Housing Benefit

Housing benefit provides a state-funded rent allowance to many millions of tenants in both the public and private rented housing sectors. Housing benefit is an allowance paid to the tenant and legally required to be used by them for a specific purpose.

The original housing benefit scheme was introduced in the early 1980s, and was most recently revised by the Housing Benefit Regulations 2006.  The scheme is intended to help those on low income by paying all or some of the rent or charges for the dwelling that is normally occupied as their home. It is provided by central Government and administered locally.

Eligibility

A person will be eligible to apply for housing benefit where:

• they are liable to pay charges in respect of their home (there need not be a written tenancy agreement but their liability to pay must be legally enforceable),
• they are on a low income (normally because they are unemployed), an
• their savings and capital assets are not worth more than £16, 000

The person who is liable for the rent, the tenant, is normally the person who must apply to their local authority for housing benefit. Some people may not be entitled to housing benefit even if their income is low enough to qualify, such as where the claimant lives with their landlord who is a close relative or where the tenancy is not conducted on a commercial basis.

All housing benefit claims must be made in writing, and the date that the local authority receives the written claim will determine the date from which the benefit is payable. However, claims that do not contain all of the information required will be treated as incomplete/defective claims, and may cause delay to the receipt of benefit payments. It is advisable that tenants of privately rented property apply directly to the local authority for housing benefit, rather than alongside an application for income support or jobseeker’s allowance, as this ensures that all of the required information is provided. Delays in reaching a decision as to the payment of any other type of benefit would result in delays in the decision whether housing benefit is paid.

Housing benefit claims can be backdated for a maximum of 3 months for people who have reached the qualifying age for a state pension, and for a maximum of 6 months for working age claimants. This will only apply where the claimant can show that they had continuous good cause for not making a claim, such as continuous illness (and they did not have anyone else able to make a claim on their behalf).

Local Housing Allowance

In April 2008 a new scheme system for working out housing benefit entitlements for tenants renting accommodation from a private landlord was implemented, in order to provide a fairer and simpler system.
The housing allowance that is payable within the same local area has been standardised, as under the previous system tenants with similar housing needs received different rent levels within the same area. Accommodation was also often of differing standards depending on its size or quality.
However, the new local housing allowance (LHA) system does not affect tenants who rent from a local authority or a registered social landlord.

There are two main differences between the LHA and the previous system of Rent Allowance (RA):
Firstly, the LHA system simplifies the calculation of the rent payable, by simply looking at the size of the household to be accommodated and giving a fixed amount regardless of the property they rent.
The amount of LHA that a claimant can receive will depend on:

• the area in which the claimant lives
• the number of people who live in the claimant’s family
• the claimant’s financial circumstances (including income, savings etc.)

The previous system involved assessing each property individually and calculating the rent payable according to a complex set of rent levels.

Secondly, under the LHA system, the housing benefit is normally paid straight to the claimant. There is no facility to pay it directly to the landlord or agent just because they request this. Direct payments to the landlord are available at the discretion of the local authority.

To allow an orderly transition between the new LHA system and claimants under the previous RA system, the two will initially operate in parallel.
The new LHA system will apply to:

• any private tenant making a new claim for housing benefit on or after April 7th 2008
• any change of address claim on or after April 7th 2008
• any claim where there is a break in entitlement of a week or more on or after April 7th 2008

The previous RA system will continue to apply to:

• tenancies which started before 1989, or where rent is registered as a ‘fair rent’
• tenancies and occupiers of caravans, house boats or hostels
• tenancies where a substantial part of the rent is payment for meals, board and attendance (e.g. bed and breakfast type lodgings)

The principal legislation governing housing benefit is:

• The Social Security Administration Act 1992
• The Social Security Contributions and Benefit Act 1992
• The Child Support, Pensions and Social Security Act 2000
• The Housing Benefit (Decision Making and Appeals) Regulations 2001
• The Housing Benefit (General) Regulations 2006

The main bulk of the legislation affecting landlords and agents is contained in the Housing Benefit Regulations 2006. These have been amended by the Housing Benefit (Local Housing Allowance and Information Sharing) Amendment Regulations 2007.