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Changes to Housing Benefit from 01 April 2011

The Government has introduced changes to Housing Benefit from 01 April 2011.  Hastings Borough Council is currently implementing these changes although some areas are still to be clarified.

The changes will mainly affect tenants who rent a property from a private landlord and receive Housing Benefit based on the Local Housing Allowance (LHA).  These changes may mean that the amount of Housing Benefit your tenants receive may go down from 01 April 2011.

We have updated the Housing Benefit pages to include the changes and would recommend that landlords frequently visit the site as the situation is constantly changing.  You can also get more information at www.direct.gov.uk and www.voa.gov.uk.

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What is changing from 01 April 2011?

The main changes relate to LHA as follows:

1. LHA rates will be reduced to a lower amount, so that about 3 in 10 (30th percentile) properties for rent in the area will be deemed affordable to people on Housing Benefit.  At the moment about 5 in 10 properties (50th percentile) in each area are deemed affordable to people receiving Housing Benefit
2. There will no longer be a 5 bedroom LHA rate
3. Currently a tenant can receive up to £15 per week more in Housing Benefit than their rent charge but this is being stopped
4. The LHA size criteria can be adjusted to allow for someone who is not resident at the property but who stays overnight to provide care for a disabled person or a disabled partner

The changes are intended by the Government to reduce rents in the private sector.

To support this, we will be given more discretion to pay Housing Benefit directly to the landlord, but we can only consider doing this in very specific circumstances where the landlord is prepared to reduce rents to a level that is affordable for the tenant ' usually around the Local Housing Allowance rate.  This is intended as a short term solution pending the introduction of Universal Credit.

Non-dependant deductions

The Government has increased non-dependant deductions by approx 27% from 01 April 2011.  The increase in non-dependant deductions will affect the amount of benefit awarded if your tenant has non-dependants living with them.

Typically, non-dependants are children aged 18 or over, elderly relatives or friends.  Different levels of deduction apply depending on the circumstances of the non-dependant.  The deductions range from £9.40 to £60.60 a week depending on the non-dependants circumstances.  Please note that the April changes to the rate of non-dependant deductions apply to all tenants receiving Housing Benefit including Housing Association tenants.

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When will these changes affect your tenants?

With regard to the changes in LHA rates (based on the 30th percentile) your tenant's benefit may be affected when we review their claim after 01 April 2011.  This will depend on their LHA annual anniversary date which is usually based on the date when your tenant made their original claim.  The Government has provided a 9 month Transitional Protection from the LHA anniversary date before the Housing Benefit entitlement is affected by the new 30th percentile LHA rate.

We will write to the tenant and you (if benefit is being paid direct to you) in advance of their anniversary date telling you how and when the benefit will be affected.

Important: if your tenant is making a new claim for Housing Benefit, moving home, or they have a change in the number of people in their household on or after 01 April 2011, the changes will apply sooner.

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What do you need to do?

You should talk to your tenant about these changes if:

• Your tenant is already receiving Housing Benefit based on Local Housing Allowance.  It is important that you discuss with your tenant the potential implications that these changes may have before you agree to renew their tenancy agreement or before they decide to move
• You take on a new tenant from 01 April 2011.  It is important that you discuss with any new tenant the potential changes and what these could mean to you both

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Other financial help for your tenants

We are able provide claimants with further financial assistance with their housing costs where it is considered to be appropriate with a Discretionary Housing Payment (DHP).

A DHP can be made where there is entitlement to Housing Benefit/Council Tax Benefit to cover for certain prescribed housing costs – for example where there is a shortfall between the amount of rent that they pay and the amount of Housing Benefit they receive.

The amount of DHP funding allocated to the council by the Government is limited to less than £100,000 for the financial year 2011/2012 and it is unlikely that this amount will make up the full losses resulting from the changes starting on 01 April 2011.  Due to the limited funding most DHP awards are only made for a short periods to allow the claimant time to review their circumstances and to assist as many customers as possible.

Each request for a DHP is considered on a case-by-case basis and in each case we will need full details of the circumstances before deciding a DHP request.

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