The amount of Local Housing Allowance (LHA) that a tenant gets depends on a number of factors: the tenant's age, the tenant's household size and the area in which the property is located.
Single people who are aged under 35 who do not live with dependents will generally only be entitled to the Shared Accommodation Rate of Local Housing Allowance. This means that people who fit into this category will only be able to afford to rent a room in a shared property. This is due to a recent change in legislation. If you currently have a tenant who is in this age bracket, the tenant should have been informed by the Housing Executive of when this change will start to take effect.
Some single people under 35 will be exempt from this rule and eligible for self contained accommodation. You tenant could be exempt if he or she is:
- entitled to severe disability premium
- a person with dependent children
- a person aged under 22 who has been in care
- a person aged between 25 and 34 who is classed as a young offender and is believed to pose a risk of serious harm to others
- a person aged between 25 and 34 who has spent a total of at least 3 months living in hostel accommodation for homeless people and who has accessed rehabilitative or resettlement services while in a homeless hostel.
On reaching the age of 22, a care leaver will become subject to the 'shared accommodation rate', provided they are single and have no dependants.
Tenants who are single and over 35 will in most cases be entitled to the LHA rate for a 1 bedroom property. The Shared Accommodation Rate also applies to any tenant who is actually living in shared accommodation, regardless of their age.
The Housing Executive will assess the make up of an applicant's household and will pay a level of housing benefit appropriate to the property size required by the household.
The Housing Executive will look at the number of bedrooms only and will not take account of any other rooms in the property, such as kitchens, bathrooms and living rooms. In most cases, one bedroom is allocated for:
- every adult couple
- every other adult aged 16 or over
- any two children under 10
- any two children of the same sex
- any other child.
Tenants with disabilities or illnesses who require that regular overnight care is provided by someone who is not a part of the household may be entitled to an additional bedroom for a carer. The tenant will usually have to show that there is a genuine need for overnight care, that this care is actually provided and that there is a spare room available for a non-resident carer to use.
An additional room allowance should also be paid where 2 children who would otherwise be expected to share a room are unable to do so because of a disability. For this additional benefit to be payable the Housing Executive will require medical evidence to show:
- the nature and severity of the disability
- the nature and frequency of care required during the night
- and the extent and regularity of the disturbance to the sleep of the child who would normally be required to share the bedroom.
Broad rental market area
When LHA was introduced, Northern Ireland was divided up into 8 Broad Rental Market Areas (BRMA). The Housing Executive regularly analyses the market rents for each property type (up to 4 bedroom) in these areas and uses this figure to set the LHA rates. You should note that this regular analysis will stop in 2012 and LHA rates will be frozen. These rates will then be uprated each September in line with the Consumer Retail Index.
LHA rates are set at the 30th percentile of market rents in an area, so a tenant in receipt of LHA will only be able to afford 3 in 10 properties in a BRMA. Tenants can apply for a top-up payment, known as a Discretionary Housing Payment, but these are given as short term measures and should not be relied upon as a steady source of income.
You can find out what BRMA your property is located in and the maximum level of LHA in that BRMA on the Housing Executive's website.
Payments of housing benefit under LHA
All housing benefit is paid in arrears and is usually paid at fortnightly or four weekly intervals. This can cause a headache for landlords who are used to receiving rent in advance and in monthly instalments. However, neither you nor your tenant will be able to have this system changed to suit your needs.
It is essential that you keep accurate records when receiving housing benefit so you can make sure that payments are up to date.
Housing benefit is usually paid directly to the tenant. In certain circumstances, it can be paid to the landlord or managing agent:
- if the tenant has requested that payment be made directly to the landlord
- if the Housing Executive believes direct payment is in the best interests of the tenant
- if the tenant is 6 weeks or more in arrears.
It should take the Housing Executive no longer than 2 weeks to process a housing benefit application once all supporting information has been provided. If 2 weeks have passed and your tenant has still not received any benefit, the tenant can request an interim payment to tide them over. If the Housing Executive then decides that the tenant is not entitled to benefit or entitled to a lower rate of benefit, this interim payment must be paid back.
Landlords who receive housing benefit payments directly from the Housing Executive can choose to have notification of these payments sent to a secure email address instead of receiving them by post. If you'd like to avail of this service, complete the registration form on the Housing Executive's website.
Shortfalls in rent
It has become increasingly common for tenants in receipt of housing benefit to experience large shortfalls between the amount of housing benefit they receive and the amount of rent they are expected to pay. If your tenants find themselves in this position, you should weigh up the options. Although tenants may be able to find top up payments on a short term basis, they will probably not be able to sustain this over a longer period of time. Consider whether its better to reduce your rent slightly and keep a good tenant, or to find a new tenant and risk a couple of months' of voids.
In some cases, where there is a shortfall between the amount of rent you charge tenants and the amount of housing benefit they receive under the LHA system, the Housing Executive can authorise a short term "top up" payment, known as a Discretionary Housing Payment. Your tenant will have to apply for this and will have to prove to the Housing Executive that they have investigated other options of making up the shortfall, including negotiating with you for a reduction in rent.