Housing Benefit or Local Housing Allowance (LHA)
What is Housing Benefit?
Housing Benefit, a means tested social security benefit in UK, was launched with the intention to help those who stay in rented accommodation and have low income. It is the second biggest item in the Department for Work and Pensions Budget.
In the year 1982, it was transferred to the local authorities because it was felt back then that the local authorities have a better understanding of local rental market conditions than anybody else. So, if you are a tenant on a low income, housing benefit or Local Housing Allowance (LHA) will help you in reducing your rent and at times it also covers some of the service charges like lifts etc. There is as such no fixed amount of housing benefit and it might cover either a part of your house rent or all of it. How much you get as your share depends on lot of factors like from where have you rented your accommodation? If you have rented it privately or from a council? What is your household income? What are your circumstances? How many empty rooms do you have? etc. It is important to note here that the amount you get under Local Housing Allowance (LHA) depends on your income and circumstances and not on the rent of the property you are living in. your entitlement to housing benefit is also known as Local Housing Allowance.
There are various housing costs which are covered under housing benefits, such as:
- Fees for Lodgings
- Some Service Charges like Community Laundry Services, Lifts etc.
- Almhouse Contributions
What will you get under Housing Benefit / How much housing benefit you get?
Housing benefit amount depends on certain factors like how much do you earn, how and through which body you have rented your house/place of stay and your circumstances and how much you get as house benefit depends on the following:
- How much you are eligible for, i.e. eligible rent?
- How many spare bedrooms you have, if any?
- What is your total household income?
- What are your circumstances like age of people in the house etc.
Housing Benefit, although intends to help those who have to stay in a rented accommodation and are on low income, it does not has a fixed amount or a set amount applicable to all. This particular benefit is decided on case to case basis and considers factors like how much rent you have to pay, your income, your circumstances and how have you rented your house i.e. it has been rented privately or through a local council. With this benefit, you may or may not be able to cover all of your rent and other housing components. For example, charges like water charges, heating charges, lighting and cooking charges, payment of food and fuel are not covered under housing benefit scheme.
Is there any rent restriction applicable on the Housing Benefit?
Based on your personal income and your circumstances, you are eligible for a certain amount under housing benefit, also called as eligible rent, which may or may not cover your entire rent and the amount that you get could be lesser than the actual rent in case of a rent restriction. Rent restrictions and their nature play quite a vital role in deciding your amount of house benefit.
If You Have Rented Your Accommodation From A Council or A Local Housing:
In case you have rented your accommodation from a local authority or a private registered provider of social housing, the amount you get under housing benefit scheme will be your normal rent amount, excluding water charges, heating charges, fuel charges, certain service charges etc. The amount you get as a house benefit amount will get reduced in case have one or more empty or spare rooms in your house and this rule is normally referred as bedroom tax.
So, as per the bedroom tax, the reduction in your housing benefit amount could be up to:
- For having one spare bedroom, 14% of the eligible rent and
- For having more than one spare bedroom, 25% of the eligible rent.
For example, if your eligible rent is £200 per week and housing benefit pays £100 and you pay £100 and have 2 spare bedrooms. In this case, your eligible rent is reduced to 25% of the eligible rent so £25 will be deducted from the eligible rent and you will get £75 as housing benefit amount.
However, there are certain exceptions to bedroom tax rule under which your housing benefit will not be affected in case you have spared bedroom, such as:
- An approved foster carer which is between placements but only for up to52 weeks from the end of the last placement.
- A newly approved foster career for up to 52 weeks from its approval date, provided no child is placed with them for that time duration.
The housing benefit amount which you get in this case, i.e. if you have rented from a local housing, is also called as local housing allowance, which in other words, is a standard amount of maximum housing benefit, set according to your circumstances and place of stay. This is applicable only if you have started to claim your housing benefit from 7th April 2008. So, in case, you have rented a house for yourself whose rent is higher than the local housing allowance, then you have to either rent a property with lesser rent value or cater for the difference in the rent on your own.
In this case, your housing benefit amount will depend on the following factors:?
In this case, your housing benefit amount will depend on the following factors:
- Your place of stay i.e. where do you stay?
- Size of your house?
- Your income, including benefits, pensions and saving ( above £6,000) and
- Your circumstances.
|Size of Property||Housing Benefit (On Weekly Basis)|
|1 Bedroom||Up to £260.64|
|2 Bedrooms||Up to £302.33|
|3 Bedrooms||Up to £354.46|
|4 Bedrooms||Up to £417.02|
However, you need to contact your local council in case you are living in one of the following:
- A houseboat
- A caravan site
- A boarding home
- A hostel
- A Rent Act protected property.
What Is The Eligibility Criteria/Who Are Eligible for Housing Benefit or Local Housing Allowance (LHA)?
To claim or to be eligible for housing benefit, you need to fulfill certain requirement/criteria, such as:
- You pay rent for the place you live/stay in: In order to be eligible for housing benefit, you must pay rent for the place you are staying. You could have rented the place from either a housing association or local council or a private landlord. It doesn’t matters. What matters is that you are paying rent for that place. You are eligible for housing benefit if:
- You are staying in a hotel room or
- You are a boarder.
- You are sharing a room or a flat. In this case, you can claim housing benefit as a joint tenant.
- If you are staying as a couple with your partner. However, in this case, only one member can claim housing benefit
- If you are an UK Resident: It is easier for a UK resident to claim housing benefit as compared to someone who is staying overseas. It is better to consult an experienced adviser to understand your eligibility to claim housing benefit.
- If your savings are below £16,000: In case your savings are below a certain amount, i.e.£16,000 as per UK Government, you are eligible to claim housing benefit, provided you fulfil other criteria as well.
