting Housing Benefit and meet the conditions for this extra help, you will be entitled to it from the date the legislation becomes effective.

What about extra rooms for other circumstances such as disabled children, couples that cannot share a room where extra space is needed for medical equipment?

The change only applies where the person making the Housing Benefit claim, or their partner, needs overnight care, and not in any other circumstances.

For more information please contact Zeta homes on 0208 514 2232.

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