New housing benefit (HB) rent restriction1 Reg 13C HB Regs; reg 13C HB(SPC) Regs
rules - the 'local housing allowance' (LHA) rules - are due to be introduced nationwide from 7 April 2008. Far from simplifying the HB rules, a new layer of complexity will be added. An additional difficulty is that, until 6 April 2009, there will be two versions of some of the Housing Benefit Regulations 2006 and the Housing Benefit (State Pension Credit) Regulations 2006.2 The amendments are made by the Housing Benefit (Local Housing Allowance and Information Sharing) Amendment Regulations 2007 SI No 2868, the Housing Benefit (State Pension Credit)(Local Housing Allowance and Information Sharing) Amendment Regulations 2007 SI No 2869 and the Housing Benefit (Local Housing Allowance, Miscellaneous and Consequential) Amendment Regulations 2007 SI No 2870. Some amendments to these are in the pipeline. The old versions continue to apply to a particular claimant until the first of specified events occurs, or if earlier, 6 April 2009: see reg 1(5)-(7) HB(LHA&IS)A Regs and reg 1(5)-(7) HB(SPC)(LHA&IS)A Regs. Carolyn George
sets out the detail.
Three rent restriction schemes
The amount of a claimant's HB can be restricted if s/he is a private tenant or the tenant of a housing association (or other registered social landlord). There will now be three sets of rent restriction rules: the 'LHA' rules, the 'local reference rent' rules and the 'pre-January 1996' rules.
The Government's intention is that, if a claimant's HB was being restricted under any of the rules that applied before 7 April 2008, it will continue to be restricted under the same rules, until there is a break in her/his claim or s/he moves to a new home while entitled to HB. From that point, HB will be restricted under whichever rules then apply. It is eventually intended to move claimants who are not in one of the excluded or exempt groups in the checklist below from the 'local reference rent' rules to the LHA rules. There is at present no final date by which all cases will transfer.
The LHA rules were piloted in 18 Pathfinder areas from late 2003. The new LHA rules will apply to those living in a former Pathfinder area to whom the pilot rules applied before 7 April 2008. The pilot rules were more generous in some respects than the new LHA rules. Some transitional protection is provided.3 Regs 12E-12K as inserted by Sch 10 para 6 HB Regs; regs 12E-12K as inserted by Sch 9 para 6 HB(SPC) Regs
New claim for HB or current HB claimant moves on or after 7 April 2008: Checklist
1. If HB is paid in the form of a 'rent rebate' (i.e., where the claimant is the tenant of the local authority who pays HB), the rent restriction rules do not apply at all.
2. Rent restriction rules potentially apply if HB is paid in the form of a 'rent allowance' - e.g. to private and housing association tenants - but not if the claimant has an 'excluded tenancy'. Excluded tenancies will be broadly the same as before 7 April 2008.
3. The 'pre-1996' rules apply if the claimant lives in 'exempt accommodation' or is an 'exempt claimant'. The rules will be broadly the same as before 7 April 2008.
4. The 'local reference rent' rules apply to claimants who live in a houseboat, mobile home, caravan or hostel or where rent includes board and attendance. They can also apply to the tenants of a registered social landlord (including a housing association). The rules will be broadly the same as before 7 April 2008.
5. The 'LHA' rules apply in all other cases.
Which LHA is appropriate
The LHA that is appropriate for a particular claimant depends on the area where s/he lives and the category of dwelling that applies to her/him. Local housing allowances for each category of dwelling are determined by the rent officer and are based on the median of local market rents for assured tenancies in the 'broad rental market area' in which the claimant lives.4 Sch 3B paras 2 and 4 Rent Officers (Housing Benefit Functions) Order 1997; Sch 3B paras 2 and 4 Rent Officers (Housing Benefit Functions)(Scotland) Order 1997
Local housing allowances will be determined monthly and made public, the intention being to enable prospective private sector tenants to anticipate what their HB entitlement will be, and to shop around for affordable rents. However, because of the complexities of the HB calculation, tenants will only actually know the highest amount their HB can be.
Categories of dwelling
Under the size criteria, a claimant is allowed one bedroom for each of the following occupiers: a couple, a person who is not a child (i.e. someone aged 16 or over), two children of the same sex, two children under 10, a child.5 Reg 13D(3) and (12) HB Regs; reg 13D(3) and (12) HB(SPC) Regs
An 'occupier' is anyone occupying the dwelling as a home (other than a joint tenant who is not a member of the claimant's household).
The appropriate LHA is that for:6 Reg 13D(2) HB Regs; reg 13D(2) HB(SPC) Regs
•one-bedroom shared accommodation if the claimant is:
--- a single claimant under 25. This does not apply if s/he qualifies for a severe disability premium as part of her/his applicable amount, has a non-dependant living with her/him or is under 22 and was formerly in care under specific provisions; or
--- allowed one bedroom under the size criteria (i.e. s/he is a single claimant or a member of a couple without children) and lives in shared accommodation. This does not apply if s/he (or her/his partner) qualifies for a severe disability premium as part of her/his applicable amount, or is under the age of 22 and was formerly in care under specific provisions. Someone counts as living in shared accommodation if s/he does not have the exclusive use of at least two rooms, or the exclusive use of at least one room as well as a bathroom and a toilet and a kitchen or facilities for cooking;
•one-bedroom self-contained accommodation if the claimant is allowed one bedroom under the size criteria (i.e., s/he is a single claimant or a member of a couple without children) and rents accommodation where s/he has the exclusive use of:
--- at least two rooms; or
--- one room as well as the exclusive use of a bathroom and a toilet, a kitchen or facilities for cooking.