The amount of housing benefit gets reduced in case:
- In case you are a working adult and have savings or investments above £6000.
- In case you are a retired personnel and living in a foster/care home and have savings or investments above £10,000.
- If your income is low: Main idea to introduce the scheme of housing benefit was to help those who stay in rented accommodation and have low income.
However, in case there is a shift in your circumstances, you can update about the same to your council because change in your circumstances, whether for good or for bad, can affect your housing benefit account.
For Example: If there is a shift in your circumstances, like if you start working for more hours or have started earning more money, you housing benefits might reduce or in certain cases, might stop as well. So, in cases like this, it becomes imperative of you to contact your council and he might be able to help you with an extra 4 weeks of housing benefits, also called as Extended Payment of Housing Benefit. However, in cases like this, your council will check for your eligibility and contact you on his own.
Who Are Not Eligible for Housing Benefit or Local Housing Allowance (LHA) in UK?
There are certain sections which are not eligible for the housing benefit, such as:
- Your savings or investments are above £16,000, unless you are entitled for pension credit.
- You stay with your close relative.
- You are a full time student, unless you are disabled or have children.
- You are staying in UK as an European Economic Area Jobseeker.
- You are an asylum seeker or sponsored to be in UK.
- You are subject to immigration control and your granted leaves state that you cannot claim public funds.
What is Benefit Cap?
Benefit Cap is basically a limit on the total amount of benefits working people between age 16 to 64 can get. It was introduced to ensure that the people don’t get or claim more benefits than what a normal household earns.
It was in April 2013, limits were applied to your housing benefits, in case your total income (including all benefits) exceeds the following limits:
- £500 a week for a couple, with or without dependent children.
- £500 a week for a single parent with dependent children.
- £350 a week for a single person without children.
However, it was on 7th November 2016, two different caps were introduced in which one was for Greater London and the other one was applicable for the rest of the country.
Benefit Cap for Greater London is:
- £442.31 a week if you are a couple-with or without dependent children.
- £442.31 a week if you are a single parent with dependent children.
- £296.35 a week if you are a single person without children.
Benefit Cap for Outside of Greater London is:
- £384.62 a week if you are a couple-with or without dependent children.
- £384.62 a week if you are a single parent with dependent children.
- £257.69 a week if you are a single person without children.
There are certain benefits which are affected by the introduction of benefit cap, such as:
- Bereavement Allowance
- Child Benefit
- Child Tax Credit
- Employment and Support Allowance (unless you get the ‘support’ component)
- Housing Benefit
- Incapacity Benefit
- Income Support
- Jobseeker’s Allowance
- Maternity Allowance
- Severe Disablement Allowance
- Widowed Parent’s Allowance (or Widowed Mother’s Allowance or Widows Pension if you started getting it before 9 April 2001)
- Universal Credit (unless you’ve had a work capability assessment and aren’t fit for work)
However, there are benefits which are included or a part of benefit cap, such as:
- Armed Forces Compensation Scheme
- Armed Forces Independence Payment
- Attendance Allowance
- Carer’s Allowance
- Disability Living Allowance (DLA)
- Employment and Support Allowance (if you get the support component)
- Guardian’s Allowance
- Industrial Injuries Benefits (and equivalent payments as part of a War Disablement Pension or the Armed Forces Compensation Scheme)
- Personal Independence Payment (PIP)
- Universal Credit payments towards carer’s costs or for ‘limited capability for work and work-related activity’
- War pensions
- War Widow’s or War Widower’s Pension
Local Housing Allowance (LHA) or Housing Benefit Calculators
You can use an independent housing benefit calculator to know:
- what benefits you could get
- how to claim
- how your benefits will be affected if you start work
You can Use one of the following housing benefit calculators:
entitledto – this independent calculator help you instantly get the information on a range of income-related benefits as well as tax credits, contribution-based benefits, Council Tax Reduction, Carer’s Allowance, Universal Credit and more. Using “entitledto” calculator you can also find out how your benefits will be affected if you start work
Turn2us – It is another easy-to-use calculator that provides you information on various income-related benefits and more.
You’ll need to keep handy the following details:
- income, including your partner’s
- existing benefits and pensions
- outgoings (such as rent, mortgage, childcare payments)
- council tax bill
How to Claim Housing Benefit or Local Housing Allowance in UK ?
You can claim housing benefit at the same time in the same manner as you claim income support, employment and support allowance, income support or jobseeker’s allowance and can submit your claim form at the same time at your local JobCentre Plus. However, you will need to support your claim with proper evidence/supporting documents.
Claiming housing benefits needs proper documentation because you have to support your claims and for that you need to know certain details like:
- How much rent you pay?
- Charges excluded and included in your rent?
- How and from whom have you rented your flat?
Once have all the details as mentioned above, you need to support your claim with documents like:
- Current payslips. In case, you are paid on weekly basis, then you have to produce 5 recent payslips and in case you are paid on monthly basis, then you have to produce 2 recent payslips.
- Details/relevant documents of your other source of income, if any, like shares, ISAs etc.
- Your bank statements of last 2 months.
- In case you have any non-dependants who is staying with you, you might be asked to submit proof of their income as well.
- In case of contribution based jobseekers allowance, proof of your partner’s name and address will be required as well.
For proof of address and name, you can provide any 2 of the following documents:
- UK photocard driving licence
- Current passport
- Birth or marriage certificate
- Biometric residence permit
- Certificate of registration or naturalisation
- Permanent residence card
- Letter from HMRC or the Home Office
- Recent utility bill
- Recent bank or building society statement
- Recent benefit award statements
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