Changes to Housing Benefit and the Local Housing Allowance Cap

The Government has recently announced further changes to the Local Housing Allowance housing benefit cap (including the housing cost element of Universal Credit). Most importantly, it was announced in the Autumn Statement 2016 that the cap would now apply from 2019, rather than 2018 as previously announced.

Who does this affect?

These changes apply regardless of your age, including if you are over working age.  There are specific changes for those under 35.  

What does it mean for me?

If you signed a new tenancy or renewed your tenancy agreement from 1 April 2016, the amount of Housing Benefit (or Housing element of Universal Credit) that you receive from 1 April 2019 could be restricted.

This is because the government has decided the amount of Housing Benefit you will receive will be capped to the relevant Local Housing Allowance (LHA) rate that currently applies to private sector tenants.

The LHA rates for your area can be found by searching for your postcode hereThe amount you receive will be capped at the LHA rate for your area, which is based on a figure set by the government and determined by factors such as number of bedrooms and your household.  If you are not sure how many bedrooms you are entitled to, use the LHA Bedroom Calculator or contact the Housing Benefit department at your local authority.

Under 35?

If you are single, under 35 years of age and do not have any dependent children living with you, your Housing Benefit will be capped to the Shared Accommodation Rate even if you do not share your home with anyone else.  You could find your Housing Benefit will no longer pay for all of your rent.

However, some people under the age of 35 will be able to claim the one-bed LHA rate if they:

  • receive the severe disability premium under Housing Benefit;

  • are in receipt of Attendance Allowance, the middle or higher rate of Disability Living Allowance care component or the daily living component of PIP;

  • are under the age of 22 and were looked after or are under supervision of the local authority under specific legal conditions after he/she turned 16;

  • are under 22 and provided with accommodation by the local authority under specified provisions;

  • require overnight care;

  • are at least 25 and have been living in a homeless hostel for three months or more (this does not have to be continuous) and received support;

  • Are at least 25 and an offender subject to specific MAPPA arrangements.

Will I also have to pay the Bedroom Tax?

If you are of working age and have one or more extra bedrooms, your rent and any service charges used in the assessment of your Housing Benefit (or the housing element of Universal Credit) is already capped.

If the difference between your rent and the relevant Local Housing Allowance rate for your household is higher than the Bedroom Tax, only the LHA cap will apply. Similarly, if the reduction for Bedroom Tax is higher than the relevant LHA rate for your household, only the Bedroom Tax will apply. If you are of pension age, you are not affected by the Bedroom Tax, but your rent will be capped to the relevant LHA rate for your household.

What do I need to do now?

If the above applies to you, you will need to consider how you will pay for the difference between your rent and your LHA entitlement.  Always make your rent the top priority – otherwise you could risk losing your home.

You may need to find an additional source of income, see our Increasing Your Income page for some helpful advice

Setting up a Direct Debit could also help you budget, and ensure your rent is paid on time

How do I find out more?

The exact details of these changes are still to be announced by the government. We will keep you informed on our website and through our newsletter as the information becomes available. We will also advise you of the changes if you sign a tenancy agreement with us after 1 April 2016.

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