Benefit payments have changed

From 1^st April 2011, the rules have changed on how Local Housing Allowance (LHA) is calculated. If you are renting from a private sector landlord and are claiming housing benefit, the amount you receive is likely to be reduced.You will need to make up any shortfall from your other income or savings, or may have to consider moving to a more affordable home, or asking your landlord to reduce the rent.

If your claim for housing benefit (based on LHA) was made before April 2011, you will usually not be affected straight away. New rules will apply to new claims made after 1 April 2011 and further changes are expected in April 2012 and 2013.

For details of our current and previous LHA rates, please click on the links below:

Current LHA Rates.

Historic LHA Rates

Contents

• Changes from 1 April 2011
• Will I be affected by the changes?
• Do these changes affect council tenants, housing association tenants and owner-occupiers?
• When will the changes affect me?
• Will I have to move?
• What if I can’t pay the shortfall?
• Estimated Reductions in LHA rates (as at March 2011)

Changes from 1 April 2011

The changes below are based on changes to the law which took effect from 1st April 2011.

An end to ‘Excess’ payments

Under the current system, you can be paid Housing Benefit of up to £15 a week more than your rent and keep the difference. This happens only if your rent is lower than the appropriate Local Housing Allowance rate.

New rules coming into effect from 1 April will limit maximum Housing Benefit to the level of your rent.

• If you currently claim local housing allowance, your excess payment will end on the anniversary of your claim (or sooner if there is a change in your household circumstances).
  
• If you make a new claim from 1st April 2011, your claim will be assessed under the new rules.

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Only 30 percent of properties will be affordable

From 1 April 2011, maximum Local Housing Allowance rates will be reduced so that only three out of ten properties for rent in any area will be affordable for people claiming Housing Benefit.

This means that, unless your rent is already one of the lowest 30% in your area, the maximum LHA you can be paid will be less than your rent. If you want to avoid rent arrears, you will have to make up the difference.

• If you are already claiming Housing Benefit (based on LHA), this change will affect you up to nine months after the anniversary of your claim. During this period you will need to consider your options and seek advice. Unless you can make up any shortfall, you may have to consider moving somewhere more affordable.
  
• If you make a new claim from 1 April 2011, you will be affected straight away.

Each month the latest LHA rates can be found on our website. There is also a link to a bedroom calculator which you can use to work out how many bedrooms your household is entitled to and therefore which LHA rate applies.

This information is also on the valuation office agency website.

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Direct payments to landlords

The rules about when we can pay your Housing Benefit to your landlord have changed. From April 2011, as well as the existing rules, we can pay your landlord where they have reduced your rent, normally to the LHA level and this secures or retains your tenancy.

If you currently have your Housing Benefit paid directly to yourself and think that this change means you could have it paid to your landlord please contact us benefits@swrbss.org or telephone 01905 822744 to speak to a customer services advisor. 

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New caps on weekly local housing allowance rates

A national maximum weekly rate of Housing Benefit  has been introduced, based on the number of bedrooms your household qualifies for:

• £250 for a one bedroom property
  
• £290 for a two bedroom property
  
• £340 for a three bedroom property
  
• £400 for a four bedroom property.

These changes do not currently affect any properties in this area.

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LHA maximum now four bedrooms

This change will affect larger households. Local housing allowance rates currently include a maximum payment for up to 5 bedroom properties. From 1st April 2011, the rates will be limited to payments for a maximum of 4 bedrooms.

• If you receive the five bedroom rate before 1 April 2011, your benefit will be reduced up to nine months after the anniversary of your claim.
  
• If your circumstances change, eg your household becomes smaller, your benefit will be reassessed and the new rules will apply.
  
• If you make a new claim for LHA from 1 April 2011, the maximum you can be paid will be the four bedroom rate.

If you need a larger property, you can still look for properties with more than four bedrooms, or other rooms that can be used as bedrooms. However, your maximum Housing Benefit will be calculated based on the four bedroom rate in that area, so a shortfall is likely to develop unless the property is cheaper than usual for the area. If you get into rent arrears, you could lose your home.

The LHA Direct  website has a calculator which you can use to work out how many bedrooms your household is entitled to.

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Increased deductions from benefit if you have non-dependants

If you share your home with any adults who are not dependant on you – for example, adult sons or daughters, parents, relatives or friends, your benefit may be reduced – as it is assumed that they should pay something towards your rent, whether they actually do so or not.

