Housing benefit calculations to help tenants

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

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) 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."

LHA will apply to private sector tenants who make a new claim for benefit and for existing tenants who have moved address, on or after April 7th 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 9 authorities implemented the LHA in 2005 to test the efficiency of the scheme.

Under LHA rules, Housing Benefit isn't based on the property in which the tenant lives but on: who lives with the tenant, which area the property is in, how much money the tenant has coming in and 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.