Rent-A-Room scheme and Pension Credit....

daysdream
daysdream Posts: 17 Forumite
First Post First Anniversary Combo Breaker
in Benefits & tax credits
I'm in receipt of Pension Credit and a Basic State Pension, which combined comes to £572 every four weeks.
I rattle around in a four bedroom house and I want to rent a room out to help me financially, plus I'm lonely and enjoy the company of others in my home.
However, on looking into this, I find, no matter how I do the sums, I end up out of pocket if I rent a room.
I want to ask for £350p/m, which is a fair rent for the area I live in. I have contacted both my local Council, and Pension Credit office about how I stand regarding renting a room for £350p/m. Firstly I'm told that my Pension Credit would cease, and if my Pension Credit ceases, then my Council Tax single person allowance will no longer apply, meaning I'd have to pay full Council Tax (at present £138p/m).
This means if I have a lodger to stay I would need to pay full council tax = £138p/m, plus lose Pension Credit = £72p/m plus I'd need to restart buying a TV licence (I don't have a TV at present) = £12p/m, giving a total loss of £222 - this is without counting the loss of benefits having Pension Credit brings - eg: free dental treatment, etc.
This would leave me with c£32 a week, from which I'd need to pay for the extra costs of electricity, gas, water another person living in the house would bring.
Am I doing something wrong here?
I'd like to offer a homeless person a safe roof over their head, but financially I'd end up worse off for doing so?
Can anyone else tell me, am I working this out wrong?
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Comments

  • nannytone_2
    nannytone_2 Posts: 12,949 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    why not rent 2 rooms. then youd still lose the pension credit and council tax benefot, but would gain another £350 a month.
  • McKneff
    McKneff Posts: 38,823 Forumite
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    Daysdreams thread has been directed here from another board but strangely enough, That is exactly what I said. lol
    make the most of it, we are only here for the weekend.
    and we will never, ever return.
  • BigAunty
    BigAunty Posts: 8,310 Forumite
    Combo Breaker First Post
    why not downsize to a 1 or 2 bedroom place? This will reduce bills without the need to have strangers in the place.
  • daysdream
    daysdream Posts: 17 Forumite
    First Post First Anniversary Combo Breaker
    Have looked into downsizing and for me it's not viable:-(
  • Dunroamin
    Dunroamin Posts: 16,908 Forumite
    daysdream wrote: »
    Have looked into downsizing and for me it's not viable:-(

    Can we ask why?
  • daysdream
    daysdream Posts: 17 Forumite
    First Post First Anniversary Combo Breaker
    Hi Dunroamin- yep, no 'secrets':-) I've looked into downsizing and found after I'd paid off the mortgage, the 'ex', Estate Agents/Solicitors, etc, etc, then I'd not have enough to buy myself a tin box, so I decided to go for 'Plan B' - get a lodger in....which means I get to stay in the home I love plus someone else gets to share it with me:-)
  • Pollycat
    Pollycat Posts: 34,683 Forumite
    Name Dropper First Anniversary First Post Savvy Shopper!
    daysdream wrote: »
    I want to ask for £350p/m, which is a fair rent for the area I live in. I have contacted both my local Council, and Pension Credit office about how I stand regarding renting a room for £350p/m. Firstly I'm told that my Pension Credit would cease, and if my Pension Credit ceases, then my Council Tax single person allowance will no longer apply, meaning I'd have to pay full Council Tax (at present £138p/m).

    Just being pedantic, but for the sake of accuracy, you wouldn't lose your 25% single person discount on council tax because you wouldn't be eligible for pension credit - you would lose the single person discount because there would be more than one person living in the house.

    Same effect but for a different reason than you stated.

    For example, my Mum does not get Pension Credit but she does get the 25% discount on CT because she is the only person living in her house.
  • poppasmurf_bewdley
    poppasmurf_bewdley Posts: 5,909 Forumite
    Name Dropper First Post First Anniversary
    daysdream wrote: »
    I'm in receipt of Pension Credit and a Basic State Pension, which combined comes to £572 every four weeks.
    I rattle around in a four bedroom house and I want to rent a room out to help me financially, plus I'm lonely and enjoy the company of others in my home.
    However, on looking into this, I find, no matter how I do the sums, I end up out of pocket if I rent a room.
    I want to ask for £350p/m, which is a fair rent for the area I live in. I have contacted both my local Council, and Pension Credit office about how I stand regarding renting a room for £350p/m. Firstly I'm told that my Pension Credit would cease, and if my Pension Credit ceases, then my Council Tax single person allowance will no longer apply, meaning I'd have to pay full Council Tax (at present £138p/m).
    This means if I have a lodger to stay I would need to pay full council tax = £138p/m, plus lose Pension Credit = £72p/m plus I'd need to restart buying a TV licence (I don't have a TV at present) = £12p/m, giving a total loss of £222 - this is without counting the loss of benefits having Pension Credit brings - eg: free dental treatment, etc.
    This would leave me with c£32 a week, from which I'd need to pay for the extra costs of electricity, gas, water another person living in the house would bring.
    Am I doing something wrong here?
    I'd like to offer a homeless person a safe roof over their head, but financially I'd end up worse off for doing so?
    Can anyone else tell me, am I working this out wrong?

    I find your logic difficult to understand.

    If you rent out a room for £350pm, and estimate you'd be better off by ONLY £35 per week, where is the problem?

    Yes, you'd have extra gas, electric and water for another person but that would be nowhere near £35pw. In addition, you'd stop being a drain on the resources of the country and the council by not claiming pension credit or council tax credit.

    You'd also have, as you said above, the advantage of gaining some company and ending your loneliness, which could be priceless.
    "There are not enough superlatives in the English language to describe a 'Princess Coronation' locomotive in full cry. We shall never see their like again". O S Nock
  • daysdream
    daysdream Posts: 17 Forumite
    First Post First Anniversary Combo Breaker
    Lots of helpful advice to look into. Thank you, I'm off to start re-viewing the situation
  • BigAunty
    BigAunty Posts: 8,310 Forumite
    Combo Breaker First Post
    If you net an additional income of £350 per month, why are you surprised this leads to some benefit withdrawal? You get means tested benefits because you have low or no means so if you then come into means...

    Also, you state that you don't want to downsize because you'd have to give some money to an ex - presumably they have an interest in the property and you don't want to meet your obligations by selling up, so don't expect me to feel sympathy for you rattling around in an expensive to run large house because you don't want to repay a debt to someone else.
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