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Appendix 4: Housing benefit procedures


There are presently two systems under which Housing Benefit for private tenants is administered in England. Which of these is applicable will depend on whether the claim was made before 7th April 2008. The two systems of benefit payment are:

  • Rent Allowance (Old)
  • Local Housing Allowance (New)

Rent allowance (old system): Rent allowance is often paid directly to the tenant but there are certain circumstances in which the local authority pays the landlords direct. These are:

  • If the tenant asks them to do so
  • If the landlord has informed the local authority in writing that their tenant has arrears of eight weeks or more
  • If they think that it would be in the tenantís best interest
  • If the tenant has left the property and has rent arrears of which the landlord has informed the local authority in writing.

Direct payments to landlords are made every four weeks, in arrears. If the local authority is going to pay the tenantís Housing Benefit direct to landlords they will inform the landlord in writing.

If the local authority is going to make direct payments they will ask the landlord to sign a form to show you are aware of your responsibilities.

The amount of a Housing Benefit award depends on:

  • The income and savings of the claimant, and their partner (if they have one)
  • The make-up of the claimantís household such as the number of people living in the household and their ages
  • The rent level that the rent officer feels is reasonable for the property, this will not necessarily be the level of rent that the tenant pays on the property
  • The local authority awards Housing Benefit after comparing the income and savings of the people in the household with the amount the government says they need to live on
  • The rent service considers:
  • The average market rent for the locality
  • The open market value of the property
  • Whether the property is suitable for the size of the household.

If the tenant does not agree with the rent level the local authority are using, they can appeal against it to the Rent Service, which is part of the DWP and independent of the local council. If the rent service believes the rent being charged is above the local reference rent, they will tell the council the maximum figure they can use to work out the tenantís Housing Benefit. The landlord cannot appeal against the decision of the rent service.

>> Change in circumstances affecting payments

The tenant must tell the local authorityís benefit service immediately in writing of changes of circumstance that might affect the entitlement to Housing Benefit. The landlord must also inform the local authority of any change of circumstance he is aware of.

The types of changes are:

  • The rent is going up or down
  • The tenant has moved out, even if their tenancy has not ended
  • The tenant has moved to a different room in your property
  • The number of people in the tenantís household has changed
  • Any other changes which may affect the tenantís entitlement.

Any delay in informing the local authority about a change in circumstances might result in an overpayment that will need to be repaid.

Where the local authority makes direct payments to the landlord, they can provide the following information:

  • How much they will pay
  • The date the claim is paid from and when it will end
  • Details about any payments made and any payments to be made in the future.

If your tenant has given the local authority written permission to discuss the claim with the landlord, the local authority can provide information to enable the landlord to help them with the claim for Housing Benefit.

If Housing Benefit is not being paid direct then the landlord does not have the right to know anything about the tenantís claim, unless the tenant writes to the local authority to allow this.

>> Overpayments

An overpayment is when a landlord or tenant is paid more Housing Benefit than the claimant is entitled to.

Most overpayments of Housing Benefit are recoverable, either from the tenant, or the landlord if Housing Benefit has been paid direct.

If the local authority overpays Housing Benefit the law allows them to recover the money in some cases, take official error for example. They will consider the circumstances that caused the overpayment before they decide whether to recover the overpayment and who should repay it.

If they decide to recover an overpayment from the landlord, they will write and explain how they have calculated the overpayment, the period it covers, the reason it occurred and how the landlord can appeal, and the time-scale to do so.

Note that under The Housing Benefit (General) Amendment (No.2) Regulations 2001, payments cannot be reclaimed from landlords who have been paid direct, if the landlord has co-operated with the benefit office in reporting a suspected overpayment or the tenants changed circumstances. 

>> Repaying overpayments

There are four recovery options local authorities can use:

(1)  Invoice Ė they send the landlord an invoice for repayment in full or payment by instalments

(2)  Direct deduction Ė If the landlord receives payments for other tenants, the local authority can make deductions from those payments until the overpayment is repaid.

(3)  This is irrespective of whether the landlord receives payments as an agent for other landlords

(4)  Register debt at county court Ė if they have been unsuccessful using other methods of recovery the local authority may register the debt at the county court and obtain a judgement to allow them to use the court bailiffs and attachment of earnings orders to recover the debt.

>> Appeals

The appeals process allows the local authority to reconsider a decision before submitting any appeals to an independent tribunal.

Landlords only have a right of appeal against decisions where an overpayment has occurred and where the recovery is to be made against the landlord. They cannot appeal against the amount of the tenantís Housing Benefit award.

The landlord can appeal against the local authorityís decision that an overpayment has occurred, but only if it is being recovered from the landlord, and only on the following points:

  • The amount of the overpayment
  • Whether the overpayment is recoverable

The local authority can also consider any representations from the landlord on whether they should repay an overpayment and may accordingly change their decision.

If they do not change their decision in the landlordís favour the local authority will submit the appeal to the Appeals Service so it can be considered by an independent tribunal.

The Appeals Service will look at the decision again. The tribunal cannot make decisions about who should be the target for recovery but it can consider whether the local authority has made a decision they are entitled to make. It would only be able to overturn the decision to recover an overpayment if it found that the authority had acted outside the law.

Landlords wishing to appeal against a decision that they have been overpaid must do this in writing and give reasons for the appeal. It must be received by the local authorityís benefit service within one calendar month of the date of the notification of overpayment.

>> Local Housing Allowance (LHA) (the new system):

Local Housing Allowance (LHA) is a change to Housing Benefit for people living in private rented accommodation. The changes affect how Housing Benefit is worked out and how it is paid.

The level of the allowance will be determined by the Housing Benefit office. They will also have the LHA rates on their websites.

The LHA is based on rent levels for the area in which a person lives and how many people live with them. There are no changes to the entitlement rules - this will be based on a personís income and savings and proof of a valid tenancy. Payment will normally be to the tenant, who will then be expected to pay the landlord.

Rent Officers will set individual LHA rates for each Broad Rental Market Area. Councils will publish these so that landlords and prospective LHA customers can be clear about the amount of rent that LHA will cover in any given circumstance. The fundamental aims of the LHA scheme are to promote fairness and choice.

The LHA should provide the tenant with greater flexibility. The tenant may choose to live in a larger home and pay more than the allowance, or the tenant could choose to live in a smaller home and keep the difference. It is proposed that cap of a maximum £15 per week will apply when LHA is rolled out nationally.

>> Fairness

Tenants with similar circumstances living in the same area will get the same amount of Housing Benefit. In the national roll out of LHA a cap of £15 per week is applied to LHA received above rent charged.

>> Choice

Tenants will be able to choose the quality and price of their accommodation. For example, tenants could choose to pay more than the allowance they receive for accommodation that is larger than they qualify for, or move to a less expensive house and keep the difference, subject to the £15 cap.

>> Age of tenant

The age of the tenant will affect the amount of Housing Benefit received under both Rent Allowance and LHA.
 
There are special rules if the tenants are single and under 25 years old. Their Housing Benefit is limited to the shared-room allowance which is based on the rent for a room which has a shared living room, and which may have a shared bathroom or a shared kitchen. Some single people under 25 are exempt from this rule, for example if the tenant is disabled and the Severe Disability Premium is used in your benefit assessment.

Tenants over 25 years old, with or without a partner, and who do not have any children or dependants living with them, will be entitled to the two-room rate Housing Benefit unless they live in shared accommodation. If they live in shared accommodation then their Housing Benefit will be based on the shared-room allowance. Your local authority can provide further advice or see the Department of Work and Pensions website for more information:

www.dwp.gov.uk

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