Local Housing Allowance

1. Local Housing Allowance • NAWRA • 14th September 2007 • EDINBURGH • Nancy Fowler • Welfare Rights Officer City of Edinburgh Council Welfare Rights Service

2. Local Housing Allowance • Pilot introduced in UK on February 2004 (Welfare Reform Bill) • Edinburgh only Scottish area in Pilot of 12 authorities in UK • Argyll and Bute since April 2005 • National roll-out from April 2008 For Private tenants claiming Housing Benefit • Allowance depends on the area in which the claimant lives, and the number of people living in their home. • Non Dependant Deductions (NDD’s) apply as per Housing Benefit (HB) City of Edinburgh Council Welfare Rights Service

3. Housing Benefit or ‘Rent Rebate’ – Local Housing Allowance (LHA) • LHA is for private tenants on a low income • A ‘private tenant’ is someone who rents property or a room from a private landlord • LHA may not apply if the rent includes an amount for meals e.g. B+B accommodation. City of Edinburgh Council Welfare Rights Service

4. When is LHA not paid • Property is rented from the council • Landlord is a housing association • The rent has been registered as a ‘fair rent’ • The tenancy started before 1989 • Care, support and supervision is included in tenancy • Claimant lives in a caravan, mobile home or houseboat. City of Edinburgh Council Welfare Rights Service

5. How much LHA is paid? • Depends on; • The number of rooms needed • The area the property is in • Any income or savings claimant has (Means-Tested) • Whether claimant has a non-dependant living in the property (NDD’s same as for HB) City of Edinburgh Council Welfare Rights Service

6. How many rooms are allowed? • One BEDROOM for; • Every adult couple (married or unmarried) • Any other adult aged 16 or over • Any two children under age 10 • Any two children of the same sex under 16 • Any other child City of Edinburgh Council Welfare Rights Service

7. How many rooms are allowed? • Living Rooms; • One living room if one to three people live in the property • Two living rooms if four to six people live in the property • Three living rooms if seven or more live in the property City of Edinburgh Council Welfare Rights Service

8. Couples with no dependent children • Are awarded the rate for a two-roomed property if renting a ‘self-contained’ property • ‘Self-contained’ means at least one room plus a bathroom, toilet and cooking facilities that no one else uses • If sharing facilities then the shared LHA rate is paid City of Edinburgh Council Welfare Rights Service

9. 25+ and Live Alone • Can be paid the rate for a two-roomed property provided it is self contained with at least two rooms i. a one bed-roomed flat • If living in a property where all or some facilities are shared then shared LHA rate is paid City of Edinburgh Council Welfare Rights Service

10. Local Housing Allowance • Normally payments are made direct to the tenant • Transitional protection to ensure those already in receipt of benefit do not lose out • Pilots in Edinburgh and 8 other councils. Edinburgh is the Scottish council City of Edinburgh Council Welfare Rights Service

11. How does it work in practice? • Compared to the old system people will now know how much financial help they will get with their rent • If accommodation is cheaper than average then they can keep the difference • If accommodation is more expensive they have make up the difference City of Edinburgh Council Welfare Rights Service

12. Maximum Rent • This is the local Housing Allowance set by the rent officer for the ‘broad rental market area’ in which the tenant lives and for the size of the house they are entitled to • The maximum rent is updated monthly City of Edinburgh Council Welfare Rights Service

13. The eligible rent • Usually the maximum rent except • for those with transitional protection • where there has been a death in the house no reduction in eligible rent for a year • where no claim for HB in previous year eligible rent will be actual rent • For all of the above if tenant is better off with LHA based eligible rent then that will apply City of Edinburgh Council Welfare Rights Service

14. Maximum Benefit • Will be; • rate at time of claim (see current rate handouts) • The rate is fixed for twelve months and then updated annually City of Edinburgh Council Welfare Rights Service

15. Payment • In most cases rent is paid to tenant except; • pay first cheque to landlord to cover overdue rent • pay landlord if tenant has difficulty managing their own affairs • Pay the landlord if LA thinks claimant will not pay their rent • pay landlord if more than 8 weeks of arrears • any excess is paid to tenant City of Edinburgh Council Welfare Rights Service

16. Benefits? • Fairness: The new scheme has been designed to pay the same amount to tenants with similar circumstances living in the same area • Choice: The intention is to allow tenants to trade between the quality and the price of their accommodation • Transparency: The expectation is that the scheme will make it easier for tenants to find out in advance how much rent could be covered by the new scheme City of Edinburgh Council Welfare Rights Service

17. Benefits? • Personal Responsibility: It is hoped that by paying the allowance to the claimant it will encourage them to take responsibility for budgeting for and paying their rent themselves, rather than having it paid for them. • Increased work incentives: Greater certainty about what in work benefit they could receive is expected to help claimants bridge the gap between being unemployed and taking a job. • Simplicity: There will no longer be a need for the complex rent restrictions and individual referral of rents to rent officers. and private tenants on HB are in a position to shop around for cheaper accommodation City of Edinburgh Council Welfare Rights Service

18. Criticisms • The new scheme’s success at meeting its objectives hinges on some large assumptions: • that by using the standard allowance, the rent for a decent home in the private sector that meets a tenant’s needs will reflect the level of this allowance • that by publicising these allowances and simplifying the claim process, private landlords will be more inclined to let to HB claimants; City of Edinburgh Council Welfare Rights Service

19. Criticisms • The definition for determining the local reference rent will, as now, be crucial. • National research has shown that, under the current rules, private tenants face an average shortfall of £19 a week. • Limits tenants choice and may lead to a reduction in the number of landlords willing to let to claimants City of Edinburgh Council Welfare Rights Service

20. Changes from April 2008 • Capping the amount of LHA a claimant can receive over and above contractual rent – CAP to be set at £15. • Adjusting size criteria so it is based on bedrooms needed – no extra for additional living areas. • LHA will apply to new claims only from April 2008. • LHA rates will be based on median point of local rents rather than the mid point at present. City of Edinburgh Council Welfare Rights Service

21. 85-87 South Bridge Edinburgh EH1 1HN 0131 225 1255 Monday, Wednesday, Thursday 9.30 a.m. to 4.00 p.m. Tuesdays 10.00 a.m. to 4.00 p.m. (opens 11.00 a.m. first Tuesday of month) Fridays 9.30 a.m. to 3.30 p.m. City of Edinburgh Council Welfare Rights Service