WIREDGOV

Local Housing Allowance goes live Nationally

DEPARTMENT FOR WORK AND PENSIONS News Release (EMP-074) issued by The Government News Network on 7 April 2008

A new way of calculating Housing Benefit will help tenants become more financially independent and put them on the road back to work, announced Minister for Employment and Welfare Reform Stephen Timms today.

Under the new system benefit will be paid directly to the customer to encourage them to take more personal control over their financial affairs by budgeting and paying rent directly to their landlords. There will also be safeguards in place for those tenants who need more support in managing their own budgets.

Launching the Local Housing Allowance (LHA) Stephen Timms, said:

'The LHA is a central part of the Government's wider programme of benefit reform. It's a radical change to the way Housing Benefit is paid in the private rented sector and will help people take action towards managing their own bank accounts, making it easier for them to move off benefits and in to work.

'Having a bank account means that people are job-ready and the LHA will help towards bringing increased responsibility to hundreds of thousands of people.

'We also want to see a Housing Benefit system that will ensure people in similar circumstances will receive the same amount of benefit as others in their area. I am confident that the success of the LHA in the first 18 authorities will be reflected as the scheme rolls out nationally.'

Local Housing Allowance (LHA) will apply to private sector tenants who make a new claim for benefit and for existing tenants who move address, on or after 7 April 2008. It applies to tenants in the de-regulated private rented sector only.

Designed to be simpler and to increase choice and responsibility for tenants, the LHA is a flat rate of Housing Benefit which varies according to the size of household and the area in which the customer lives.

The LHA has already been introduced in 18 local authorities. Nine pathfinder authorities introduced it in 2003/04 and these were subject to extensive and independent evaluation. A further nine authorities implemented the LHA in 2005 to test the efficiency of the scheme.

Notes to editors

1. More information can be found at http://www.dwp.gov.uk/lha

2. LHA has been tried and tested in 18 local authorities. The first 9 pathfinder authorities were subject to a comprehensive evaluation.

3. Under Local Housing Allowance rules, Housing Benefit is not based on the property in which the tenant lives. It is based on:
who lives with the tenant
which area the property is in
how much money the tenant has coming in
what savings the tenant has.
The Rent Service will calculate individual LHA rates for different sizes of property based on the number of bedrooms in each Broad Rental Market Area and the Local Authority will continue to be responsible for the final Housing Benefit calculation for each individual entitlement. Local Housing Allowance rates will be available from individual local authorities and will be published by the national rent services. LHA rates will be available from 31 March 2008 from
lha-direct.therentservice.gov.uk

4. The objectives of Local Housing Allowance are:
Fairness - to pay similar amounts to tenants with similar circumstances.
Choice - to allow tenants to choose between price and quality of accommodation.
Transparency - it is easier for tenants (before they commit themselves to a property) and landlords to find out how much rent could be covered by Local Housing Allowance.
Personal responsibility - making tenants take responsibility for budgeting for and paying their own rent.
Financial inclusion - to encourage tenants to have their housing payments paid into a bank account and set up a standing order to pay the rent to their landlord.
Improved administration and reduced barriers to work - a simpler system helps to speed up the administration of housing payments giving tenants more confidence when starting a job that any in-work benefit will be paid quickly.

Website http://www.dwp.gov.uk