How Local Housing Allowance is paid

Housing benefit calculated the LHA scheme is to be paid directly to the claimant. It can no longer be paid directly to the landlord at the claimant's request. However, there are some exceptions.

The Department for Work and Pensions (DWP) state that they want payments to be made, where possible, in to the claimant's bank account and for the claimant to set up a standing order to pay the rent to their landlord.For people do not have bank accounts and may have difficulty opening one, Money Helper have published information on opening a basic bank account.

Mandatory

Local authorities are required to make payments directly to the landlord if the claimant:

• is having deductions taken from their income support or jobseeker's allowance to pay off rent arrears, or

• is more than eight weeks in rent arrears.[1] Rent is in arrears once the date it is due to be paid has passed regardless of whether it is due to be paid in advance or in arrears[2]

Discretionary

Authorities also have the discretion to make payments direct to the landlord if:[3]

• the local authority believes that the claimant is unlikely to be able to manage their own finances 

• the local authority believes that the claimant is unlikely to pay the rent 

• a direct payment of housing benefit has been made previously for the reasons that the local authority must make payments of LHA to the landlord

• it will assist the claimant to secure or retain a tenancy 

Difficulty paying rent

A landlord, a claimant, or any person acting on behalf of a claimant can ask the authority to assess whether the claimant is a person likely to have difficulty paying the rent and to make direct payments to the landlord. The concept of 'safeguard criteria' has replaced that of 'vulnerability' in the guidance issued by the DWP, in that direct payment will safeguard the claimant's home. Guidance advises that the local authority should make its decision within eight weeks of any request.[4] A decision not to make direct payments can be appealed in the same way as other decisions. The local authority will interview the claimant when making its assessment, unless the written evidence it has makes this unnecessary. Guidance states that evidence from social services, GPs, banks and the DWP should be accepted with confidence, and evidence from welfare organisations, such as advice services, should normally be taken at face value.[5]

Guidance suggests that a claimant may have difficulty paying rent if they:[6]

• have learning disabilities

• have a serious medical condition

• cannot read or write and/or do not speak English

• have a history of drug or alcohol dependency and/or gambling

• are fleeing domestic abuse

• are leaving care or prison

• obtained a private tenancy with the assistance of a local authority, whether in carrying out its duties under the homelessness legislation or through its homeless prevention service

Unlikely to pay rent

Potential unlikely payers can be identified by representations from the claimant, their landlord or other sources, such as social services, housing charities and Supporting People teams. The local authority can also make a decision to pay direct, based on the evidence it may already hold, for example from its housing or social services departments, that a claimant is unlikely to pay their rent.

The local authority should always seek evidence before making a decision; it should not make direct payments just because a claimant says they will not pay the rent.[7] In considering evidence of past non-payment of rent there should be evidence of persistent rather than occasional non-payment.

Help to secure or retain tenancy

The local authority can make payments directly to the landlord where it considers that it will help a claimant secure or retain a tenancy.[8] It was hoped that the possibility of direct payments would be an incentive to landlords to reduce rents to a more affordable level.[9]

Payment to former landlord

The local authority can make a payment directly to a former landlord if the claimant still owes rent. The amount that can be paid is limited to the rent outstanding.[10]

A local authority is not obliged to make direct payments to a landlord even where the tenant has eight weeks' rent arrears if:

• it is in the claimant's overriding interests not to. Guidance gives the example of where the tenant is withholding rent pending the landlord carrying out essential repairs[11]

• the landlord is not a 'fit and proper person'.[12] Although they can do so if the claimant risks eviction if they do not

Once calculated, a claimant's LHA will apply for one year from the date of claim, unless there is a relevant change of circumstances.[13]

After one year, the claimant will receive the LHA rate that applies in the month that the anniversary falls. If the year expires on a Monday the new rate will apply from that day; if it expires on any other day it will apply from the start of the following benefit week, ie the following Monday.[14]

If a working age claimant can show they have good cause for not making a claim for LHA for a period during which they were entitled to it, the local authority must backdate the claim. A claimant who has attained the age to qualify for pension credit does not have to show they have a good cause for their claim to be backdated.

When a claim is backdated, the applicable LHA will be that of the month the claim is backdated to and the LHA will run for one year from that month.[15] However, if there is a gap between the backdated period and the current claim, the LHA rate that applied at the start of the backdated period will only apply to that period.[16]

Local authorities cannot recover more overpaid benefit from a landlord than the amount that was paid to them where the claimant has received some of the benefit themselves.[17]