Local Housing Allowance (LHA) is the way housing benefit (HB) is applied to general needs rents in the private sector. It has established a maximum amount of HB payable within a defined “Broad Market Rental Area” (BRMA) for shared accommodation, one bed, two bed, three bed and four bed properties respectively. The maximum amount increases for each type of property. Each maximum amount is set at just below the average rent for each property type within the BRMA. If you claim HB under LHA, and your rent is higher than the maximum allowed for the property type you are eligible for, you have to pay the difference from other income.
The property type you are eligible for is not necessarily the type you have actually moved into. For example, if you are under 35, and not claiming Disability Living Allowance (DLA) or Personal Independence Payments (PIP), you are only entitled to the (lower) shared accommodation rate even if you are living in a one bedroom property. It is possible though to claim up to the (higher) two bed rate if you are living in shared accommodation but need a room available for the provision of overnight care.
The Government now wants to apply the same rates to Social Housing rents. Social Housing is accommodation provided by organisations registered with the Homes and Communities Agency (a funding and regulatory body). They are also known as Registered Providers (RPs).
RPs always try and keep rents as low as possible, but sometimes rents can be quite high because of the additional costs of buying, adapting and equipping property as well as providing additional services like furniture, white goods and gardening that disabled people often need. These costs and services are not covered by LHA, but can be covered (at the moment) in HB when the landlord is a Social Landlord.
Most supported housing is provided by Social Landlords as LHA was never specifically designed to work for disabled people who may need specialist housing. It was designed to meet basic provision for people with general needs.
The Government proposes to introduce LHA for Social Landlords for tenancies taken up after April 2016, but the new rates will not apply till April 2018.
If the proposal takes effect, it will become impossible to meet many disabled peoples essential housing costs. For this reason, many Social Housing providers are not developing new housing, as the risk is too high.
The Government have indicated that they will look at how the proposed changes will affect supported housing, and may protect this type of housing, but we do not know when any decision will be taken.
If you have any questions or comments, please contact Steve
Thank you
The H&SA Team