How LHA is calculated

LHA rates are based on the:[1]

• 'broad market rental area' in which the claimant lives

• 'category of dwelling' deemed appropriate for her/his household (ie the size criteria)

Housing benefit is calculated by reference to a claimant's eligible rent. Under the LHA scheme the eligible rent is equal to the flat-rate LHA that applies to the claimant.[2] A claimant cannot receive more in housing benefit than her/his actual rent, even if her/his actual rent is less than the applicable LHA rate. For further information about the stages involved in the calculation of a claimant's housing benefit see Calculating housing benefit.

There is also a cap on the amount of benefits that a working-age claimant and their household can receive. A claimant's housing benefit will be reduced to ensure that the total amount of benefits they receive is not more than the benefit cap level. For further information see  Benefit cap.

Each local authority area is divided into a number of distinct broad rental market areas (BRMAs). A BRMA consists of two or more distinct areas of residential accommodation, within which a person could reasonably be expected to live, containing accommodation of different types and various tenancies.[3] The local rent officer is required to define each BRMA. Once defined, the BRMA will apply to all properties falling within that area.[4] A unified definition of BRMAs applies in respect of both LHA and local reference rent cases (which had previously been determined by reference to rents in a 'locality').[5]

Once the BRMA has been defined, the rent officer determines LHA rates for different categories of dwelling in that area. Depending on the composition of the claimant's household a particular size of dwelling will be deemed appropriate.

Bedroom rules: general

The criteria used to calculate the size of property that a household requires is that there must be one bedroom for each:[6]

• adult couple

• other adult aged 16 or over, this could include a resident carer, lodger or child who is in the Armed Forces

• child who cannot share a bedroom due to her/his disability

• two children of the same sex

• two children regardless of sex under the age of 10

• other child

• (from 1 April 2017) member of a couple that is unable to share a bedroom because of a disability (for details see below).

A bedroom for a disabled person who cannot share will only be awarded where there is an additional room in the home available for her/him to use as a bedroom.

A room used for the storage of medical/special equipment is not to be counted as a bedroom under the regulations.[7] See the page Restrictions on eligible rents for social rented sector tenants ('bedroom tax') for more information about the definition of a bedroom.

Joint tenants who are not members of the same household qualify for a bedroom each. However, see 'Shared accommodation rate' below for how the LHA rate for a joint tenancy is calculated. Guidance on specific issues relating to joint tenants has been issued.[8]

The LHA bedroom calculator can be used to work out the number of bedrooms a household is entitled to.

Additional bedroom rules

An additional bedroom is allowed for a:[9]

• foster child (for details see below)

• a non-resident carer who provides overnight care (for details see below).

Where both categories apply, two additional bedrooms are allowed.[10]

There must be a 'spare bedroom' in the home in order for an additional bedroom to be allowed.[11]

Child in the Armed Forces

A bedroom is allowed if the claimant, or their partner, has a child or step-child who is in the Armed Forces and:[12]

• is away 'on operations'. This does not necessarily mean on duty outside the UK, it also covers pre-deployment training and post-operation leave (ie 'normalisation')

• had been a non-dependant when living at home

• intends to return to the claimant's home.

Foster children

An additional bedroom is allowed if the claimant or their partner is an approved foster carer, and they:[13]

• have a foster child is living with them

• are between placements and have fostered a child in the last 12 months

• became an approved foster carer in the last 12 months.

Only one extra bedroom is permitted regardless of the number (or sex) of foster children in the claimant's household.

Carers

A bedroom for a resident overnight carer living in the claimant’s home is allowed under the general rules set out above.

An additional bedroom for a non-resident overnight carer should be allowed when it is 'reasonably required' by a:[14]

• disabled claimant or her/his disabled cohabiting partner

• (from 1 April 2017) disabled child

• (from 1 April 2017) disabled non-dependant adult.

A bedroom will be 'reasonably required' if the non-resident carer 'regularly' stays overnight (this might be when care is provided by a team of carers).[15] Whether the bedroom is 'regularly' used is to be assessed over a long period, and it is not necessary that a carer stays overnight on the majority of nights.[16]

Disabled persons

In order to qualify for a bedroom for a non-resident carer or because s/he cannot share a bedroom, the disabled person must be in receipt of one or more of:[17]

• middle or higher rate care component of Disability Living Allowance (DLA)

• higher rate attendance allowance

• daily living component of personal independence payment (PIP)

• armed forces independence payment

If your client gets Adult Disability Payment, check with CPAG to see if they’re eligible for an additional bedroom. Your client may need to get specialist benefits advice from Citizens Advice Scotland.

Larger properties

The maximum LHA rate is for a four-bedroom property.[18]This cannot be exceeded even if a claimant:

• rents a larger property

• Is entitled to more bedrooms under the criteria used to calculate the size of property s/he requires.

