Housing Benefit Cut: Will You Have to Move?

On the 1st April a dramatic shake up of the Housing Benefit system starts. It will see almost every household currently in receipt of Local Housing Allowance (LHA) have their benefits cut.

If you're you going to be affected you need to act fast if you want to prepare for the inevitable.

Here's what you need to know:

Who will be affected?

The changes will affect every household that claims Local Housing Allowance. This is a benefit paid to individuals on a low income who live in privately rented accommodation.

Those that rent from a housing association or local council won't be affected. Neither will most households that started claiming help with rent costs before 2008 and haven't since changed their circumstances.

What's changing?
 

An end to weekly excess payments
This is a benefit currently paid to households whose rent is lower than the housing benefit rate set for their area. It's currently worth up to £15 a week but will be stopped as of the 1st April.

A stop on claims for 5 bedroom properties
From 1st April claims will no longer be paid for rent on 5 bedroom properties. Instead, the maximum payment available will equal the Housing Benefit paid to those living in a 4 bedroom property.

A cap on payments
A weekly cap on the amount that can be claimed towards rent costs will be applied to all properties. The maximum claim will be dependent on the number of bedrooms in a property and is as follows:

• 1 bedroom: £250 a week

• 2 bedrooms: £290 a week
• 3 bedrooms: £340 a week
• 4 bedrooms: £400 a week

A change in the way LHA is calculated
At the moment Local Housing Allowance rates are set so that 50% of properties in an area will be affordable to those in receipt of the benefit. However, from 1st April rates will be reduced so that only 30% of properties in an area will be affordable to those on housing benefit.

Extra bedroom space for overnight carers
Individuals who are registered disabled and in receipt of LHA will be entitled to claim for additional bedroom space if they need overnight care from a non-residential carer.

When will the changes take effect?

When you'll be affected by the changes depends on your circumstances now.

• Households placing a LHA claim after 1st April will be subject to the new rules right away.
• Existing claimants that move house or experience a change in circumstances after 1st April will be affected immediately.
• Existing claimants that don't experience a change in circumstances will be affected by the changes 9 months after the anniversary of their claim (the date they first started claiming LHA). The exception to this is the weekly excess payment which will be stopped on the next anniversary of their claim.

How can I find out how I'll be affected?

If you receive housing benefit your Local Housing Association will have written to you explaining the changes and outlining how you'll be affected. If you haven't received a letter you should contact your Local Housing Association right away.

You can also use this Housing Benefit Update tool to check what's changing in your local area. Information about the new payment rates are also listed on the Scottish, Welsh and English government websites.

What can I do about it?

If you're going to be affected by the cuts it's important to prepare yourself financially. You should:

1. Register any change in your circumstances before 1st April
2. Find out how much you stand to lose
3. Work out whether you'll still be able to afford to live in your current home
4. Speak to your Local Housing Authority to discuss your options
5. Speak to your landlord to negotiate on the cost of your rent
6. Cut back your spending and budget so you can cope financially with the drop in income
7. Check you're on the best energy tariff and that you're not paying any more than you need to for other utilities like water, broadband and your home phone.