Local Housing Allowance Cap
The Government has announced that for new tenancies from April 2016, housing benefit will be capped to a new rate called the Local Housing Allowance (LHA). This rate is already in place for recipients of housing benefit who live in private rented accommodation. This is a Government decision and not one made by RBH.
Who is affected and what does it mean?
These changes only apply to anyone who has taken out a new tenancy with RBH on or after 1st April 2016, and those who take out a new tenancy in future. The cap will come into place on 1st April 2018 when housing benefit will be reduced. Existing claimants and tenants are not affected unless you chose to take out a new tenancy after 1st April 2016 or do so in the future.
The Local Housing Allowance is based on "bedroom need" and not how many bedrooms are in your home. The rate of LHA is different depending on where you live - there are different rates for Rochdale, Heywood and Middleton. If you are affected by the cap and your rent is higher than the Local Housing Allowance, you will need to pay the difference in rent.
If you are single and under 35, with no dependant children, you will only be entitled to the "shared rate". This is much lower than the LHA or current housing benefit, and you will likely need to share with others.
What are the rates?
Local Housing Allowances rates will stay the same for the next four years. As our rents will decrease by 1% each year for the next four years, the difference in any shortfall will reduce. Use the Council's Local Housing Allowance calculator to find out the rate in your area.
If a new tenant is subject to the under-occupancy charge (or "bedroom tax") and the difference is higher than with the LHA then they will continue to be subject to this charge. If the LHA difference is higher then this will apply - but not both.
Is anyone exempt?
New tenancies in supported housing or sheltered accommodation will not be affected unless the move takes place after 1st April 2017.
Any long-term exemptions will be the same as in the private sector.
There are a number of exemptions from the shared rate for under 35s. These include couples or those with dependent children, foster carers, those in need of a second bedroom for medical reasons, those in receipt of Disability Living Allowance, Personal Independence Payments or carers allowance, those over 25 who have lived in homeless accommodation for over 13 weeks and have agreed to receive support, and former looked-after children aged 18-21.
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