From April 2008 the rules governing Housing Benefit are due to change. Housing Benefit is to become the Local Housing Allowance and this will be paid on all new claims made from April 2008.

Entitlement is still dependant on work/savings and family number of the applicant. There will no longer be any Pre Tenancy Determinations provided. The Rent officers will create from known rent levels, broad rental market levels and the applicable figures will be published monthly in advance. Levels of Rent in the open market can vary depending on demand and quality of housing stock and this will be reflected in the level of Housing Allowance offered in the different zones and bands created by the Rent Service.

Tenants who are for instance entitled to the Local Housing Allowance applicable in the area they have chosen to live for a 3 bedroom House, may, if they so choose, elect to squeeze their family in to a two bedroom property and pay the lower rent - pocketing the difference in the allowance. This was not noted to be a large problem in the trial areas over the last three years.

The major change for many landlords is that the new Local Housing Allowance is to paid direct to the Tenant by the BACs system and then it will be up to them to pay to the landlord by the due date. Landlords will only have the new Local Housing Allowance paid direct to them if the Tenant is deemed to be vulnerable or they can be shown to be in arrears of 8 weeks or more. We are assured by the Benefits Agencies that it is their policy to sustain Tenancies and if arrears are reported immediately their is sufficient flexibility in the system to get payments altered to make direct payment to the landlord even temporarily until the matter of the arrears is investigated. This could of course vary from Local Authority to Local Authority.

We recommend that Landlords:

1. Rigorously reference and select applicants

2. Ensure that Tenants understand how the Local Housing Allowance Works

3. Encourage Tenants to set up a Standing Order for Rent payments.

4. Maintain good communication throughout the Tenancy.

5. Never miss monitoring the rent due dates.

For further help and advice on this subject do not hesitate to call on us.