In the recent emergency budget the Chancellor of the Exchequer announced changes in the way that local housing allowance is to be calculated. Figures from the Valuation Office Agency (VOA) have just been issued that demonstrate the impact that these changes will have, based on the rates for June 2010. It should be noted that the figures below are indicative and are not statements of fact, they demonstrate how, if the change in calculation formula had been introduced immediately, the rates for LHA would change.

The current formula is based on median rents in a broad rental market area, in this case Tyneside. From October 2011 LHA will be based on the 30^th percentile which, as can be seen from the tables, generally reduces the LHA rates. Rents will also be capped depending on property size. These per week rates are listed below and are unlikely to have an effect in the Tyneside area.

• £250 a week for a 1 bedroom property
• £290 a week for a 2 bedroom property
• £340 a week for a 3 bedroom property
• £400 a week for a 4 bedroom property or larger.

There are also proposals to reduce entitlement after 12 months for claimants of Job Seekers Allowance from April 2013. The proposed rate would be 90% of the current eligible award and the coalition government hopes that this along with other measures will incentivise tenants to come off benefits.

There is also a proposal to take into account the role that carers play in supporting tenants. This will mean that claimants with a disability who require an additional bedroom for a carer who is not part of the household will be able to claim for an additional bedroom from 2011-12.