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New LHA rates
Can anybody give me a quick answer, please?
I’m looking at the new LHA rates from 6 April 2019, published by VOA. Am I right in saying that the actual LHA rates are the weekly ones (i.e. the monthly figures in the VOA’s published tables are just their indication of what the monthly equivalent is)? And so in UC, the LHA has to be converted from weekly to monthly?
Supplementary questions may follow.
I think the answer is that they are both the actual rates. The weekly ones would be used in HB and the monthly ones in UC.
Can anybody give me a quick answer, please?
I’m looking at the new LHA rates from 6 April 2019, published by VOA. Am I right in saying that the actual LHA rates are the weekly ones (i.e. the monthly figures in the VOA’s published tables are just their indication of what the monthly equivalent is)? And so in UC, the LHA has to be converted from weekly to monthly?
Supplementary questions may follow.
The monthly rates in the VOA tables are calculated as weekly/7*365/12. As far as I know UC uses the less accurate weekly*52/12 calculation which gives a monthly amount slightly below the monthly figures in the table.
For a £100 weekly amount the difference is £1.19 in the monthly amount - £433.33 rather than £434.52.
[ Edited: 21 Mar 2019 at 11:41 am by Jeremy Barker ]Thanks Andy, I think you’re right, but…
1. The webpage where the LHA tables live says “LHA Rates are weekly, the monthly figures are for illustrative purposes only and have been converted from the weekly rates.”
https://www.gov.uk/government/publications/local-housing-allowance-lha-rates-applicable-from-april-2019-to-march-2020
2. The explanation in the tables says, “Note: LHA Rates are a Weekly Rate, Calendar Monthly Equivalent figures are included for information purposes only.”
3. I have a UC payment statement in front of me which says my client only gets £663.07 (actual rent is £1,000). The weekly LHA rate is £153.02. The monthly equivalent on the VOA list is £664.91.
£664.91 is £153.02 x 365/84
£663.07 is £153.02 x 52/12 (i.e. how UC convert weekly rents to monthly)
So I have looked at what the regs say and this is what I’ve found:-
UC Regs just refer to using LHA rates calculated in line with Art 4 of the Rent Officers Order 2013 (SI 2013/382).
Art 4 of the Order says that LHA is calculated in accordance with Sch 1.
Para 3 of Sch 1 sets out how to calculate the 30th centile level. Essentially it is a case of listing the rents in order and then picking the one 3/10 of the way from the bottom. Para 3(8) says:-
“(8) Where rent is payable other than monthly the rent officer must use the figure which would be payable if the rent were to be payable monthly by calculating the rent for a year and dividing the total by 12.”
So, it would seem that the VOA is required to publish LHA monthly rent rates for UC under the Rent Officers (Universal Credit Functions) Order 2013. And the DWP must use those rates. The DWP cannot take the weekly rates and apply its own (inaccurate) conversion factor - there’s no provision in the rules for that.
Time to submit MRs for all my UC clients in PRS housing? They are missing out on a day’s LHA every year* if the example I have in front of me is typical.
But also, what about the VOA? The webpage says LHA rates are weekly, but for UC they’re supposed to be monthly. In fact, the monthly figures they publish are the weekly figures divided by 7, multiplied by 365, and divided by 12 - so they are correct.
N.B. The LHA rates for HB are covered by the Rent Officers (Housing Benefit Functions) Order 1997, and Para 2 of Sch 3B explains how to get from non-weekly to weekly rents (i.e. calculate yearly, then divide by 365 and multiply by 7).
*- or two in a leap year.
I don’t think that is what has happened here. One clue is from the fact that £663.07 is a couple of pennies out from the calculation you make.
In 2013 when the Rent Officers Order was made, Art. 4(4) (as it read at the time) required the use of the “approximate” monthly equivalent of the weekly LHA rates in force at the time (see http://www.legislation.gov.uk/uksi/2013/382/article/4/made ).
Since then, the weekly and monthly LHA rates have been up-rated independently of each other (as the legislation in fact requires).
In the vast majority of cases, this has not been to the 30th percentile of local rents, as the relevant percentage increase has been lower.
Taking the BRMA of Worthing and the 2bed rate as an example:
The weekly LHA rate in 2013 was £150.00.
The monthly equivalent (calculated using the ‘inaccurate’ DWP method) was therefore £650.00.
The £650.00 figure has since been up-rated twice, each time by 1% and rounded as prescribed by the Rent Officers Order.
This then equals £663.07, which is the figure used today.
If you want to appeal this, you will have to argue that the original determination in 2013 was incorrect, and that using *52/12 is not a fair way of calculating the “approximate monthly” equivalent.
[ Edited: 22 Mar 2019 at 03:47 pm by Charles ]I have decided to email the VOA to find out what’s going on.
In addition to the bits I’ve already mentioned about the Rent Officers (UC Functions) Order 2013, I’ve now noticed that Art. 4(4)(b) says that the first time the LHA was calculated for UC (29/04/2013), they should use the approximate monthly figures that they’re required to publish with the weekly rates for HB. And Sch 1 is a bit clearer than I first thought about the monthly nature of the ongoing rate calculation:
Para 3(3) says “The rent officer must compile a list of rents in ascending order of the monthly rents…”
Seems quite clear. But I do worry I might have missed something.
