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Calculating Local Housing Allowance

Local Housing Allowance (LHA) is designed to be easy to understand and it is simple to work out what LHA rate would apply.

In this section

Who decides the LHA rates?

They are decided each year, prior to April.  The Department for Work and Pensions uses the LHA rates provided by the Valuation Office Agency (VOA). They gather market evidence about rents in particular areas, known as Broad Rental Market Areas (BRMAs). The LHA rates are given for numbers of bedrooms.

You can search for any LHA rate including those outside Merton using the VOA LHADirect website on the new Gov. Uk Housing Benefit website.

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What are LHA rates used for?

By us

When we work out your HB entitlement, we have to use a level of rent (known as eligible rent) as part of that calculation. The LHA rates give us a figure to work out the eligible rent that we will use.

LHA rates vary from year to year, so the date you claim HB can affect the amount of rent we used to work out your HB and therefore the amount of HB you get. The year runs from April to March.

By you

LHA rates can also be used by you to see if the cost of rent of a home you are thinking of moving into is comparable to the LHA rate you are entitled to and whether there is likely to be a shortfall in the HB we award. This allows you to make more informed decisions about the type of accommodation you move into and whether you can afford it.

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Which LHA rate is used to work HB?

The rate of LHA used will be based on:

  • the number of bedrooms you are entitled to according to the number of people living with you and their gender and ages and circumstances and
  • which Broad Rental Market Area your home is located in.

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How is the eligible rent worked out from the LHA rate?

Your eligible rent we use to work out your Housing Benefit (HB) will be the lowest of:

  • Either your rent; or
  • The Local Housing Allowance rate that applies to you.

Example 1:

Your rent is £150 per week

The LHA rate that applies to you is £175 per week - higher than the rent charged.

The rent we will use to work out your HB is £150 per week. This is because this is the lowest of the two amounts. Prior to 1 April 2011 you were able to get up to £15 in excess of your actual rent.

Example 2:

Your rent is £200 per week

The LHA rate that applies to you is £175 per week.

The rent we will use to work out your HB is £175. This is because this is the lowest of the two amounts.

In this example there is a shortfall of £25.00 per week in the amount of eligible rent we will use.

Shortfalls

If there is a shortfall in the rent charged and the maximum eligible rent we will use, you will have to decide whether you can afford to pay the difference out of your income or seek alternative accommodation.

You may be able to get discretionary housing payment if there is a shortfall, however, we will not be able to tell you before you make a claim whether you can get this.

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How to work out the LHA rate that applies to you

There are 3 steps to working out the LHA rate that applies.

  1. Find out how many bedrooms you are entitled to
  2. Find out which Broad Market Rental Area you live in or are thinking of living in.
  3. Find the LHA rate for the year in which you are claiming, starting each April.

Step-by-step guidance is given below:

Step 1: Find out how many bedrooms you are entitled to.

You can

  • Use the Gov.uk website and click on the link called Local Housing Allowance Limit; or
  • Use the VOA LHADirect website to find out how many bedrooms you are entitled to; or
  • Use our LHA leaflet (1.2MB) which also contains the above links web addresses.

You are entitled to one bedroom for any of the following:

  • every adult couple (married, unmarried or in a civil partnership)
  • any other adult aged 16 or over
  • any two children of the same sex aged under 16
  • any two children aged under 10
  • any other child
  • if you or your partner are an approved foster carer or foster parent
  • having an overnight non-resident carer
  • having a severely disabled child who is entitled to the middle or highest rate of the care component of Disability Living Allowance
  • having an adult child who is in the armed forces and deployed on operations.

Please see our LHA guides and leaflets for further information.

There are special rules about the number of bedrooms you are entitled to, if:

  • you are single and aged under 35 years of age
  • you are a care leaver under 22 years of age
  • you or your partner are severely disabled
  • you or your partner have an overnight carer or team of carers
  • you have a severely disabled child who needs a separate bedroom
  • you have an adult child who is in the armed forces and is deployed on operations
  • you are under 35 and an approved foster carer or foster parent.

Please see our LHA guides and leaflets for further information.

Step 2: Find out which Broad Market Rental Area applies

  • On the VOA LHADirect website you can search for the BRMA by a postcode or by local authority
  • Contact us to ask which BRMA applies, if the postcode search results give you two BRMAs.

There are three BRMAs in Merton. LHA rates vary depending on which Broad Rental Market Area (BRMA) you live in or are thinking of moving to.

The rates for the BRMAs are only valid for the year publicised. They are reviewed before each April. A new set of standard rates for the following year April to March replaces the old ones. The current LHA rates for April 2013 to March 2014 (31kB) apply for claims treated as made during that period only.

Step 3: Find the LHA rate for the current month.

  • Use the VOA LHADirect website to find out what the current rates for the number of bedrooms in the BRMA you are looking at; or
  • Look at our LHA rates page.

If you are thinking of asking us to backdate of your claim you can find out the rates on our LHA rates page for the month you are requesting backdating to.

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Paying Housing Benefit

We will normally pay HB to the tenant. Further information about who we pay HB to can be found on our Housing Benefit payments to private tenants page.

See also

Related websites

Contact us

Merton Benefits Service
PO Box 610
Merton Civic Centre
London Road
Morden
SM4 5ZT

Tel: 020 8274 4903
Fax: 020 8545 3960
Email:housing.benefits@merton.gov.uk

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This page was last updated on Monday 9 December 2013