Local Housing Allowance Information for private landlords

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1 Local Housing Allowance Information for private landlords Who does Local Housing Allowance apply to? Local Housing Allowance applies to most tenants who rent their home from a private landlord and make a new claim for Housing Benefit or change their address. How does Local Housing Allowance affect landlords? The main way Local Housing Allowance affects landlords is that payment of housing benefit will normally be made direct to the tenant. The tenant is then responsible for paying their rent to you. What protection exists for landlords? There are a range of Safeguards to protect the interests of landlords. We must usually pay the benefit to the landlord if the tenant is eight weeks or more in arrears with their rent or an amount of the customer s state benefit (for example, Income Support) is paid to the landlord to pay off rent arrears. We recommend that, if the tenant is starting to build up rent arrears, you get in touch with us before it gets to eight weeks. We may also decide to pay the tenant s benefit to you if your tenant is: Likely to have difficulty in managing their financial affairs; or Unlikely to pay their rent. You should contact us straight away when a problem occurs. This allows us to investigate whether there is a problem. We normally pay Housing Benefit to you whilst we investigate these matters. For more information on the safeguards, please see our Safeguard Policy on the website (details at the end of this fact sheet). 1

2 Who decides if a tenant is likely to have difficulty in paying their rent? We will decide whether a tenant is likely to have difficulty in paying their rent. We will need evidence to support a request, which can be made by the tenant or other interested party. You, as a landlord, can approach us if you think it likely that your tenant will have difficulty in paying or you feel they cannot deal with their financial affairs. We will contact your tenant for further information regarding this. It is up to us to decide whether a tenant is unlikely to pay their rent. We can only do this if we have evidence of past, or likely, failure to pay rent. We will take into account all knowledge and evidence available to us at the time, including any known past history when making our decision. It will also be important for you to keep proper and adequate rent records showing the due date of payments, the amounts actually paid, any arrears and details of any contact made with the tenant. Your records will be crucial to us in determining whether or not a tenant has rent arrears. Because we take account of past evidence in our decisions, if a tenant leaves an address you own owing arrears or there were other problems, please tell us of this. We will use this information if the tenant claims again. Can the tenant ask for their benefit to be paid to their landlord? If a tenant feels that they may have difficulty in managing their financial affairs and that their Housing Benefit should be paid to you under the safeguard arrangements, we will consider any request they make. If you set or reduce the rent to the Local Housing Allowance rate so that the tenant can afford to live there, we will normally pay your tenant s Housing Benefit to you if they want us to do this. We may also consider payment to you if the rent is higher than the Local Housing Allowance rate but the rent is still affordable to the tenant. A rent charge that is higher than the Local Housing Allowance is not affordable though where the customer has to pay the excess from their own income. We may have to look at our decision to pay you again though if you put the rent up above the Local Housing Allowance rate to a level your tenant cannot afford. 2

3 Where direct payments are made to me, how long will they go on for? We will normally continue to pay you unless the rent becomes unaffordable to the tenant. For example, we would have to review our decision if you increased the rent above the Local Housing Allowance level Where a tenant is considered likely to have difficulty in paying their rent and there is little or no prospect of their situation changing, our decision to pay their benefit to you is likely to be permanent. Where a tenant is considered likely to have difficulty in paying their rent and there is prospect of their situation changing, we have to regularly review our decision to pay you. If the tenant is in a better position to have their benefit paid to themselves and to pay their rent in full and on time, we will have to stop paying you. We will write to you and let you know if this happens. Won t tenants spend their Local Housing Allowance on other things? Many tenants in the private rented sector get their Housing Benefit paid to them and regularly pay their rent on time. Where a tenant is receiving their own Housing Benefit payments we make it clear to them what their responsibilities are and the consequences of not paying their rent. Can I make direct payment a condition of the tenancy? We are not party to the tenancy agreement between you and your tenant, and are not bound by any conditions in a tenancy agreement. We cannot pay benefit to a landlord directly at the tenant s request the rules about when we can pay the landlord directly are outlined above. You cannot change this by making direct payment a condition of the tenancy. What appeal rights do I have against a payment decision? If you have asked us to pay your tenant s Housing Benefit to you, you have the right to appeal against a decision not to pay you. 3

4 How do I find out what the Local Housing Allowance rate for my property will be? Local Housing Allowance rates are based on the number of bedrooms a tenant needs, not the size of the property they actually live in. The Local Housing Allowance rates inform you of the maximum amount a household of a certain size could be awarded. We publish the Local Housing Allowance rates on the council s website at The rates are set once a year and apply from the 1 April until the 31 March of the following year. The rates for each number of bedrooms are looked at separately each 1 April and can increase, decrease or stay the same. Who sets the Local Housing Allowance rates? The Valuation Office Agency set the Local Housing Allowance rates. How does a tenant work out their Local Housing Allowance rate? Local Housing Allowance is based on the number of bedrooms a tenant needs. The number of bedrooms allowed depends on who lives with the tenant as part of the household. Generally, one bedroom will be allowed (to a maximum of 4) for: every adult couple any other adult aged 16 or over any two children of the same sex any two children regardless of sex under 10 any other child For example, a couple with two children under 10 would be allowed two bedrooms. An extra bedroom can be allowed if the tenant or their partner are disabled and need overnight care. They must have an extra bedroom that a carer uses to sleep in overnight The maximum rate of Housing Benefit is limited to the rate for a 4 bedroom property, even if the tenant needs a property with more bedrooms. We use the Local Housing Allowance rate that applies when their Housing Benefit claim starts. Unless they have a change in circumstances, we will use this rate until it is changed by the Valuation Office Agency. 4

5 Remember, a tenant will not automatically be paid the Local Housing Allowance rate, as we will then do a Housing Benefit calculation based on income etc. If their Local Housing Allowance rate is less than the rent charged, their Housing Benefit will be based on the Local Housing Allowance. If their Local Housing Allowance rate is more than their rent charge, their Housing Benefit will be based on their rent charge. Housing Benefit Shared Accommodation Rate Changes Most single people under the age of 35 are only entitled to the lower rate of Housing Benefit for a room in shared accommodation. Special rules for single people over 35 and couples with no children Single people over the age of 35 and couples with no children will only be allowed the 1 bedroom Local Housing Allowance rate if they actually rent a property of at least this size. If these people are living in accommodation where they share facilities like a living room, kitchen or bathroom, they will only be allowed the Local Housing Allowance rate for shared accommodation. Further information Telephone: E mail: Website: Write to: In person: housing.benefits@doncaster.gov.uk (general enquiries only) Doncaster Council, Benefits Section, Civic Office, Waterdale, Doncaster, DN1 3BU Our counter at the Civic Office is open Monday to Friday from 8.30am to 5pm. This fact sheet is a guide only. It is not meant to say exactly what your legal rights are. While we have tried to make sure that the information in this leaflet is correct, it is possible that some points may be oversimplified. Also, please remember that the information in this fact sheet is likely to become less accurate over time because of changes to the law. (Last update 15 May 2015) 5