If you want to appeal this, you will have to argue that the original determination in 2013 was incorrect, and that using *52/12 is not a fair way of calculating the “approximate monthly” equivalent.
That sounds reasonable, except that it’s not for the DWP to calculate the approximate monthly equivalent - they have to use the figures which are calculated by rent officers in the VOA. And the closest thing we’ve got to that is the monthly “illustrative” figures which are published by the VOA.
Have a look at the excel sheet at the bottom of this page. The illustrative figures there were calculated using *52/12.
All monthly LHA figures since then have (correctly) used those original figures (up-rated where necessary).
If you want to appeal this, you will have to argue that the original determination in 2013 was incorrect, and that using *52/12 is not a fair way of calculating the “approximate monthly” equivalent.
That sounds reasonable, except that it’s not for the DWP to calculate the approximate monthly equivalent - they have to use the figures which are calculated by rent officers in the VOA. And the closest thing we’ve got to that is the monthly “illustrative” figures which are published by the VOA.
Also, for the avoidance of doubt, paragraph 6 of Schedule 3 to the 2013 D&A Regs says there is no right of appeal if all that is disputed is the adoption of a Rent Officer determination: you cannot challenge the Rent Officer’s actions through the benefits Tribunal
I wasn’t suggesting the VOA rates were wrong; I was suggesting the DWP wasn’t using the VOA rates. And this was because the only monthly LHA rates I can see are the ones which are included with the HB ones. I made the silly mistake of presuming those could be the monthly rates they are obliged to calculate for UC.
The VOA must notify the SoS of the monthly LHA rates for UC. And the SoS must use those LHA figures. Charles appears to be right about the figures they are using in practice (and sadly the VOA waited until after 2013 to do more accurate monthly approximations).
I suppose what this comes down to is that the VOA is publishing the weekly figures for local authorities to use for HB (calculated in accordance with the Rent Officers (Housing Benefit Functions) Order 1997) which must include an approximation of the monthly equivalent. In that set of figures, they used a x52/12 conversion in 2013, but now use a less inaccurate approximation. And we can see those weekly and monthly figures in the published LHA tables.
What I can’t see, is the monthly figures for UC - which are produced by the VOA but are different from the monthly figures they publish for HB. So presumably somewhere in the background, the VOA is notifying the DWP about the monthly rates; but they don’t seem to making these public. And that’s where this question started for me - the rates that have just been published for 2019/20 tell us what the LHA will be for HB, but not for UC.
It is an interesting one.
I’ve only got UC breakdowns with two different LHA rates involved handy, and both rates have never involved the 30th percentile since 2013.
I would like to see one which involved the 30th percentile at some point since 2013 (would most likely have been in 2014), to see which conversion calculation was used.
Also, the maximum amounts for each category of dwelling, when first introduced to the Rent Officers (Universal Credit Functions) Order in 2013 was calculated using the more accurate weekly/monthly conversion, but since then has used the inaccurate DWP conversion.
Anyway, I’ve made a FoI request from the VOA asking for the figures they’ve provided DWP over the years for the monthly LHA rates.
I’ve had a reply from LHA Helpdesk at the VOA:-
“Thank you for your email to the helpdesk.
You will need to contact DWP about the publication of the UC LHA rates as it’s their area of work.”
I guess they’re saying they provide the rates to the DWP, and it’s up to the DWP if they want to publish them? I wonder where the benefit calculators get their UC LHA figures from?
Interesting. I wonder if I’ll get anything from my FoI…
I know from experience that entitledto do not have the exact rates. They just do *52/12 from the weekly LHA rate. (Until recently, however, if you did a calculation for 2019-20, they did /7*366/12. But they’ve changed that now.)
I’ve now received a reply to my FoI request. They claim that legally there is only a weekly LHA rate, and they therefore do not calculate monthly rates. Presumably they are saying that the conversion from weekly to monthly rates is carried out by DWP.
This of course is completely incorrect, so I’ve asked for a review of my FoI request. I think to be safe I’ll make an FoI request to DWP as well.
Ha! After a sharply worded review request, the VOA have admitted they do hold the requested information, but are refusing to release it as DWP intend to release the information. Let’s see!
If this wasn’t UC, I’d be amazed at how difficult it’s been to get a straight answer about something that ought to be public information. How are people (e.g. homelessness departments) supposed to work out whether accommodation is going to be affordable if they don’t know what the LHA rate is? I went down to our homelessness department and asked what they think the UC LHA rates are and they pointed (not unreasonably) to the ones that are published by the VOA as the weekly amounts with monthly approximations. It’s not going to be a massive difference, but the UC LHA rate is definitely going to be lower than they think.
Does the answer you got mean that the DWP are going to answer your alternative FOI request, or are they suggesting the DWP is about to publish UC LHA rates, like actually publicly?