From April 2011 a number of changes will be introduced to the Local Housing Allowance (LHA) scheme.

The majority of Housing Benefit (HB) customers who are assessed under LHA arrangements will see a reduction in the amount of benefit they receive.

John Paul, The LHA Expert stated that there are three changes being introduced that will lower the levels of LHA that they pay in County Durham (for your geographical area you can go to https://lha-direct.voa.gov.uk/Secure/Default.aspx

•    the removal of the £15.00 top up
•    the setting of LHA rates at the 30th percentile
•    the removal of the 5 bedroom LHA rate

Customers affected by the last two changes will be given some transitional protection.

The key changes from April 2011 are:

LHA levels will be restricted to the 4 bedroom rate and a new upper limit will be introduced for each property size, with upper limits (capping) set at:

£250 a week for a 1 bedroom LHA rate

£290 a week for a 2 bedroom LHA rate

£340 a week for a 3 bedroom LHA rate

£400 a week for a 4 bedroom LHA rate (maximum)

  • Local Housing Allowance rates will reduce to a lower amount so that about 3 in 10 properties for rent in the area should be affordable to people on Housing Benefit rather than 5 in 10 properties as now. The new rates will be at what is know as the 30th Percentile.
  • The Government will end the maximum £15 weekly Housing Benefit excess that some people now receive. This means you will not be able get more money from Housing Benefit than you pay in rent.
  • Where you have an extra bedroom that is used by someone whilst providing necessary overnight care for you or your partner this can be included where the carer lives elsewhere. If you are unsure about whether this extra room allowance might apply speak to the Housing Benefit team in your local authority.

Please click here to download information outlining full details and how it could affect you.

How are you affected by these changes, does it change your cashflow?  Please do comment and let us know.