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What is Local Housing Allowance

Local Housing Allowance is a new way of working out new claims for Housing Benefit for tenants renting accommodation from a private landlord. It also affects tenants already getting Housing Benefit who move into accommodation rented from a private landlord. Local Housing Allowance is being introduced on 7 April, 2008. Local Housing Allowance will not affect people living in council accommodation or other social housing.

With Local Housing Allowance, benefit is not usually based on the property in which the tenant lives. It is based on:

In some cases the amount of benefit will be affected by other things. These can include:

There is no change to the entitlement rules for Housing Benefit – these will still be based on a person's income, savings and proof of rent etc.

Why is Local Housing Allowance being introduced?

Local Housing Allowance is being introduced to increase responsibility, place choice firmly in the hands of tenants and help develop the skills to make the transition into work. The objectives of introducing 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 Housing Benefit.

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.

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