Date published: April 23, 2020
Changes to Local Housing Allowance (LHA) rates in response to Covid-19
Local Housing Allowance (LHA) is a rate that is used to calculate how much housing benefit someone should receive, or how much of the housing element of Universal Credit, if they pay rent.
On 1 April 2020, LHA rates increased to what is known as the ‘30th percentile point for rents.’ This means that people receiving housing benefit, or the housing element of Universal Credit, should now be able to afford rent for three out of every ten properties without having to top it up with their own money.
The government had previously stated that LHA rates would increase in April 2020 increase in line with the Consumer Price Index (CPI) rather than current market rates. However, the Chancellor Rishi Sunak announced that LHA would be further increased to the 30th percentile as part of the March 2020 package of measures to support workers during the coronavirus pandemic.
How might this impact people who are supported by Shared Lives?
How much of an increase to housing benefit or universal credit housing element people supported by Shared Lives will receive is dependent upon where in the country they live.
The increase of LHA rates will impact areas where rent has risen the fastest since 2012, excluding inner London where there is still a separate national ceiling on LHA rates. The changes to LHA rates will likely have little or no impact in areas where rents have stayed the same or only slightly increased since 2012.
If a person supported by Shared Lives is living in an area where the LHA will be increasing, then their housing benefit or housing element of universal credit will increase automatically. In other words, if a person supported by Shared Lives is receiving housing benefit, or the housing element of Universal Credit they do not need to apply to receive the increased rate.
Shared Lives Plus has heard from some Shared Lives schemes in areas where the LHA has increased who have consequently also increased the amount of rent paid to Shared Lives carers. This has in part has helped cover the increase in daily household costs incurred during the pandemic. Shared Lives schemes can check with their local council as to the rates of LHA in their area or on the Directgov website.
