Local Housing Allowance is Changing

As from April 2008, the Government is introducing the Local Housing Allowance in place of the Housing Benefit.

The way in which the benefit is calculated will also change. The Local Housing Allowance will only be available to those tenants who enter into private tenancies with landlords and will not be available to those tenants who have tenancies with the Council or Housing Associations.

Those tenants who are currently in receipt of Housing Benefit will continue to receive Housing Benefit and will only begin to receive Local Housing Allowance when they move house.

What are the differences?

Each month, the amount of Local Housing Allowance will be set dependent on the size of the property and will be based on the number of bedrooms.

The allowance that will be paid to a tenant is dependent upon how many bedrooms are needed to accommodate the family and not the level of rent that is being charged by a landlord.

This allowance should assist tenants as the allowance will be published locally so a tenant will be able to assess themselves how much Local Housing Allowance they are likely to receive prior to entering into tenancy agreements with their landlords.

Who will receive the allowance?

The main change for landlords is that the Local Housing Allowance will be paid directly to the tenant and the tenant is now responsible for paying the landlord directly. It is always suggested that a tenant sets up a bank account so the allowance will be paid directly into that account.

What to do if a tenant fails to pay the allowance to a landlord?

As there is a risk that some tenants may struggle with the responsibility of paying their rent, there will be measures put in place.

In Leeds, it has been decided that there will be pathfinder authorities who will have the discretion on deciding when to make payments directly to a landlord.

Examples of such cases would be if the tenant is having difficulty in managing their affairs due to vulnerability. Such vulnerable tenants would be those with learning disabilities or drugs and alcohol addiction.

Another scenario is where the landlord could receive the allowance directly, is when the tenants are unlikely to use the Local Housing Allowance to pay the rent and evidence of this is if the tenants have consistently failed to pay the rent in the past.

If the Local Housing Allowance has been backdated or there has been a delay in processing a tenants claim and a large amount of allowance is payable, the authority may decide to make the first payment by cheque directly to the landlord and subsequent payments will then go directly to the tenant.

A common scenario however would be if the tenant is more than 8 weeks in arrears and the landlord could then approach the Department for Work and Pensions and advise them of the current position and request payment of the allowance be made directly to them. If such a request is made by a landlord, documentary evidence showing the current position with regards to the rent arrears must also be produced.

If you require any further information with regards to the Local Housing Allowance or you are experiencing difficulties with your tenant please do not hesitate to contact Karen Hudson.