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Housing Benefits - changes from April 2011

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Important changes to Housing Benefit from April 2011

In June of last year the new coalition government pushed through an emergency budget designed to help bring down the national debt, as part of this emergency budget the Chancellor introduced new changes to the way Housing Benefit or LHA is going to be calculated.

The main changes to be aware of are that the calculation of LHA will now change, meaning a reduction in the amount you will recieve.  Below is a table of Current and Proposed LHA rates due to come into effect as of April 1st.

LHA Rates 1 Room 1 Bed 2 Bed 3 Bed 4 Bed 5 Bed
Current: LHA December 2010 £65 £91.15 £114.23 £137.31 £160.38 £196.15
Proposed £54.23 £86.54 £103.85 £126.92 £144.23 -

What will this mean for landlords?

Any tenant who moved into your property after April 2008 are highly likely to be affected by these changes.  Upon review of claims, any existing tenat may have their Housing Benefits reduced.  In most cases the review will happen on the anniversary of their claim, 12 months from the date of the first claim.  Some people will be protected from these changes for up to 9 months under transitional arrangements.

From April the council will also have better discretion to pay HB directly to landlords so that it helps to streamline the rent payment process further.  Direct payments may also be offered if a landlord proactively chooses to reduce their rent to the new lower LHA levels.

Changes to the maximum rate

There will also be changes to the maximum rate caps, so that LHA weekly rates in any part of the country cannot be more than

  • £250/1bedroom property
  • £290/2 bedroom property
  • £340/3 bedroom property
  • £400/ 4 bedroom property

There will now no longer be a 5 bedroom property rate, the maximum rate will be based on a 4 bedroom property.

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