Under the the new system, private tenants claiming housing benefit in Edinburgh and other pathfinder areas, will get a standard allowance called the local housing allowance, which is based on the area in which they live and the number of people living in their home. This could be more or less than the actual rent they pay. If it is more they keep the difference, if less they will have to make up the shortfall from other incomes.

The current housing benefits system has complex rules which contribute to rent arrears. In introducing the new scheme, the government aim to simplify complex rent restrictions and speed up the benefit system. The government hope that the new system will ensure that tenants and landlords know how much rent housing benefit will cover, and will allow tenants to shop around, and choose between paying more rent for a bigger or better home or keeping the extra and moving into smaller poorer accommodation.

For the first time tenants will receive their housing benefit directly (except in certain circumstances). The pilot system applies only to the deregulated private rented sector, and protections are in place to ensure that those tenants who are in receipt of housing benefit prior to 9 February do not lose out.

This paper outlines the key changes to the housing benefit system, and some concerns about the possible impact of these changes on Shelter's clients.