To ask the Secretary of State for Work and Pensions, what information her Department holds on (a) the median gap between rent and the Local Housing Allowance (LHA) for those households where rent exceeds the LHA and (b) the median deduction for universal credit claims in the private rented sector for which LHA does not cover the rent and which are subject to deductions, whether for universal credit advances, universal credit overpayments, tax credit overpayments or for any other reason.
1 March 2022
In the private rental sector, Local Housing Allowance determines the maximum financial support available for renters. In April 2020, we increased Local Housing Allowance rates to the 30th percentile of local rents at a cost of nearly £1 billion, providing 1.5 million claimants with around £600 more housing support in 20/21 than they would otherwise have received. Local Housing Allowance rates have been maintained at their increased levels in 2021/22 and will remain at those levels for 2022/23.
Median differences between rent and Local Housing Allowance in different broad rental market areas reflect variation in rental markets.
We reduced the normal maximum rate of deductions in Universal Credit from 40% to 30% to 25% of a claimant’s Standard Allowance enabling them to retain more of the award. These changes were implemented from October 2019 to April 2021. These positive measures were put in place to support claimants to manage financial difficulties. Processes are in place to ensure deductions are manageable and customers can contact DWP Debt Management if they are experiencing financial hardship to discuss a reduction in their rate of repayment, or a temporary suspension, depending on financial circumstances.
Claims where the Local Housing Allowance is lower than rent (housing shortfall) by selected deduction types, November 2021
Number of claims
% of all claims
Median housing shortfall
Advance or UC Overpayment or Tax Credit Overpayment
Tax Credit Overpayment only
UC Overpayment only
Any combination of the above
Any deduction type or advance repayment