HARD-UP households on Universal Credit are facing a real terms pay cut after the government confirmed it won’t be reviewing payments.
A number of benefits will rise from next April in line with inflation for September this year – 10.1%.
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Chancellor Jeremy Hunt announced the news in his Autumn Statement in the House of Commons in November.
But the 10.1% rise from next April won’t apply to all benefits – including Local Housing Allowance (LHA).
LHA was introduced in 2008 and calculates the maximum amount people renting from a private landlord can claim in Housing Benefit or Universal Credit.
Work and Pensions Secretary Mel Stride promised to look “very closely” at local housing allowance (LHA) when he reviews the benefits next.
But he said the next time he will look at the allowance would not be until “in about a year’s time”.
Around 844,000 households now have rents above the maximum level that LHA will cover.
Shadow work and pensions minister Karen Buck told the Commons that 59% of private renters on Universal Credit have rents above the maximum.
She said this means households “have to make up the difference by either reducing spending on other necessities like food and heating or else getting into arrears at risk of homelessness”.
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A government spokesman told The Sun: “During the pandemic we increased Local Housing Allowance significantly and beyond inflation, benefiting over one million households by an average of over £600 over the year.
“We’re maintaining that boost, keeping support for private renters above pre-pandemic levels.”
What is Local Housing Allowance?
Local Housing Allowance (LHA) was introduced in 2008 and calculates the maximum amount people renting from a private landlord can claim in Housing Benefit or Universal Credit.
What you get through the allowance will depend on the area you live in and the size of your rental property.
LHA rates are set for 12 months and change on April 1 each year.
However the rate from next April will be the same as it currently is.
That means the way your Housing Benefit or Universal Credit allowance is calculated will stay the same – although people will receive different amounts depending on their circumstances.
How much could I get?
LHA rates are based on rents being paid by people with the same number of bedrooms as the property where you live, or the number of rooms you and your household needs.
You can check the LHA rates for you, based on the area you live in.
You can also check how many bedrooms you may be eligible for, based on the number of people in your household.
What other help is available?
One-off payments
Local councils are sitting on millions of pounds in unspent cash which has been provided to help struggling renters.
The government announced in October last year that £65million of extra funding would be available to those on low incomes in rent arrears.
Money is given to renters on a case-by-case basis by each local authority, what you can get varies depending on where you live and your financial situation.
Discretionary Housing Payment
Available to those receiving Housing Benefit or the housing element of Universal Credit, the Discretionary Housing Payment can help cover housing costs such as putting down a deposit.
Money is given out on a case-by-case basis, often when your housing benefit is not enough to cover your rent or you’re moving home and need a deposit or rent advance.
The amount you may get is decided on a case-by-case basis, and may be a one-off lump sum or regular payment.
Local councils decide what’s given out in their area, but each only has a certain amount of funding available to dish out so it’s always better to apply soon rather than later.
Household Support Fund
The Household Support Fund was launched in October 2021, and was a £500million pot dished out to local councils to help struggling households in their area.
And a new round of £421million funding has given by the government to the Household Support Fund.
That means there’s more help available than ever before, so it’s well worth finding out what’s on offer from your local council.
Each local authority decides how much cash to give out and who is eligible. For example, some offer free school meals vouchers while others will give money towards energy bills.
But some will offer free cash grants which could be put towards your rent if you’re struggling.
Find out which is your local council using the Government website, and get in touch to see what you might be eligible for.
The Welfare Assistance Scheme is a similar programme, offering free cash, food vouchers and bill help – and some local authorities may put money towards your rent.
Talk to your landlord
If you are struggling to keep up with your rent, speaking to your landlord is an important step.
It’s worth flagging in advance that you’re having problems rather than waiting until you’re in arrears.
The landlord might be able to discuss a payment plan for you, or possibly consider reducing your rent for a period.
You can also contact debt charities for help and guidance such as National Debtline, StepChange and Citizens Advice.
