LHA and service charges

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  • #33953
    peterdelamothe
    Keymaster

    Just musing following an LHA training session ….

    The basic rule is that service charges do not have to be considered. However, this FAQ issued by DWP appears to be causing some confusion:

    “Can payments to landlords, up to the amount of the contractual rent, include service charges?

    Yes, if the services charges are included in the contractual rent and are a condition of occupancy. If, however, the service charges are not a condition of occupation of the dwelling, e.g. optional laundry charge:

    deduct these from LHA amount and
    pay the difference to the landlord and
    pay any excess to the customer”.

    Rent includes “payments of, or by way of, service charges payment of which is a condition on which the right to occupy the dwelling depends”. DWP give the example of “optional laundry charges” but what about others? I reckon general counselling and support is possible if the provider is not the landlord. Garages are dealt with under other provisions. Any others?

    Slightly different point, if a landlord is charging below the LHA and they cannot increase the rent, could they increase the total charge by introducing services that are normally ineligible for HB via a deed of variation?

    What about (as an example) satelitte TV charges? If this was included in the rent as a condition then it appears to me that it could be met provided the total charge did not exceed the LHA level.

    #94617
    Anonymous
    Guest

    I thought this was supposed to be a simplification? the more I look at this the more confused I get!!
    🙄
    can I be optimistic, can it all come out in the wash ??? (laundry pun intended!)

    #94618
    Anonymous
    Guest

    That piece of guidance sounds unnecessarily complicated to me. I am not sure how plausible the FAQ example is: this would have to be a case where the headline inclusive rent quoted in the agreement includes items that the claimant is not required to pay as a condition of the tenancy … I have never seen anything like that.

    As for deducting optional charges from the LHA amount … I don’t know what they mean. Here is a link to FAQ 34 from which Peter D’s extract is taken:

    [url]http://www.dwp.gov.uk/housingbenefit/faq/lha/sect2/board-lodge.asp[/url]

    I don’t like to see DWP getting ganged up on by us lot, which sometimes happens on here, because I always find them approachable and happy to discuss issues, so it is with regret that I have to say FAQ 34 is confused and confusing nonsense.

    It really is this simple: if the LHA rate is more than the contractual rent, including whatever it includes, plus £15 the claimant gets R+15. Otherwise, they get the LHA rate.

    I think supported accommodation is the only type of case where it is sometimes unclear whether a service charge is part of the rent or a separate matter: social services professionals tend to see HB as part of a generic funding package and do not always recognise that HB is there to cover a private deal between landlord and tenant. See in particular the way LA websites present the Adult Placement Scheme to prospective carers. But nearly all supported accommodation will avoid LHA because it is exempt, and/or there are meals provided, and/or the landlord is an RSL. I cannot easily think of a plausible LHA case with support services.

    As for everyone else, it should be easy enough to see how much they are required to pay as a condition of the tenancy. Whether or not it includes services is of no interest at all.

    (OK, information requirements: I know, I know. We are talking about the amount of HB here though, and that is the simple part)

    #94619
    peterdelamothe
    Keymaster

    Peter, don’t sit on the fence, say what you really think!

    The second part of my post above was really looking at ways that landlords could increase liability in some form to grab more from the LHA pot even if they could not increase the rent at that time.

    The trouble is that I keep thinking of dubious albeit legal ways to “maximise” LHA entitlement. If I can, others will too.

    #94620
    RobBox
    Participant

    I have just picked up that we will still need to know breakdown of rent including ineligible service for cases that are afforded 13 weeks protection at the start of their claim GM 7:10

    #94621
    ctbaacf
    Participant

    Would anyone be able to tell me where in the Guidance Manual it states there is no consideration of service charges under LHA? I know I’ve read it somewhere but can’t find it now.

    Thanks

    #94622
    Anonymous
    Guest

    If I was you I would stick with the legislation, rather than the GM, in which case Regulation 13D (12) is usefull. It defines the “cap rent” as the aggregate of payments specified in regulation 12 (1) rent.

    #94623
    ctbaacf
    Participant

    Thank you.

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