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From  HB/CTB A8/2012<

Changes to Housing Benefit Regulations to support Local Housing Allowance Consumer Price Index (CPI) uprating from January 2013

 

Introduction

 

1.    The Housing Benefit (Amendment) Regulations 2012 that were laid before Parliament on 28 June 2012, as well as introducing size criteria into Housing Benefit (HB) for working age claimants in the social rented sector, also contain two provisions to help support the administration of the Local Housing Allowance (LHA) Uprating by the Consumer Price Index (CPI).

 

2.    The draft regulations and the explanatory memorandum can be viewed free of charge on the Office of Public Information website, via the following links:    

 

http://www.legislation.gov.uk/ukdsi/2012/9780111525784/contents<

       http://www.legislation.gov.uk/ukdsi/2012/9780111525784/pdfs/ukdsiem_9780111525784_en.pdf<

 

 

Background

 

3.    The Government’s plans to uprate LHA rates in line with CPI inflation, instead of being set every month in line with local rental growth were announced by the Chancellor in the June 2010 Emergency Budget.

 

4.    Changes to the Rent Officers (Housing Benefit Functions) Order 1997 and Rent Officers (Housing Benefit Functions)(Scotland) Order 1997 took effect from 2 April 2012 and allowed for the introduction of the uprating of LHA rates by CPI.  This means that from April 2013, LHA rates will be set annually at the lower of:

 

·      The previous LHA rate uprated by the previous September’s CPI or

·      The 30th percentile of local market rents in the previous September

 

5.    These amendments were covered in Statutory Instrument 2012 number 646 and the Order and supporting Explanatory Memorandum can be accessed via the following link:  http://www.legislation.gov.uk/uksi/2012/646/contents/made<

 

The policy intention

 

6.    This policy change was part of a larger package of reforms to control HB costs, most of which took effect from April 2011 and is intended to build on the measures introduced  in 2011.

 

7.    Uprating of LHA in line with the CPI figure will bring stability and ensure expenditure in the private rented sector is contained at a reasonable level.  It will also bring HB into line with the annual uprating of other benefits and the integration of housing support within Universal Credit.

 

8.    Annual uprating makes LHA simpler for claimants to understand and easier for people to plan for the future when they know the maximum amount of HB that will be available for the year ahead.

 

 

9.    To help those claimants who are left with a shortfall if their rent increases mid-year, we are introducing a new provision in Housing Benefit regulation 13C.  This will allow for a change in rent to be treated as a change of circumstances that triggers a new determination of the maximum rent (LHA). Where the rent increases but is already above the LHA rate, no new determination of a maximum rent is required.  Additionally there is no incentive for a landlord to continually increase rents as LHA rates only change annually.

 

 

Removal of anniversary dates

 

10.The move to annual CPI uprating of LHA rates from April 2013 means that the current process for reviewing the LHA at the anniversary date of claim is no longer a requirement. This is because all claimants will have their benefit assessed each April when the new rates take effect and the anniversary date will become superfluous.  Setting the rates annually also provides an opportunity to simplify the current review arrangements.

 

11.To achieve the uprating from April, reference to anniversary dates in regulation 13C(3) has been replaced by a reference to 1st April in any year. The Housing Benefit and Council Tax Benefit (Decisions and Appeals) Regulations 2001 have been updated to ensure that such changes take effect from the same date as all other uprating takes place in HB (1st April or 1st Monday in April).

 

12.The provision for reviews at the anniversary date will be abolished from January 2013.  This proposed start date is to avoid claimants having two re-assessments of their LHA close together, for example if their last anniversary date was in the period January to March 2013. Some examples of how this will apply to claims are included at the end of this circular.

 

Increase or decrease in rent

 

13.Also included in the regulations, is a provision to review LHA cases where there has been a change in rent since the annual review, either an increase or a decrease. This is to avoid the situation where tenants could be faced with a shortfall in meeting their rent until their case could be reviewed the following April.  It also means having a system that responds quickly to changing circumstances, allowing rent information to be updated during the year.  This provision will be introduced from April 2013.

 

 

 

 

 

 

Impact on local authority processes

 

Changes to IT systems

 

14. We have discussed these two changes to regulations with IT suppliers at the regular forums which DWP holds.  These are being taken on board alongside the changes needed to support the introduction of size criteria into the social rented sector. 

 

Notifying claimants and landlords of the changes

 

15. Local authorities should notify all those claimants who have an LHA anniversary date between January to March, that their LHA will not be reviewed until April alongside all other cases

 

16.Additionally, all other LHA claimants and landlords will need to be notified of the new arrangements and advised that in future, their LHA will be reviewed in April each year and LHA rates will no longer change month on month, but will be subject to an annual review only.

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