Local Housing Allowance (LHA) – In what situations can it be paid DIRECT to the landlord?
There are many ways that LHA can be paid direct to a landlord, most of which are considered to be ‘Safeguarding’.
Another way is where the landlord reduces the rent to the same level of local housing allowance, applicable to the size of the property. But not all councils will accept this and I predict that within a year a further reduction may be sought if a new application for LHA is submitted.
There are several ways in which representation can be made to the Local Authority to consider payment of LHA direct to the landlord under safeguard rules. The representation could be:
- Indicated on the claim form by the claimant;
- Flagged by the Landlord;
- Identified by Customer Service Staff within the council;
- Identified by a Support Group that is or has been helping the claimant;
In order for this to be considered the council would need the form ‘Application for Direct Payment of Local Housing Allowance’ to be completed (this can be found on government websites). As well as this the council will have to investigate and request any evidence to back up the application.
If the claimant is considered to be an unlikely payer there are discretionary and mandatory grounds for direct payment.
If a claimant is considered to be “vulnerable” and cannot manage their own affairs/finances. This is also known as ‘safe guarding’.
In order for this to be considered there would have to be substantial proof showing that the claimant consistently does not pay their rent and will use their rent to fund various aspects of their life style.
The tenant could be an alcoholic, not the best of tenants, but many landlords do have them.
If the claimant is in 8 weeks arrears with their rent. In order for this to be considered the council would need to see documented proof of the 8 week arrears. The council may make their own investigations into the reason for the arrears.
Reduction in rent to LHA rate
Since April 2011 the rules surrounding direct payment of LHA to landlords have expanded to allow the Local Authority to pay LHA direct to landlords if the landlord is willing to reduce the rent to the Local Housing Allowance rate applicable to the size of the property/tenant. Once the direct payments are being made under this rule it will continue until the rent becomes unaffordable. Existing tenants will need to confirm that there has been a genuine reduction in the rent. New tenants will need to show that the rent has been reduced and is affordable or the tenancy agreement would not have been granted without direct payments and the rent is again affordable. Please remember that the intension of this is to exert downward pressure on the amount of LHA awarded within the broader rental market. If all landlords reduce down rents to secure direct payment ultimately they will see a reduction in the LHA rates the following year!
It’s always best to apply for direct payment under a discretionary ground and fight for a continuation without review to ensure that rental yields are maintained with direct payment secured.
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