How should I set the rental fees in Shared Lives arrangements?

It is for the Shared Lives carer, and the person they support, to establish these fees at the beginning of the match, and when the license agreement is renewed annually. Shared Lives schemes should facilitate the signing of the license agreement with the principles of fairness and reasonableness in mind.

The rates set out on the license agreement must be fair and reasonable to both parties, so that:

1. The Shared Lives carer is receiving a reasonable amount for their room, and
2. The supported person, who often has only their benefits to pay this contribution, and who might be less resourced to judge value for money, pays a fair rate.

Because people supported in Shared Lives usually have only their benefits from which to pay rent, schemes could use the Local Housing Allowance (LHA) as a guide rate. The LHA rate is what the DWP calculates as the maximum sum it will award to claimants for housing support in a given area. Schemes can propose this rate on the template license agreement, and should check it annually, because the rates are liable to change.

However, schemes should be aware of the different rates of LHA. The two relevant for Shared Lives are:

• the one-bedroom self-contained (1B) rate, which is higher and based on the cost of renting an entire one-bed flat, and
• the shared accommodation (SA) rate which is lower and based on the cost of sharing a flat and having exclusive use of only their bedroom

Most people supported in Shared Lives who receive Universal Credit (UC), will receive the 1B rate. This is because UC is administered in an automated way and is calculated from the number of rooms a claimant is eligible for. People in Shared Lives are likely to be eligible for the 1B rate through their receipt of disability living allowance, being a care leaver, or being over 35. (For a full list of criteria exempting a person from the lower shared accommodation rate, see here under “If you’re under 35 and live alone.”

For those in receipt of the legacy Housing Benefit (HB) however, there is no guarantee that they will receive the 1B rate. This is because HB is administered using more human discretion and decision-making, and crucially considers the type of accommodation that the claimant is living in. Legislation defines 1B accommodation as:

“(b) a dwelling where the tenant (together with his partner where he has one) has the exclusive use of only one bedroom and exclusive use of a kitchen, a bathroom, a toilet and a room suitable for living in”

 This indicates that Shared Lives situations will likely be considered SA instead. In arrangements in which a supported person receives HB, Shared Lives schemes can still propose the rental amount at the 1B rate of LHA initially but should let both the supported person and Shared Lives carer know from the outset that this may not be awarded.  Where it is not, we recommend that the rental sum on the license agreement is revised to match the sum that is awarded.