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Under 25 Care Leavers & The Shared Accommodation Rate

Posted by Natalie Pearson 05/12/19

The Shared Accommodation Rate of Local Housing Allowance (LHA) reduces the amount of Housing Benefit or Housing Costs Element of Universal Credit a single person under the age of 35 can claim for a private rented property. This was extended in January 2012 from those aged 25 and under.

There are a few exceptions to this rule in both Housing Benefit and Universal Credit claims, including claimants under the age of 22 who were formerly in social services care. Care leavers up until the age of 22 will receive the one-bedroom self-contained rate 1.

However, when care leavers reach the age of 22 they will fall within the definition of single claimants aged under 35 and will then be subject to the shared room rate 2.

There are further exceptions to this rule, ones that may benefit care leavers who reach the age of 22;

  • For Housing Benefit claimants any claimant who is in receipt of the Severe Disability Premium (SDP) in their benefit claims will be exempt from the Shared room rate and will receive a self-contained one-bedroom rate 3.
  • For those in receipt of Universal Credit who are under 35 and in receipt of the mid or high care component of DLA or daily living component of Personal Independence Payment. This is different and somewhat more beneficial than the Housing Benefit rules above as it won’t matter if there is someone claiming Carer’s Allowance / Carer Element of Universal Credit for looking after them. However, the loss of the SDP could be a financial dis-advantage for the claimant.

A sudden shortfall of the housing costs can put some care leavers in a position where rent arrears could accrue quite quickly. This can be particularly exacerbated as there is no guarantee that a Discretionary Housing Payment application will be accepted. The short nature of any application that is granted may not give the greatest safeguard to prevent rent arrears from accruing.

If care leavers do not downsize to shared room accommodation, negotiate their rent with the landlord, or are lucky enough to find suitable, self-contained and affordable accommodation, they are likely to struggle financially with such a large decrease in income.

Care leavers are entitled to various types of support until they reach the age of 25. Generally, this is provided in the form of a personal adviser, they can also be exempt from paying Council Tax up and in some cases obtain ‘moving on’ grants of up to £2000.

The 2014 Children & Families Act also introduced the ‘Staying Put’ duty. This requires local authorities to support young people to remain with their former foster carers to age 21 where both the young person and carer want the arrangement to continue.

Moving into independent living in the private rented sector is likely to be difficult for a care leaver, particularly those leaving accommodation under the staying put duty. Care leavers at the age of 21 will only have one year before the LHA rate is reduced to the Shared Accommodation Rate.

For some this may add to their already fragile and fledgling budgeting skills. Their landlords may not be negotiable to a new agreement or agree for any arrears to be repaid back over time. This could lead to, where applicable, a section 21 notice being served.

Under the 1996 Housing Act certain former care leavers under the age of 21 are automatically in priority need when it comes to homeless application. However those over the age of 22 are not automatically in priority need, and the local authority will have to make a decision as to whether they are deemed to be a vulnerable person.

There is no guarantee such an applicant will be found to be vulnerable, and the likelihood that under any prevention or relief duty brought in by the Homeless Reduction Act 2017 is that further private rented accommodation will be sourced as ‘suitable’ accommodation to discharge the respective duty into.

Care leavers may require self-contained accommodation due to the issues they have experienced in the past, and to help them function independently. It is therefore possible that they could end up in a cycle of continually living in unaffordable or otherwise unsuitable accommodation.

Could this be something that raising the LHA rate to 25 for care leavers alleviate? Perhaps in some cases it may just be delaying the inevitable, but it arguably would allow for a more stable support plan to be put in place to allow a care leaver to build up the skills required to manage their affairs better.

Until then, what can be done practically?

If a claimant is in receipt of Universal Credit, there are two things to check.

  • The first is whether they are entitled to the mid or high care component of DLA or daily living component of Personal Independence Payment. If an application can be successfully made, then they will be entitled to remain on the self-contained one-bedroom rate.
  • The second check to be made is not as clear, and specialist benefits advice will be required. A claimant may be entitled to transitional protection under the proposed Universal Credit (Managed Migration Pilot and Miscellaneous Amendments) Regulations 2019.

However, on the 3rd May 2019 a High Court judgement was published. This ruled that planned transitional payments for those who have lost their SDP are unlawful. It was held that the proposed flat rate is unlawful as it will be less than the amount retained by not having to go onto UC, for those protected by the “SDP Gateway” from 16th January.

The regulations already in force since the 16th January 2019 created a new ‘Gateway Condition’ that meant that no-one who would lose the Severe Disability Premium on claiming Universal Credit could make a new claim until the claim is migrated under managed circumstances. In these circumstances they will remain on legacy benefits, including Housing Benefit.

If a claimant is in receipt of Legacy Benefits, then a check to see if they are in receipt of or entitled to the SDP should be made. This will not only protect them from moving onto Universal Credit but will ensure that they remain on the Self-contained one-bedroom rate of LHA.

By Gerard Hunter, NHAS Consultancy Line Adviser
The NHAS 2nd tier consultancy is available for all housing, housing debt and benefits issues. You can call the consultancy line on 0300 330 0517 for advice. If you’d like to access free training courses head to our training pages.

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