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What is Local Housing Allowance?

Local Housing Allowance is a new way of working out new claims for Housing Benefit for tenants renting accommodation from a private landlord. It also affects tenants already getting Housing Benefit who move into accommodation rented from a private landlord. Local Housing Allowance is being introduced on 7 April, 2008. If you live in Council accommodation or housing association accommodation, Local Housing Allowance will not affect you.

With Local Housing Allowance, your benefit is not usually based on the property you live in. It is usually based on:

  • who lives with you
  • which area you live in
  • how much money you have coming in
  • what savings you have. In some cases the amount of benefit you are entitled to will be affected by other things.
These can include:
  • how much your rent is
  • whether anyone living with you is expected to contribute to your rent.

Why is Local Housing Allowance better for me?

With Local Housing Allowance, you will know before you find somewhere to live, how much help with your rent you might get. By knowing how much you might get, it is easier for you to decide what type of property you can afford.

For details of how to work out how much Local Housing Allowance you may get, see our section on Working out your Local Housing Allowance. You can check the rates for the area you want to live in.

You can choose how to spend your benefit in a similar way to tenants who are not getting benefits. Like other tenants you will be able to choose whether to rent a larger property, or spend less on housing and increase how much money you have for other things. If you rent a cheaper property, the benefit that you can keep will not affect any other benefits that you get.

If you are looking for somewhere to rent you can choose to:

  • rent a property where the rent is the same as the Local Housing Allowance rate you are entitled to
  • pay more than the Local Housing Allowance rate you are entitled to and rent a more expensive property using other money you have coming in
  • pay less than the Local Housing Allowance rate you are entitled to and rent a less expensive home. In this case your Local Housing Allowance rate can be up to £15 more than your rent

The following examples show how this works. These examples are for tenants who are entitled to the maximum amount of benefit.

John's Local Housing Allowance rate is £65 a week. His rent is £60 a week. John gets benefit of £65 a week and can keep £5 a week to spend on other things.

Helen's Local Housing Allowance rate is £80 a week. Her rent is £90 a week. Helen gets benefit of £80 a week and has to pay the extra £10 a week from other money she has coming in.

Tony's Local Housing Allowance rate is £100 a week. His rent is £80 a week. Tony gets benefit of £95 a week and can keep £15 a week to spend on other things

How do I get paid my benefit?

With Local Housing Allowance, benefit is usually paid to you and not to your landlord. You cannot choose to have your benefit paid direct to your landlord. But we can pay benefit to your landlord if we decide that you are likely to have difficulty paying your rent.

See our section on Local Housing Allowance: tenants who are likely to have difficulty paying their rent for more details about this.

Usually you will have your benefit paid directly to you. It will be paid to you directly into your bank or building society account, if you have one, or by cheque.

If you do not already have a bank or building society account, you may want to set one up. That way you can arrange to pay the rent to your landlord automatically. This is called a standing order.

You can get advice about opening and running a bank account from any bank or building society. You can also get advice from your local Money Advice service

Paying your rent

As a tenant you are responsible for paying your rent to your landlord. If you do not pay the rent your landlord may apply to the Council to have it paid to them, or take other action to recover their money.

If you are in rent arrears your landlord may be able to go to the courts and ask that you be evicted from your home.

Eviction means that:

  • you will lose your home
  • your benefit may not be paid to you in the future
  • you may have difficulty finding new accommodation, as your landlord is unlikely to give you a reference
  • you will still have to pay the landlord the money you owe and possibly extra money to cover any court costs

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Last updated: 25 February 2016

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