Changes to Housing Benefit from April 2011

The government have made changes to how Housing Benefit, Council Tax Benefit and the Local Housing Allowance (LHA) scheme are worked out from 1 April 2011.

• Ending the £15 excess payment
• Removing the 5 bedroom LHA rate
• Capping the maximum LHA rates
• Changing the calculation of LHA rates based on the 30th percentile
• Providing additional Housing Benefit where a carer is required  to stay overnight in your home
• Increasing deductions for a non-dependant person living in your household
• Further Information

Note:

Where an "anniversary date" is referred to this is the date that a customer made their current claim as LHA rates are reviewed annually. For example if a customer made a claim in December 2008 the anniversary date will be December 2011.

Where "transitional protection for 9 months following the anniversary date" is referred to and using the anniversary date of December 2011 a customer could be protected from a reduction in their LHA rate until September 2012.

Ending the £15 excess payment

Previously Housing Benefit customers were allowed to keep up to £15 per week, where their LHA entitlement was greater than their rent liability. These payments will cease on 1 April 2011 for new customers and on the next anniversary date for existing claimants.

Removing the 5 bedroom LHA rate

There will no longer be a 5 bedroom rate meaning that the maximum customers can receive is the 4 bedroom rate.

This will apply to all new customers from 1 April 2011. Existing customers will receive a transitional protection for 9 months following their anniversary date providing there are no changes to their household or address.

Capping the maximum LHA rate

The rates for each bedroom category will be capped. LHA weekly rates in any area cannot be more than:

• £250 for 1 bedroom
• £290 for 2 bedrooms
• £340 for 3 bedrooms
• £400 for 4 bedrooms

Calculation of LHA rates based on 30th percentile

Currently LHA rates are calculated using the 50th percentile of rents in an area. This is the mid point in the range of rents in a broad rental market area. This means that 5 out of 10 properties are affordable to housing benefit claimants. From 1 April 2011 the calculation of LHA rates will be based on the 30th percentile of rents in an area which is the lower third of the range of rents in a broad rental market area. This will mean that only 3 out of 10 properties will be affordable to housing benefit customers and so LHA rates are likely to reduce.

This change will apply to all new customers from 1 April 2011. Existing customers will receive a transitional protection for 9 months following their anniversary date if there are no changes to their household or address.

Additional Housing Benefit if you or your partner has a carer who stays overnight in your home

The measure will include an additional bedroom within the LHA bedroom allowance rate where a disabled customer or their partner (with a long term health condition), has a need for overnight care that is provided by a non-resident carer from April 2011.

Increases to Non-Dependant Deductions

Non-Dependant Deductions have been "frozen" since 2001. The rates will be increased in stages over the next three years, therefore by April 2014 the non dependant rates will reach the level they would have been had they been fully increased with inflation each year since 2001.

If you have a non-dependant living in your home you may be subject to increased non-dependant deductions from 1 April 2011 which could reduce the amount of Council Tax Benefit or Housing Benefit you currently receive.

Non-Dependants are any adult family members over 18 who normally live with you, for example adult sons, daughters or other relatives who live with you but are not dependant on you for financial support, they could also be an adult friend.

Further Information

If you require further advice please telephone 0121 704 8200 or visit one of our Solihull Connect Centres

Solihull Connect
Ground Floor, Library Square, Solihull, West Midlands, B91 3RG

Solihull Connect at Shirley Police Station
285 Stratford Road, Shirley, Solihull, West Midlands, B90 3AR

Solihull Connect at The Bluebell Centre
Ground Floor West Mall, Chelmsley Wood, Solihull, B37 5TN

Solihull Connect at Balsall Common Library
283 Kenilworth Road, Balsall Common, West Midlands, CV7 7EL