Private tenants face housing benefit shake-up

Home > News and Events > News - release archive > 2008 > April

Renfrewshire Council is urging private tenants to make sure they have a bank account in the wake of major changes to the way housing benefits are worked out and paid.

The Government's Department for Work & Pensions introduced changes on Monday 7 April for private tenants. The new rules will be phased in and will initially only affect tenants making a new claim, tenants who move to a different address and tenants who have a break of one week or more in their claim.

Under the new rules, housing benefit will now be paid directly into tenants' bank accounts rather than to their landlord. There is also a new way of working out how much benefit a tenant gets.

A flat rate, the Local Housing Allowance (LHA), is now used to calculate how much benefit is paid. It's based on the rent that most people pay in the area. The LHA is set by the Government's rent service each month.

Under the new rules, local authority areas are also being divided into Broad Rental Market Areas (BRMA). The same rent is paid for the same type of home in each BRMA. Renfrewshire is classed as one large BRMA so the same benefit would be paid for a two bedroom flat in an expensive area and in a less desirable area.

If a tenant's rent is less than the LHA, they will be able to keep any extra money (up to a maximum of £15 per week). But if their rent is more than the LHA, they will normally have to make up the difference.

The changes don't apply to council and housing association tenants; people with a registered 'fair' rent; tenants who live somewhere where care, support or supervision is provided; or tenants whose tenancy started before 1989.

Councillor Brian Lawson, convener of the housing and community safety policy board, said: "These changes have been introduced by the Government and not the council. Private tenants are facing major changes in the way housing benefit is worked out and paid. I would urge them to make sure that they have set up a bank account so that they aren't caught out by the new rules."

"We are preparing information packs for everyone who is affected by the changes and we are working with the Renfrewshire Wide Credit Union, and the council's own Advice Works, to offer help and advice with setting up bank accounts and debt management."

The aim of the changes, introduced by the Department for Work & Pensions, is to simplify the existing system and make tenants responsible for budgeting and paying their rent.

You can download copies of the following guides to help you understand the new system:

A guide to Local Housing Allowance (pdf - 118Kb)
Basic Bank Accounts - what you need to know (pdf - 158Kb)

You need Adobe Acrobat Reader to view these documents. Download Acrobat Reader here.

Press release: Thursday 10 April 2008