'Room' means a bedroom or a 'room 'suitable for living in' (other than one shared with someone who is not a member of the claimant's household, a non-dependant or someone who pays rent to the claimant or her/his partner).
•In all other cases, the category of dwelling with the number of bedrooms allowed under the size criteria.
How much housing benefit
It is important to remember that the 'LHA' rules do not provide a new or different form of HB, although official guidance in some ways suggests this. The 'LHA' rules are a new system for rent restriction which determines the maximum HB a claimant can get. All other HB rules remain the same, and apply to claimants to whom the LHA rules apply in the same way as to any other claimant.7 In CH/2986/2005 (a decision concerning the pilot LHA rules), Commissioner Williams pointed out that the HB Regulations apply in full and the administration provisions applying to decision-making and appeals are the same as those applying to HB generally.
The amount of HB that is payable (whether rent restriction rules apply or not) depends on the claimant's applicable amount, income and capital, and on her/his 'maximum HB'. For full details of the calculation, see CPAG's Welfare Benefits and Tax Credits Handbook.
If the 'LHA' rules apply, 'maximum rent' for HB purposes (called 'maximum rent (LHA)' in the regulations) is the appropriate LHA for the claimant, or if lower, her/his 'cap rent' plus £15.8 Regs 12D(2)(a) and 13D)(1), (5) and (6) HB Regs; regs 12D(2)(a) and 13D(1), (5) and (6) HB(SPC) Regs
The 'cap rent' is the rent the claimant is liable (or treated as liable) to pay (apportioned if accommodation is shared).9 Reg 13D(12) HB Regs; reg 13D (12) HB(SPC) Regs
If HB exceeds the claimant's contractual rent, s/he can keep the difference.
'Maximum housing benefit' is the claimant's 'weekly eligible rent', minus deductions for any non-dependants.
If rent restriction rules apply, 'eligible rent' is usually the 'maximum rent' as calculated under those rules.
If rent restriction rules do not apply, 'eligible rent' is the contractual rent, minus ineligible charges (e.g. for fuel and some service charges).
Kyle, aged 28, is a joint tenant of a private flat with two friends. His share of the rent is £70 a week (£210 divided by 3).
The appropriate LHA is that for one-bedroom shared accommodation (£88). His 'cap rent' is £70. £70 + £15 = £85. So his 'maximum rent (LHA)' (and 'eligible rent') is £85 (cap rent + £15).
Kyle's 'maximum HB' is £85 (he has no non-dependants). He earns £150 a week after deductions of tax and national insurance contributions.
Kyle's applicable amount is £60.50 (2008/09 rate).
His income to be taken into account is £145 (disregard £5).
The difference between income and applicable amount is £84.50. 65 per cent of £84.50 is £54.92. Kyle's HB is therefore £85 - £54.92 = £30.08 a week.
Delay before a rent restriction is applied
A rent restriction can be delayed for:10 Reg 12D(3)-(8) HB Regs; reg 12D(3)-(8) HB(SPC) Regs
• 12 months if a member of the claimant's family (or a relative of the claimant or her/his partner who lived in the same accommodation) dies.
• 13 weeks if the claimant or a member of her/his family (or a relative of the claimant or her/his partner who lives in the same dwelling) could meet the costs of the dwelling when these were taken on, but only if neither the claimant nor her/his partner received HB in the 52 weeks before the current HB award.
How long an LHA applies
The 'maximum rent (LHA)' is based on the local housing allowance that is appropriate when the claim is assessed. HB is paid on the basis of this until the next time the local authority assesses the claim (usually annually), even if the allowance or the claimant's rent changes.11 Reg 12D(3)-(8) HB Regs; reg 12D(3)-(8) HB(SPC) Regs
When the local authority reassesses a claim, it uses the LHA that is then appropriate. Some changes of circumstance can lead to an earlier reassessment, e.g. if:12 Regs 13C(2)(d) and 13D(1) and (12) HB Regs; regs 13C(2)(d) and 13D(1 and (12)HB(SPC) Regs
• there is a change in the category of dwelling that applies to the claimant; or
• a member of the claimant's family (or a relative of the claimant or her/his partner who lives in the same accommodation) dies. In this case, any decrease can be delayed for a period; or
• the claimant moves to a new home.
Julie, aged 30, rents a four-bedroom house from a private landlord. She pays £205 a week rent. She lives there with her daughter and son, aged 11 and 14. The appropriate LHA is that for three-bedroom accommodation. When she claims HB, the LHA for three-bedroom accommodation is £150 and for four-bedroom accommodation is £190. Julie's 'maximum rent (LHA)' (and 'eligible rent') is £150. As she has no non-dependants, this is also her 'maximum HB'.
When Julie's mother comes to live with her, there is a change in the category of dwelling that applies (this is now that for four-bedroom accommodation), and the local authority reassesses her claim. The LHA for four-bedroom accommodation is now £200. So Julie's 'maximum rent' (and 'eligible rent') is £200. Julie now has a non-dependant, so her 'maximum HB' is £200, minus the appropriate deduction.
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