Local Housing Allowance cap and supported housing

In the Spending Review the Chancellor outlined plans to cap the amount of rent that Housing Benefit will cover in the social sector to the relevant Local Housing Allowance (LHA).

The Federation has been working closely with ministers and officials over the past few months to influence this proposal and to reduce the risks posed by the possibility of the Local Housing Allowance cap being applied to supported housing. 

In September 2016  the Government announced details of its proposed model for future funding. The new system is planned to be implemented from 2019 and the Local Housing Allowance (LHA) cap will not apply to supported and sheltered housing until then.

  • From 2019 it is proposed to apply the LHA cap to all claims in supported and sheltered housing with a top-up paid by the local authority. 
  • There will be no Shared Accommodation Rate in the calculation of the LHA rate for tenants in the new system. The one-bedroom LHA rate will be used for people under 35 living in supported housing.
  • The Government believes a different system needs to be worked out for short-term transitional services and it will consult on this.