A new system for paying benefit to private tenants is being introduced nationally in April 2008. Instead of deciding whether a rent for a particular property is reasonable, the household looking for property in a certain area will be awarded a certain amount of Local Housing Allowance (LHA) depending upon the size of the family. This amount may then be reduced depending on any other income the family has or who else lives with them. If the amount of LHA is higher than the rent, the excess can be kept by the family up to a value of £15 per week.
Direct payments to private landlords will cease under the new scheme other than for vulnerable tenants, or where eight weeks arrears exist. [See Housing Benefit Procedures]
Finally there are special rules for single tenants aged under 25. Housing Benefit will only pay an amount based on the average rent for a room in a shared house, even if the tenant is living in a self contained flat (this is called the single room rent). This does not apply to couples under 25 or families.
If a prospective tenant intends to claim Housing Benefit, both the landlord or the tenant can check the levels of Local Housing Allowance by looking it up on the internet, contacting their nearest public council office or contacting the council’s Benefits department. See Working with Local Authorities.
Councils usually pay benefit either by crediting the tenants bank account every two weeks or by paying the landlord every four weeks in arrears if the vulnerability safeguard is being applied.
Where a tenant is in receipt of Housing Benefit, and is more than eight weeks in arrears, the landlord can request the Housing Benefit be paid direct instead of to the tenant. The local authority should be contacted to arrange this.
Note: the arrears need not have existed fora calendar eight weeks. For example, if the contract requires payments per calendar month in advance, if two consecutive payments were missed, there would be more than eight weeks arrears after one month and one day.
Your local council will do its best to advise landlords, but all claims for benefit are confidential and information about your tenant’s claim is unlikely to be discussed with you unless they have given written permission for their claim to be discussed with the landlord.
It is sometimes difficult to work out exactly what the situation is regarding the tenants rent account if rent is payable monthly, but benefit is actually paid on a weekly basis. It is important to remember that the method of payment by the benefit office, and the assessment of benefit due, does not alter your tenants contractual obligations. It is a good idea to record the payments in the context of the rent payment dates, for example as in the example in the table below.
Here you will see that the tenant has not been making up the shortfall and their arrears will soon reach a level where he can be evicted under the serious rent arrears ground. Were you to do this, the court would require a schedule of arrears in this format. [See Housing Benefit Procedures]
A useful independent website offering information on the Local Housing Allowance can be found at: www.localhousingallowance.net
