Government Emergency Budget - LHA Capping (DWP press release)

In the Emergency Budget on 22 June 2010, the Government announced the following changes to the Local Housing Allowance:

From April 2011 we will:

► remove the five bedroom Local Housing Allowance rate so that the maximum level is for a four bedroom property.

► introduce absolute caps so that Local Housing Allowance rates cannot exceed:

£250 for a one bedroom property,
£290 for a two bedroom property,
£340 for a three bedroom property,
£400 for a four bedroom property.

In addition, the £15 weekly excess that some customers can receive under the Local Housing Allowance arrangements will be removed. This change was first announced by the previous administration in Budget 2009 but they subsequently decided to defer it until April 2011.

From October 2011 we will:

► set LHA rates at the 30th percentile of rents in each Broad Rental Market Area rather than the median.

The Coalition Government has also announced that it will triple its contribution to local authorities’ funding for Discretionary Housing Payments. This is currently £20 million a year, and will increase to £30 million in 2011/12 and then to £60 million a year from 2012/13. In discussion with local authorities, we intend to target these resources to give extra support to areas where the impacts are greatest. It will give authorities more flexibility to provide additional support where it is most needed. For example, this could provide either a transitional safety net for customers who need to find alternative accommodation or longer term support for customers who are less able to move.

The Government also announced the inclusion of an additional bedroom within the size criteria used to assess Housing Benefit claims in the private rented sector where a disabled person or someone with a long term health condition has a proven need for overnight care and this is provided by a non-resident carer(s).