Discretionary housing payments

A claimant can apply for a discretionary housing payment (DHP) to help make up a shortfall. The government has made additional funds available, some of which is aimed at disabled people living in accommodation that has been substantially adapted for their needs[19] For further information see Discretionary housing payments.

Single claimants aged under 35,[20] ie claimants who do not have a partner and are not a lone parent, are only entitled to the rate for a bedroom in shared accommodation, regardless of whether they live in shared accommodation or not, unless they fall within one of the exemptions (see below).[21]

Shared accommodation is where a claimant has the sole use of a bedroom, but shares at least a living room, kitchen or bathroom. This covers individuals sharing a house or flat, as well as bedsits or houses in multiple occupation where a bedroom may include a kitchenette but the bathroom is shared with other tenants in the building.

It is important to note that where a single claimant in fact lives in shared accommodation, the shared accommodation rate applies regardless of age. A single claimant aged 35 and over, or a couple of any age, may be assessed as qualifying for the shared accommodation rate unless they have:[22]

• exclusive use of at least two rooms (counting only bedrooms and living rooms, and regardless of whether other rooms are shared)

• exclusive use of one room and a bathroom, toilet, and kitchen (or cooking facilities).

Joint tenants

To have 'exclusive use' of a room means having the legal right to exclude anyone else from the room(s) concerned. This means that joint tenants who are not a couple, and who share facilities, are unlikely to qualify for the one bedroom rate as neither has the legal right to exclude the other from any part of the accommodation.[23] Joint tenants who are not a couple will each qualify for one bedroom at the rate for shared accommodation.

Exemptions

The exemptions are claimants:

• aged under 25 who had been subject to a care order when aged 16 or 17

• aged under 25 who were formerly provided with accommodation by social services under section 20 of the Children Act 1989 [24]

• who are severely disabled

• who have a non-dependant living with them

• who are approved foster carers who either have a child placed with them, or who have not had a child placed with them for no longer than 52 weeks. [25]

• homeless people over the age of 16 and under 35 [26] who had spent at least three months in a hostel (as defined in the regulations [27]) and have accepted resettlement support. The three month period does not have to be continuous, or in a single hostel, or immediately before the housing benefit claim is made

• victims of domestic abuse or modern slavery [28]

For those aged 25 or over only, there is an additional category of of exemptions:[29]

• ex-offenders who pose a risk of serious harm to the public and are subject to Multi Agency Public Protection Arrangements (MAPPA).

The LHA rates are fixed at the 30th percentile point for rents in each size category of dwelling (see above), as based on market rents paid by tenants who are not receiving housing benefit.[30] The rent officer compiles a list of LHA rates for each broad market rental area and each category of dwelling within that area up to the rate for a four-bedroom property. The LHA for a person living in a property that has five bedrooms or more is based on the four-bedroom rate.

LHA rates must be published by the local authority. Authorities should take steps to ensure that the up-to-date rates are brought to the attention of those who may be eligible.[31]

Normally LHA rates are set in January and take effect in April each year. Current LHA rates, by postcode and local authority, can be viewed at Gov.uk LHA Local Housing Allowance Rates.

Frozen rates from April 2016

For the period April 2016 to March 2020 the LHA rates are:[32]

• frozen at the April 2015 rates, or

• set at the 30th percentile point for local market rents, if this is lower.

This applies to properties of all sizes in all BRMAs, save for the exceptions below.

Exceptions for areas subject to high rent increases

From 23 January 2017, LHA rates in some areas are raised by 3 per cent to mitigate the effects of the rates freeze in areas where rents have risen the most steeply. Regulations list the areas concerned and state which types of property the 3 per cent rise will apply to.[33]

There is no right of appeal regarding the amount of the LHA rate, although an appeal can be made concerning the size criteria that has been applied to a claimant. The decision making process whereby a BRMA is drawn or the LHA rates are set could be challenged by judicial review

For more information see the section on Judicial review.

If a claimant is unhappy about the way that their claim has been processed, the Scottish Public Services Ombudsman (SPSO) is the final stage for complaints about local authorities in Scotland.  For more information about complaining to the SPSO, see the SPSO website.

The claimant's LHA rate is to be uprated annually, on 1 April or the first Monday in April, unless there has been a relevant change of circumstances, death of a linked person (see below), or a change of address.

Where there is an increase or decrease in a claimant's rent following the annual review and the rent is less than the LHA rate, this is to be treated as a change of circumstances, and the housing benefit varied (but to no higher than the applicable LHA rate).[34]

Linked person

A linked person is a:

• member of the claimant's family, ie her/his partner or dependent child/young person who is part of the claimant's household [35]

• relative of the claimant or her/his partner living in the same dwelling, unless the relative has a separate right to occupy the premises.