Local Housing Allowance

rdf:langString Local Housing Allowance

rdf:langString Local Housing Allowance (LHA) was introduced by the government of the United Kingdom on 7 April 2008 to provide Housing Benefit entitlement for tenants renting private-sector accommodation in England, Scotland and Wales. The LHA system introduced significant changes to the way Housing Benefit (HB) levels are restricted and how benefit is paid. It did not replace Housing Benefit - it is just a different way of calculating entitlement under the existing Housing Benefit scheme: the Local Housing Allowance is based on the 30th percentile of local rented accommodation, while the 50th percentile or median was used from the introduction of the policy until 2011. LHA rates relate to the area in which the housing-benefit claim is made. These areas are called "Broad Rental Market Areas", defined as "where a person could reasonably be expected to live taking into account access to facilities and services", and a selection of rents in the area are used to determine the LHA for each category of housing in the area. LHA rates were created by the Department for Work and Pensions with the goal of controlling costs and establishing a standard amount for those in receipt of Housing Benefit. LHA rates ensured that tenants in similar circumstances and areas could claim similar amounts; i.e. based on their needs rather than based on their property, and so that it was possible to know in advance how much rent could be covered by housing benefit in a given area. However it was found after LHA's first limited implementation in 9 Broad Rental Market Areas that rent levels rose more rapidly in those areas - particularly in those parts of these areas where previously the price was lowest -resulting in criticism that LHA could increase homelessness and remove the poor and unemployed from areas in which they could more easily find work, or find access to vital services related to disability needs. Since 2012, year-on-year LHA increases are capped based on the rise in the Consumer Price Index, even if the 30th percentile of rents that year would mean a larger rise in the rate, thereby changing the underpinning of the policy from one where LHA rates are tied to the actual rents in a given area at a certain time to one where the rate is based on a standard increase each year, similar to most other benefits such as Jobseekers Allowance, Employment Support Allowance, etc. In 2015, Chancellor of the Exchequer George Osborne announced a complete freeze on LHA rates until 2020, though the some high-cost areas receive a 3% uplift in LHA rates from Targeted Affordability Funding (TAF).