Tenants on Universal Credit face real terms cut to benefits as allowance frozen | Personal Finance | Finance
The allowance calculates the maximum amount a person renting from a private landlord can claim in Housing Benefit or Universal Credit. Some 844,000 households now pay rent which is above the maximum level for LHA, meaning they have to find the extra money to pay their rent.
Freezing the allowance means it will not keep up with increasing rent payments, meaning Britons on low incomes will have to find more money to cover their bills.
The DWP uses LHA rates to calculate Housing Benefit for tenants who rent from private landlords.
How much a person can get through the allowance will vary depending on their area and the size of the property they rent.
Other factors that affect a person’s LHA include their age, who they live with and their disability or care history.
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LHA rates are set for 12 months and change on April 1 each year. Work and Pensions Secretary Mel Stride promised to look “very closely” at LHA when he next reviews benefits, but he also said this will be “in about a year’s time”.
Express.co.uk has contacted the DWP for comment about the LHA being frozen.
A new rent applies to a tenant if they agree to pay it or if they sign an agreement for the higher rent.
Tenants may also want to note that the new rent will apply once they have paid the higher amount, even if they don’t sign a new agreement.
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Hard-up claimants can also get their first Universal Credit paid in advance if they need the money to cover their rent or other bills.
The advance payment can be for up to the entirety of a person’s usual payment and people can usually find out if they can get the advance on the day they apply.
The funds can be paid back in stages, with the first repayment coming out of the claimant’s first Universal Credit payment.
Universal Credit payments will increase by 10.1 percent next year, after Chancellor Jeremy Hunt confirmed payments would increase in line with inflation.
Exactly how much a claimant will receive with the uprated amount will depend on their circumstances but Britons on Universal Credit will see their rates increase by:
The standard allowance will go up from £265.31 to £292.11 for single people 25 and under
If a person is single and aged 25 or over, the standard allowance will increase from £334.91 to £368.74
Universal Credit for carers will rise from £168.81 to £185.86
The higher work allowance for those with one or more dependent children, or limited capability for work, will increase from £573 to £630.87, while the lower work allowance is going up from £344 to £378.74.
