Can Parents claim Housing benefit

emjaypage

My Mum and Dad live in a house owned by my Brother-in-Law and Sister. They bought the house from my late brother to stop it being repossessed, but Mum and Dad have always lived there and had an agreement that they never had to pay rent whilst there. There is now a real danger that the house will be repossessed as my Sis and spouse are struggling to pay the mortgage on top of their own outgoings . Mum and Dad are 80+ and have no income apart from a State pension - can they claim anything?
Thanks for any help.

Conor_3

It is notoriously difficult to get HB paid to a family member and pretty much impossible to get LHA.

HB/LHA is also paid at the rate for the size property they need, not that they live in.
So they'd not get the full rent rebate for the rental value of a 3-4 bedroom house as a couple living on their own - their housing needs are single bedroom accommodation.
It would have to be done as a proper commercial arrangement. The only problem with that is that the mortgage company would have to be notified and they're likely to refuse permission or insist on a commercial mortgage which has a higher interest rate. There will also be some initial costs involved in legal fees and improvements to the house as required by the local authorities lettings regulations. Some insist on fire doors throughout which can cost you £1000's to do throughout a house.

Do your parents not get Pension Credits as well as the State Pension?

suelees1

HB would be payable only if they're liable to pay rent (as in any commercial tenancy). If a claim is made now, the LA will look at this being a contrived tenancy ie taking advantage of the benefit system.

McKneff

Surely then can afford to pay rent if they have two state pensions thus enabling your sis and spouse to pay the mortgage and not be repossessed

dmg24

anniehanlon wrote: »

Surely then can afford to pay rent if they have two state pensions thus enabling your sis and spouse to pay the mortgage and not be repossessed

The state pension is not a great amount!

Normally I would say that this is a grey area (renting from family tends to be), but in this situation I would agree with suelees1, it would be a contrived tenancy.

real1314

Conor wrote: »

It is notoriously difficult to get HB paid to a family member and pretty much impossible to get LHA.
This is incorrect. There are no differences between LHA and HB in respect of contrived tenancies. They operate under the same regulations.

HB/LHA is also paid at the rate for the size property they need, not that they live in.
So they'd not get the full rent rebate for the rental value of a 3-4 bedroom house as a couple living on their own - their housing needs are single bedroom accommodation.
Where did the OP say it was a 3/4 bed house?

It would have to be done as a proper commercial arrangement. The only problem with that is that the mortgage company would have to be notified and they're likely to refuse permission or insist on a commercial mortgage which has a higher interest rate.
Also, many BTL mortgages do not allow renting to a close relative.

There will also be some initial costs involved in legal fees and improvements to the house as required by the local authorities lettings regulations. Some insist on fire doors throughout which can cost you £1000's to do throughout a house.
Neither HB nor LHA regulations have anything at all to do with standards of accomodation. The only regulations for the type of rental propertry described is a Gas Certificate. I don't know where you're getting your ideas from, but please try to use valid facts, not made up stuff that is not relevant.

Do your parents not get Pension Credits as well as the State Pension?

The basic problem OP is that your BiL and Sis agreed they could stay rent free. Was this a former council house by any chance?
If it was in danger of repossession, your mum and dad must have had a mortgage on it? So are they now paying the same amount as the mortgage to your BiL and Sis? Yet you say it's rent free?
It doesn't add up to a convincing story imho, based on your post.

McKneff

i still say they could be paying rent. All other pensioners have to.
You are expecting them not to pay rent but you want the state to give them money to pass on to pay your sister and spouse the mortgage.

emjaypage

Thanks for the posts so far - I am new to this and apologise if the facts seem somewhat sketchy.
My Bro owned the house whilst working abroad and M & D lived there from the outset under a rent free agreement. Due to illness he couldn't work and got into arrears so to avoid repossession and M & D becoming homeless (they have no savings/property) BiL and S bought the house. The original rent free agreement was declared legally void as ownership of the property had changed and M & D signed a new agreement (Dec 2003) with BiL and S to pay rent at £800 pcm (it is a 3 bedroom property so bigger than they now require). D was still working then but has since had to stop (not bad tho' for 85!) and 2 children and their own mortgage has moved the goalposts. It is not a question of trying to 'work the system', simply to try and avoid mortgage arrears and the possible threat of repossession. After paying tax and their own way in life up to now , if they can get some help..........!
Thanks to all who commented.

dmg24

I am now more confused - how were they managing to pay £800 rent on just the state pension for income?

emjaypage

I was helping pay the mortgage until I got divorced and cleaned out!

Oldernotwiser

How much is the mortgage on the property and how much equity is there in it? Would there be enough to sell and buy a smaller place?