What is Local Housing Allowance?
Local housing allowance (LHA) is used to work out how much housing benefit you can get if you rent your home from a private landlord.
LHA does not apply to council tenants, or those renting from a housing association.
Does local housing allowance apply to me?
Since 7 April 2008 all new housing benefit claims made by private tenants in Wales are assessed using the LHA rules. There are some exceptions. Even if you rent from a private landlord, you will not be assessed using the LHA rules if:
- you pay a registered ‘fair rent’ (eg you are a regulated tenant and your tenancy began before 15th January 1989)
- a substantial part of your rent is for board and attendance (such as in a hotel)
- you rent a hostel, caravan, mobile home or houseboat.
If you were already claiming housing benefit before 7 April 2008, your claim will begin to be assessed using the LHA rules when you either make a new claim, or change address.
How is local housing allowance calculated?
The local housing allowance (LHA) that you will receive depends on:
- how many bedrooms you need
- the number of people in your household
- the area in which you live
- the amount of your income and savings.
Number of bedrooms
The maximum number of bedrooms you are allowed under the LHA rules is 4.
You can still rent a larger house, but you will only get benefit up to the maximum level for 4 bedrooms. You will have to meet any shortfall in your rent, or apply for a discretionary housing payment to help you.
Number of people in your household
You are assessed as needing a bedroom for each of the following that you have in your household:
- adult couple
- other adult aged over 16 or over
- 2 children of the same sex up to the age of 16
- 2 children regardless of sex under the age of 10
- any other child
- a non resident carer if you are claiming middle or higher rate care DLA or attendance allowance
- member of a couple who can’t share a bedroom because of a disability
- a disabled child under 16 who can’t share a room because of their disability
- a child in the armed forces who is away on duty and who lived with you before they went away and intends to return.
An extra bedroom is allowed if you need one for a:
- foster child or children
- non-resident carer (or team of carers) who regularly stays overnight to provide care to you or another household member because of a disability
You can use the LHA Direct website to calculate the maximum number of bedrooms you are entitled to.
The area in which you live
LHA rates are also limited according to where you live. Rates are based on the cheapest 30 percent of properties in your area.
You can use the LHA Direct website to find out the maximum amounts allowed in different areas.
Under 35s and the Shared Accommodation Rate
If you are under 35, single and childless, you are generally only entitled to the standard rate for a single bedroom in shared accommodation (the ‘shared accommodation rate’). This is lower than the rate for a one bedroom property and applies even if you cannot find shared accommodation in your area and are living alone.
There are some circumstances where the shared accommodation rate does not apply even if you are under 35. These include:
- you are under the age of 22 and used to be in care,
- you are severely disabled,
- you share with another adult who is a member of your family (known as a non-dependant).
What does local housing allowance cover?
Local housing allowance payments can cover:
- your rent
- some service charges, if you have to pay them in order to live in the property.
It cannot cover charges for heating, hot water, lighting, laundry or cooking.
What if local housing allowance doesn’t cover my rent?
If you are struggling to pay a shortfall between the housing benefit you receive under the LHA rules and the amount of your rent, you should get advice. Your options may include:
- applying for a discretionary housing payment
- moving somewhere cheaper
- negotiating a cheaper rent with your landlord in return for direct payments.
Who receives the housing benefit under the local housing allowance scheme?
In most cases, local housing allowance (LHA) is paid directly to the person who claims it.
However, in certain circumstances the council can make the payments direct to your landlord:
- if you have rent arrears of eight weeks or more
- if you are already getting deductions from your income support, jobseekers’ allowance or employment support allowance to pay for rent arrears.
The council can also decide to pay your LHA direct to your landlord if they believe you:
- are likely to have problems managing your financial affairs due to you having a learning disorder or having a drug and alcohol problem
- are unlikely to pay your rent and are aware that you have consistently failed to pay rent in the past, without good reason
- won’t be able to obtain or keep a tenancy if it is not paid direct to the landlord.