Housing Systems: Combating poverty and sustaining tenancies.

Local Housing Allowance
LHA Rates

Local Housing Allowance (LHA) rates were increased due to the pandemic. The government has said that this is a permanent change.

The LHA rates were re-set to the maximum of the 30th percentile from 1st April 2020. For 2021-2022 the levels have been maintained in cash terms but they are to remain frozen in cash terms in the future, so even if rents increase, the LHA will not be increased in line with that.

How did the increase affect benefits?
The majority of LHA rates, which had, in the main, been frozen since 2015 increased, so some claimants saw a dramatic increase in their HB / UC award.

2020/2021 LHA Rates here:

Rent Officers Order, Regulation 4 of The Social Security (Coronavirus) (Further Measures) Amendment Regulations 2020 (SI 2020/371)  

Shared Accommodation Rate

There is a Shared Accommodation Rate (SAR) in Universal Credit. So for most single people under 35 years old (who do not have a child or a non-dependant living with them or need an extra bedroom for an overnight carer) their Housing Costs Element will be capped at the LHA rate for a bedroom in a shared house in the area in which they are living.
There are some single under 35's who are entitled to the one bedroom rate of LHA rather than the Shared Accommodation rate These are those who:

  • For Universal Credit, Are under 35 and in receipt of the mid or high care component of DLA or daily living component of Personal Independence Payment.
    For HB the claimant also has to be entitled to the severe disability premium. or

  • Are under 35 who are subject to MAPPA or in Scotland are subject to the equivalent of MAPPA or, where this has not been brought fully into force, are considered by the DWP to be a person who may cause serious harm to the public at large (under current  rules this only applies to people aged between 25 and 35), or

  • Are aged between 25 and 34 (from June 2021 anyone under 35) and have, for a total of at least three months (whether continuously or not), lived in one or more hostels* for homeless people and whilst living there were offered and accepted services to assist them to be resettled within the community, or

  • Are aged at least 18 but under 22 (from June 2021 - under 25) and who were a care leaver before reaching the age of 18. 

‘Everyone In’ initiative and exemption from the SAR
In August 2020 the DWP issued guidance to HB Offices that the exemption from the Shared Accommodation Rate in Housing Benefit and Universal Credit on the basis of former residence in a homeless hostel may apply to those leaving hotels and bed and breakfasts (B&Bs) used in the ‘Everyone In’ initiative in England (and similar provisions in Scotland and Wales) to accommodate homeless people and rough sleepers during the coronavirus (COVID-19) outbreak.

To be exempted the claimant will have to fulfill the other criteria and the re-purposed hotel / bed and breakfast that they were staying in under the 'Everyone In’ project will have to satisfy the strict definition of ‘hostel’. This means that provided the claimant is over 25 and satisfies the other conditions of the exemption they will be entitled to a one-bedroom LHA rate rather than the Shared Accommodation Rate.

The DWP advise HB Offices that local provision may vary and they should consider the detail of the services and accommodation provided against the conditions of the exemption when deciding if the emergency accommodation was operated as a 'hostel'.