LHA - Help Required Please

SWImperial

Dear MoneySavingExpert Forum users,

I am having trouble understanding the Tax Credit and Local Housing Benefits system.

Back in April (the 2nd) I finally managed to find a job in London. I had been unemployed for the previous 3 years, but did not claim any state benefits as I was living with parents and on savings. I am 25 years old.

I am currently being paid £20,000 a year and also have a student loan of about £17,000.

I am looking at renting a flat in the BRMA area of Central London (or Inner West London - but Central is a first preference as it is where I work). At the moment I am staying with a friend on his floor for free - but need to move quite soon.

I can't get my head around the system and the calculators on different websites seem to give different outcomes.

I understand that the Shared Accommodation rate for Central London is £123.50 per week.

Also, I looked at the Tax Credits situation, and because my income went up from £0 (because I was unemployed) to £20,000 then that is an over £10,000 increase and therefore I would not get £50+ a week but more like £23.50 per week. Is that the case? Some calculators suggest on £20,000 a year I could get £23ish per week, some suggest I am not entitled to Tax Credits at all.

I should say here that I don't have any dependents/children and don't claim any other benefits so far.

Also, on £20,000 a year, am I even entitled to some or all of the £123.50 Local Housing Allowance. Again, some calculators say yes, others miss it out.

Furthermore, my final question regards Landlords and Local Housing Allowance. I have found and viewed a number of Central London properties for rent. On the Agency and websites it makes no mention of the Landlord being against people claiming LHA. Obviously any such LHA claim would take place after I had signed the agreement. My question is, can a Landlord, once I have signed the agreement, and I then apply for LHA, then turn around and say, "no, I don't want LHA renters" and then kick me out or break the contract - or indeed, not help with the whole process? (If I am even entitled to LHA).

Also, I have less than £6,000 savings - particularly after I would have to pay a deposit for a flat. Also, renting is more than £123.50 per week, so if entitled, I know I would have to pay the difference.

So, to recap:

1) On a £20,000 income can I claim Tax Credits and, if so, at what rate?
2) On a £20,000 income can I claim Local Housing Allowance in Central London? Has anyone here for example been on more than £20k and claimed LHA?
3) Can a Landlord refuse an LHA claimant after the contract has been signed (see above).

Your help is much, much appreciated! Thank you.

pmlindyloo

You earn too much for tax credits and/or LHA and CTB/

See here for the tax credits:

http://www.hmrc.gov.uk/leaflets/wtc2.pdf

Sorry for the bad news.

You will have to do a very careful budget if you intend to rent in central London.

Post back if you need further suggestions.

earthbound_misfit

It might be better to live in Greater London and commute with some kind of season ticket (there used to be something called a gold card that was about £1000/yr but you could travel on all London transport any time all year... not sure how much it costs now though...)
This also means you can shop around a bit in different areas for somewhere to live... Outer west london is quite expensive but slightly further out is cheaper and with a commuter train barely different in travelling time.
Of course commuting has its drawbacks but then so does living in central London. Personally I rather enjoyed the walk to the station and train journey as time to think without having to DO anything, although with laptops and things maybe it's less like that now!

(source: first 18 yrs of life in London's suburbia)

earthbound_misfit

oops - as for the landlord kicking you out... theoretically they can't kick you out after you've moved in and the agreement has been signed UNLESS you have lied to gain the contract. If the landlord has asked specifically if you are going to get LHA and you've lied they can make you leave. It seems a bit of a grey area if they haven't asked but might be witholding information? *can anyone clarify?*
However, your landlord wouldn't need to help with the claim, you just need a tenancy agreement to show the LHA office. They will want to know if it's ok to contact your landlord and you can say no (I'd explain why though).
I have done this myself; I think my landlord has realised I'm on benefits now but as I am a model tenant in other respects he doesn't mind. But this is a run-down flat in the north, not a sought-after central London property!

BigAunty

The Turn2us online benefit calculator has a reputation for accuracy. Let us know what it says.

Housing benefit is based on income and capital so while you have savings under the 6k threshold that starts to affect it, it will take into account your salary and therefore the LHA will be either significantly reduced or wiped out by your salary.

Personally I never knew any grads on 20k living in zone 1 but I knew plenty in north, south and east london.

You will not get the full LHA rate when you earn almost twice the rate of the National Minimum Wage. Even those on the NMW find they have to usually have to pay something towards their rent.

Your debts are irrelevant to benefit entitlements.

Other options for cheap rent including moving out a zone or four with a quick commute which might halve or more your accommodation costs and the gain isn't wiped by the travel fares. Use the transport for london journey planner to identify the quickest direct routes into your place of work. For example, Walthamstow is in zone 5 but the tube takes just 20 mins to get to oxford street for example and there are places in south london with direct train or bus routes into the City or central areas.

Other options might include something like being accepted for property guardianship (see the camelot site) where you pay token rent to live in an empty property like a factory or church or care home. Seeing if you can get a place in housing cooperative or similar, though you have to share the same values and lifestyles as the other occupants though I guess both these are fairly popular options.

BigAunty

SWImperial wrote: »

...

Furthermore, my final question regards Landlords and Local Housing Allowance. I have found and viewed a number of Central London properties for rent. On the Agency and websites it makes no mention of the Landlord being against people claiming LHA. Obviously any such LHA claim would take place after I had signed the agreement. My question is, can a Landlord, once I have signed the agreement, and I then apply for LHA, then turn around and say, "no, I don't want LHA renters" and then kick me out or break the contract - or indeed, not help with the whole process? (If I am even entitled to LHA).


..
3) Can a Landlord refuse an LHA claimant after the contract has been signed (see above).

.

LHA is paid directly to the tenant so the landlord should not be notified of their claim.

A landlord usually serves an S21, the most common way to end an agreement. It's known by nickname as a 'no fault' notice. The landlord does not require to give a reason via this route.

So even if they discovered or suspected that you were claiming LHA, they wouldn't have to justify serving you notice.

See the Shelter website to understand how the notice/eviction process works for tenants.