Changes to housing benefit and local housing allowance (LHA)

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Housing laws vary between England and Scotland. Get advice relating to Scotland

Changes to local housing allowance (LHA) may mean that you are already getting less housing benefit, or your housing benefit may be affected in the future if you rent privately and claim local housing allowance (LHA).

Find out about the changes to housing benefit and local housing allowance (LHA) that started in April 2011 and how they may affect you.

 New rules apply to new local housing allowance (LHA) claims made after 1 January 2012. More changes are expected in 2013.

Our table shows you how much local housing allowance (LHA) payments might be reduced by per month, for each market area and size of property.  

Who is affected by the changes to local housing allowance (LHA)?

If you are renting from a private landlord and you made your claim for housing benefit at your current address on or after 7 April 2008, the changes probably affect you. Large households and those living in central London and other expensive areas are usually affected more than others.

You are usually not affected if you made your claim before 7 April 2008, have not moved since and there has been no break in your claim.

However, in some areas, people who made a claim before 7 April 2008 may be affected. Seek advice if your housing benefit department applies the changes to you and you are not sure it should.

When will the local housing allowance (LHA) changes affect me?

New claims for local housing allowance (LHA) made from 1 April 2011 onwards are covered by the new rules.

If you were claiming LHA before 1 April 2011, some changes may apply from 1 April 2011, while others may be delayed.

From 1 April 2011 onwards, if your circumstances change so that you are entitled to housing benefit for a smaller home (for example, someone in your family leaves home) or you move to a different property, the new rules apply and your LHA will be reassessed at the lower rates.

Many of the changes take effect on the anniversary of your claim, when your entitlement is reassessed. For example, for a claim made on 2 September 2010, the anniversary will be a year later on 2 September 2011.

However, in some cases, if you are worse off as a result of the changes, the reduction to your local housing allowance will be delayed for a further nine months. After this time, your local housing allowance will be recalculated and your benefit may be reduced.

For example:

  • if your claim was made in October 2010, the anniversary of your claim is October 2011. Any reduction in your benefit could be delayed for a further nine months – until July 2012
  • if your claim was made in March 2011, it will be due for review in March 2012. Any reduction in your benefit could be delayed for a further nine months – until December 2012.

There is also some protection for people whose family size increases, or in some circumstances where someone has died.

Details of when you could be affected by the changes are provided on this page. This is just a guide – you may need to seek advice. Use our directory to find advice services in your area. 

Changes from 1 April 2011

As a result of changes to the law, these changes take effect from 1st April 2011.

‘Excess’ payments end

Before April 2011, you could be paid local housing allowance (LHA) of up to £15 a week more than your rent – and keep the difference. This happened only if your rent was lower than the amount allowed under local housing allowance. From 1 April 2011, the maximum local housing allowance is limited to the level of your rent. Excess payments stop on the anniversary of a claim, or sometimes sooner if there is a change in household circumstances.

Only 30 per cent of properties are affordable

In April 2011, maximum local housing allowance (LHA) rates in all areas were reduced – only three out of ten properties for rent in any area are now affordable for people making a new claim. Unless your rent is already one of the lowest 30 per cent in your area, the maximum LHA you can be paid will be less than your rent. To avoid rent arrears, you will have to make up the difference.

If you were claiming local housing allowance before April 2011, this change affects you up to nine months after the anniversary of your claim. This is an important time to consider your options and seek advice. Unless you can make up any shortfall, you may have to consider moving somewhere more affordable.

Local housing allowance (LHA) maximum rates for all postcodes or council areas can be found using the LHA Direct calculator.

New caps on weekly local housing allowance (LHA) rates

For new claims made from 1 April 2011, a maximum weekly rate of local housing allowance (LHA) in any area now applies. This is based on the number of bedrooms your household qualifies for:

  • £250 for a one-bedroom property
  • £290 for a two-bedroom property
  • £340 for a three-bedroom property
  • £400 for a four-bedroom property.

In expensive areas such as central London, rents are often much higher than these limits.

If you are already renting a property with a weekly rent above these maximum amounts, your local housing allowance will be reduced up nine months after the anniversary of your claim, or sooner if your household circumstances change. You may have to think about moving to a more affordable property or to a cheaper area to avoid rent arrears.

You may need to seek advice about how you could make up any shortfall, whether you may need to move to a more affordable home, or how to negotiate with your landlord to see if they will agree a cheaper rent.

