Local housing allowance

Local housing allowance is a type of housing benefit that came into effect on 07 April 2008. If you've never claimed housing benefit before, you'll be assessed under the local housing allowance rules. You also have to claim under these rules if you're already getting housing benefit under different rules, but you:

  • Move address to another property rented from a private landlord (even if you have the same landlord)
  • Have a break in your housing benefit entitlement of a week or more

The local housing allowance doesn't apply to you if you rent your property from:

  • Shropshire Council
  • A landlord providing registered social housing

The local housing allowance rate that applies for the area in which you live depends on which broad rental market area (BRMA) you live in. There are four BRMAs covering the Shropshire Council area. These are:

  • Black Country
  • Shropshire
  • Staffordshire North
  • Worcester North

Each of these BRMAs have local housing allowance rates that show you the amount your housing benefit assessment will be based on, depending on the number of rooms you need. If you want to find out your local housing allowance rate you can check your area by postcode.

Information for customers

Working out your local housing allowance

To work out how much housing benefit you might get under local housing allowance, you need to:

  • Work out how many bedrooms you're entitled to
  • Check the local housing allowance for the area in which you want to live
  • Find out if you can get the full amount of benefit. The amount of benefit you can get may be affected by: any money you have coming in, any savings you have, how much your rent is, anyone living with you, or whether you share paying the rent with anyone else

You may find our example situations helpful when working out your entitlement.

What might affect my benefit payment?

Working out your local housing rate is just the first step in looking at whether you're eligible for help with your rent.

Income and capital

In order to work out if you qualify for housing benefit we look at what income and capital you have, and compare it to the amount of money the government states is necessary to meet your daily living costs. If you have more than this amount coming in we reduce the amount of your awards accordingly.

Non-dependants

Any adult aged 18 or over (except certain students) living with you and your partner (if you have one), may affect the amount of housing benefit you can get. This is because we may expect that person to pay towards the rent. Therefore we may need to reduce the housing benefit we pay by making a non-dependant deduction, as with the old housing benefit rules.

Find out more about how we work out your housing benefit and council tax support. 

How will my housing benefit for local housing allowance get paid?

Under the local housing allowance rules, you're unable to request that payment of housing benefit is made directly to your landlord. This is because tenants on housing benefit need to take greater responsibility for managing their affairs and paying their rent to their landlords (in the same way as other tenants do). We should therefore pay you direct.

However, you can have payments made direct to your landlord in order to secure or to keep a tenancy if your landlord makes it a condition of your tenancy that we pay any housing benefit directly to them. However, we must pay a landlord direct in situations where:

  • A tenant is more than eight weeks in arrears with their rent
  • A tenant is having deductions made from their income support or jobseeker's allowance to pay for rent arrears

We'll ask for proof of rent arrears before we amend payment of housing benefit to the landlord).

Information for landlords

Local housing allowance (LHA) is a type of housing benefit that came into effect on 7 April 2008.

It does not affect the following tenants:

  • A tenant of a registered social landlord (a housing association)
  • Someone whose tenancy started before 15 January 1989 (that is, a regulated tenancy)
  • A tenant of a caravan, houseboat or hostel
  • A tenant where the Valuation Office Agency has decided that a substantial amount of the rent is for board and attendance

If you already have a tenant who gets housing benefit under different rules, and they don't move address or have a break in their housing benefit of a week or more, they'll continue to be assessed on the old housing benefit rules prior to local housing allowance.

Working out local housing allowance

To work out how much housing benefit your tenant might get under local housing allowance, you need to do the following:

Housing benefit is means tested, ie the amount of benefit your tenant may receive will be affected by their circumstances. Find out more information about how housing benefit is worked out.

Payment of housing benefit for local housing allowance

Under the local housing allowance rules, a tenant is unable to request that payment of housing benefit is made directly to their landlord. This is because tenants on housing benefit need to take greater responsibility for managing their affairs and paying their rent to their landlords (in the same way as other tenants do). We should therefore pay your tenant direct.

However, payments can be made direct to a landlord in order to secure or to keep a tenancy if the landlord makes it a condition of the tenancy that we pay any housing benefit directly to them.

However, we must pay landlords direct in situations where:

  • A tenant is more than eight weeks in arrears with their rent
  • A tenant is having deductions made from their income support or jobseeker's allowance to pay for rent arrears

(We'll ask for proof of rent arrears before we amend payment of housing benefit to the landlord).

Please note, if you have any existing tenants being paid under the old housing benefit rules, you'll continue to receive these payments until their benefit switches over to the local housing allowance rules as a result of either them moving address or having a break in their housing benefit entitlement of a week or more. 

Positives of the scheme

We believe the local housing allowance scheme has the following positives for both landlords and tenants:

  • It's a more transparent system that's simpler to understand and administer. This is because the local housing allowance rates that we use in our assessments are available for all to see. It's not necessary to wait and see what the Valuation Office Agency says we should base our assessment on
  • Because payments are going to tenants in most cases, this removes the possibility of you being asked to repay large amounts in overpaid benefit. Under the local housing allowance scheme it's unlikely that we'd ask you to repay any money that your tenant has paid directly to you
  • We believe that the safeguard procedure regarding direct payment to landlords strikes the right balance in protecting the interests of both landlord and tenant

If you require more information on local housing allowance, please contact us.

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