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