This may affect you if you share your home with other adults unless they are:

• under-25 and claiming jobseeker’s allowance
• full-time students (while they are studying)
• pensioners claiming pension credit.

Non-dependant deductions have been increased from April 2011, and your benefit will be reduced as a result from April 2011. You will have to make up any shortfall.

You may need to ask these other adults in your home to contribute more towards your housing costs.

Please click on the link below for more information regarding non dependant deductions:

Non dependant deductions from benefit.

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Extra room allowed for disabled people who need overnight care

If you or your partner are disabled and you need a carer – who doesn’t normally live with you – to stay overnight, you may qualify for help towards paying for an extra bedroom. You will need to show that:

• you have the extra bedroom in your home available for the carer to use 
• care is required  
• care is provided.

Please tell us if you have an overnight carer, so that we can look at your claim again. If you are already getting Housing Benefit and qualify for this extra help, you will be entitled to it from April 2011.

This change will apply to all private tenants, including those which are not based on Local Housing Allowance rates.

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Will I be affected by the changes?

If you are renting from a private landlord and you made your claim for housing benefit at your current address on or after 7 April 2008, it is likely that you will be affected by these changes.

You will not be affected by the changes if all of the following apply:

• you made your claim before 7 April 2008, and
• you have not moved since, and
• there has been no break in your claim.

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Do these changes affect council tenants, housing association tenants and owner-occupiers?

NO, only Housing Benefit claims from tenants of private landlords are affected.

The only change that may affect you will be the increase in Non dependant deductions from benefit.

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When will these changes affect me?

Some changes may affect you from 1 April 2011, and others may be delayed.

If you make a new claim for Housing Benefit (based on LHA rates) from 1 April 2011, the changes will usually affect you from the date of your new claim.

If your circumstances change after 1 April 2011, so that you are entitled to housing benefit for a smaller home (for example someone in your family leaves home), the new rules will apply and your LHA will be reassessed at the lower rates.

Many of the changes will take effect on the anniversary of your claim, when your entitlement is reassessed. For example, if your claim was made on 2 May 2010, the anniversary will be 2 May 2011. This means the changes will not affect everyone at the same time.

In some cases, if you are worse off as a result, your Housing Benefit will be calculated on your pre-April 2011 rent level instead of using the new, lower levels straight away. This protection can last for up to nine months. After this, your Housing Benefit will be calculated under the new rules and your benefit may be reduced.

For example:

• If your claim was made in April 2010, the anniversary of your claim will be in April 2011. The reduction in your benefit resulting from the new rules could be delayed until nine months after this in January 2012.
• If your claim was made in March 2010, and reassessed in March 2011 under the old rules, it will be due for review under the new rules in March 2012. The reduction in your benefit resulting from the new rules could be delayed until nine months after this in December 2012.

After 1 April 2011, there will also be some protection for people whose family size increases, or in some circumstances where someone has died.

Details are provided below for when you are likely to be affected by the changes. This is just a guide – you may need to seek advice. Please contact us for more information.

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Will I have to move?

You could find that moving to a more affordable property may be the only way to ensure that your rent is affordable in the long-term. This may even mean moving to a different area of Malvern Hills.

Do not wait until you have rent arrears to look for cheaper properties.

Our Housing Advice team may be able to help you find somewhere suitable. 

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What if I can’t pay the shortfall?

These changes will reduce the amount of help you get towards your rent.

It may become difficult for you to make up the shortfall between the reduced amount of benefit you receive, and the rent you have to pay. It is likely that some private tenants will fall into rent arrears. If this happens to you, you will need to act quickly to avoid the risk of eviction. It may be possible to:

• talk to your landlord about reducing the rent
• apply for a discretionary housing payment to help make up the shortfall
• ask non-dependents to increase their contributions to the rent.

Our Housing Advice team may be able to help:

• negotiate with your landlord
• apply for a discretionary housing payment
• find somewhere more affordable.

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Estimated reduction in LHA Rates

Please note! There will no longer be a 5 Bedroom rate from April 2011. The maximum rate will be 4 bedroom.

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Contact Us

E-mail: benefits@swrbss.org

Telephone: 01905 822744

In person:  Visit us at one of our customer service centres at Malvern, Upton or Tenbury Wells.

More information on the LHA changes and on LHA rates in general at the Valuation Offices website:

Link to LHA Information provided by the Valuation Office