The National Rollout of Local Housing Allowance

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The National Rollout of Local Housing Allowance
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LHA - Contents

• Protections
• Payments
• Safeguards
• Excess Payments Gainers
• How LHA affected claims in Lewisham
• Caseload trends
• Rent arrears Vulnerability

• Why LHA was introduced
• Pilot Stage
• Local Housing Allowance?
• Tenancies affected by Local Housing Allowance
• Exempted?
• What are the changes?
• Implementation of the changes
• Calculating LHA Number of rooms

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Why was LHA introduced?

• To simplify the HB scheme
• HB criticised as complex, doing little to promote
  personal responsibility
• The old scheme did little to assist tenants to
  develop essential financial and budgeting skills
• Barriers to work

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Pilot Stage

• Lewisham has been a Pathfinder authority since
  December 2003
• 18 Authorities worked in line with Local Housing
  Allowance
• Royal Accent was received in October 2007, which
  allowed the remaining authorities to go live with
  Local Housing Allowance from April 2008.

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Local Housing Allowance

• LHA set each month
• Set locally by Rent Officers based on local rents
• Rates published so that tenants know how much
  they will receive
• Flat rate according to household size and
  location

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Tenancies affected by Local Housing Allowance

• Deregulated private tenancies that have been
  entered into since 1989 and are not covered by
  any of the exemptions such as

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Exempted?

• Those currently not subject to the Rent Officer
  rules such as pre 1989 tenancies
• Mobile homes and caravans
• Housing Associations
• Board and Lodge
• Supported accommodation provided by a charitable
  or voluntary organisation

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What are the changes?

• Broad Rental Market Area (BRMA) are now
  calculated on median rents not average
• Removal of living rooms from calculation
• Based on Bedrooms needed only
• Introduction of a cap for excess payments of
  benefits

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What are the changes?

• LHA National Rollout will only affect
• New Claims
• Change of Address
• Break in claim
• Substantial change in household makeup

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Implementation of the changes

• Letters have been sent to tenants advising them
  of the changes to the scheme
• Posters have been produced explaining what has
  changed
• Our website have been updated to reflex those
  changes
• Our mainframe system has also been updated
• All front/back office staff have been trained on
  the changes.

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Calculating LHA-Number of rooms?

• One bedroom for
• Every adult couple (married or unmarried)
• Any other adult aged 16 or over
• Any 2 children under the age of 10
• Any 2 children of the same sex aged 10 - 15
• Any other child

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Local Housing Allowance

• Under 25s
• Single claimants under 25 will be entitled to
  shared room rate. The exemptions to this are if
  the claimant is a care leaver (up to the age of
  22) or in receipt of severe disability premium,
  they will be entitled to the 1 bedroom rate

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Local Housing Allowance

• Over 25s
• Single claimants over 25 years old and couples
  with no dependant children will be entitled to
  the 1 bedroom rate providing they rent a property
  at least that size

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Payments

• Direct to the claimant unless 8 weeks arrears
• Promoting bank accounts
• BACS or crossed cheque
• Help to access bank accounts and
• Promoting money management advice

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Safeguards

• Recognised risk that some tenants may struggle
  with paying their rent
• Requests can be referred by landlord or third
  party
• Each case assessed on its own merits
• Short term reviews

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Excess Payments Gainers

• At present if a claimants rent is less than the
  LHA amount the tenants keep the difference
• An average gainer receives an excess of 38 per
  week
• With the biggest gainer receiving an excess of
  380 per week
• From April 2008 there will be a cap of 15 excess
  for all new claims. Current claims will change
  when they have a change in circumstances or in
  April 2009 if there has was no change

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How LHA affected claims in Lewisham
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Caseload trends

• LHA caseload has increased from 3,800 in December
  2003 to 5,468 in March 2008
• LHA appears to be a significant factor in this
  increase

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Rent arrears Vulnerability
At the end of March 2008, of the 5,468 customers
receiving LHA

• 606 claims were paid directly to the landlord due
  to the customer being 8 weeks or more in arrears,
  or being deemed unlikely to pay the rent.
• 667 were treated as vulnerable and Housing
  Benefit was paid directly to the landlord
• Direct payments due to rent arrears are reviewed
  regularly

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Local Housing Allowance

• Any Questions?