17 August 2010

The department for work and pensions (DWP) has published an impact assessment of the changes to the local housing allowance (LHA) in different local authorities (for the local details scroll to the tables link at the very bottom of the DWP page). This is the housing benefit paid to people in private rented accommodation not council or housing association accommodation.

The LHA proposals in Labour’s March 2010 budget would have produced 4610 losers in 2011/12 in Cornwall, that is recipients whose LHA money would have been reduced. This was largely because of the removal of the £15 excess (see below).

Those proposals were variously kept, changed, and added to in the Tory Libdem budget of June 2010. In that budget there are 8450 LHA losers in 2011/12 in Cornwall. That’s an increase of 83 percent over Labour’s proposals.

The details are in table 3 and table 26 here again and payments are in adjoining tables 4 and 27 – scroll to the tables at the very bottom of the DWP page.


There is an introduction to the changes here.

£15 excess
If a recipient found accommodation with a rent below what was allowed for in LHA, he could keep the first £15 of the difference. This was meant to encourage people to seek out accommodation with lower rents.

June 2010 budget: major LHA changes for effect in 2011/12
-Removing the £15 excess (proposed by Labour for 2011/12, confirmed by June budget)
-Imposing an absolute maximum cap on the amount of LHA payable for each size property (this replaces the March budget proposal to take the top 1 percent of national rents out of rent calculations for LHA)
-Using the 30th percentile as the benchmark for area market rents rather than the median (50th percentile)
-Limiting the maximum of the size bands to four-bedroom properties rather than five bedrooms
-An additional bedroom allowed for an overnight non-resident carer (an improvement to LHA provision)

-From 2013/14 LHA uprates will be based on the consumer prices index (CPI) not local rents.
-From 2013/14 LHA recipients of jobseekers allowance will lose ten percent of their LHA if they are unemployed for more than twelve months.
These are explained in the documents above.