Local housing allowance (LHA) payments for a new maximum of four bedrooms

Local housing allowance (LHA) rates for larger households used to include a maximum payment for up to five bedroom properties. From 1 April 2011, the rates are limited to a maximum of four bedrooms.

  • For new claims made since 1 April 2011, the four bedroom rate is the maximum.
  • If you received the five-bedroom rate before 1 April 2011, your benefit will be reduced up to nine months after the anniversary of your claim.
  • If your circumstances change, eg your household becomes smaller, your benefit will be reassessed under the new rules.

If you need a larger property, you can still look for properties with more than four bedrooms, or other rooms that can be used as bedrooms. However, your maximum benefit will be based on the four bedroom rate, so a shortfall is likely unless the property is cheaper than usual for the area. You can use the LHA Direct calculator to work out how many bedrooms your household is entitled to claim for.

Reduced local housing allowance (LHA) if you have non-dependants

The council may reduce your local housing allowance (LHA) if you share your home with adults who are not dependant on you – for example, adult sons or daughters, parents, relatives or friends. It is assumed that they should pay something towards your rent, whether they do so or not.

Non-dependant deductions were increased in April 2011 for all housing benefit claimants, and local housing allowance reduced as a result.

Increased payments for disabled people who need overnight care

If you or your partner are disabled and need a carer who doesn’t normally live with you to stay overnight, you may qualify for help with paying for an extra bedroom. This change applies to all private tenants. You will need to show that:

  • you have the extra bedroom in your home available for the carer to use 
  • care is required  
  • care is provided.

Make sure that your council’s housing benefit department knows you have an overnight carer, so that they can review your claim.

 From 1 April 2011, if you claim local housing allowance (LHA) and you contact your housing benefit department to ask for your benefit to include the extra bedroom rate for a carer, the new rules for LHA will affect you immediately. A small number of households will be worse off, even after increased payments for overnight care. If you live in Cambridge, central London or parts of north London, it is important that you seek advice before asking your council's housing benefit department to review your claim.

Changes from 2012

As a result of changes to the law, these changes take effect from 1 January 2012.

Reductions in local housing allowance (LHA) if you are under 35

Currently, if you are under 25 and renting in the private sector, you are probably only entitled to local housing allowance (LHA) at the same rate as someone renting a single room in a shared house, even if you live in self-contained accommodation.

From January 2012, this rule – the ‘shared accommodation rate’ – will also apply to people aged up to 35 years. If you are aged under 35, you are likely to see a cut to your LHA payment and may no longer be able to afford your current property as a result.

This change doesn't apply to lone parents, couples living in self contained accommodation or single people living with adult dependents. There are also exceptions – these changes don’t apply in some cases. Find out more about housing benefit changes if you are under 35.

Changes from 2013

Changes to benefits planned from 2013 have recently become law.

Capping overall benefits

The Government has said that no non-working household should be entitled to more in benefits than the average working household receives in wages. Overall benefit payments to households will be capped from 2013 and we expect this to be achieved through cuts to local housing allowance (LHA).

Families with three or more children (particularly those living in the South East) are likely to be among those facing significant reductions in the amount of LHA awarded. If you believe you may be affected by this change, you should get in touch with an adviser - use our directory to find one in your area.

Will I have to move?

You could find that moving to a cheaper property may be the only way to keep your rent affordable in the long-term. This may even involve moving area. Take a look at our A-Z guide for people who are forced into moving to a new home.

Make sure you allow plenty of time to move, particularly if you are looking for somewhere adapted for use by a disabled person. A local advice centre may be able to help you find somewhere suitable – use our directory to find one. 

What if I can’t pay the shortfall?

Many private tenants will struggle as a result of these changes. It could be difficult to make up the shortfall between the reduced amount of housing benefit you receive, and the rent you have to pay. Some will fall into rent arrears. If you are in this situation, you will need to take action to avoid the risk of eviction. It may be possible to:

  • talk to your landlord to see if your landlord will consider reducing the rent
  • apply for a discretionary housing payment to help make up the shortfall
  • ask non-dependants to increase their contributions to the rent.

A local advice service may be able to help you to:

  • negotiate with your landlord
  • apply for a discretionary housing payment
  • find somewhere more affordable.

Use our directory to find services in your area.


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