Claiming Housing Benefit - whilst renting from family?

luckyNo13_2

A number of years ago we bought a house for my parents to live in (we don't live in the same house) as my dad was ill and couldn't work and pay the mortgage anymore.

We remortgaged our house to buy it and my dad paid us money by standing order each month to pay the mortgage - is this classed as 'rent'?

My dad has unfortunately died and my mum is looking into which benefits she is entitled to. Can she claim housing benefit for the 'rent' she pays us?

She hasn't had any money since my dad died so i've been paying the rent myself - will this make a difference. She has been giving me some cash to put towards the mortgage, but this won't show up if they check bank statements.

We did have a tenancy agreement drawn up - does this help?

Sorry if too many questions - but i'd really like to help my mum as she isn't able to work now and needs help and i can't afford to keep paying the extra as money is tight.

Thanks

Jojo_the_Tightfisted

Think renting from family is specifically excluded from HB. Sorry.

luckyNo13_2

Sorry - i meant to say - i know you can claim housing benefit whilst renting from family - but does our situation qualify?

notlongnow_2

We have a house that my partners mum lives in. We looked into it and apparently she cant claim housing benefit as she is family.

Breast_Cancer_Survivor

luckyNo13 wrote: »

A number of years ago we bought a house for my parents to live in (we don't live in the same house) as my dad was ill and couldn't work and pay the mortgage anymore.

We remortgaged our house to buy it and my dad paid us money by standing order each month to pay the mortgage - is this classed as 'rent'?

My dad has unfortunately died and my mum is looking into which benefits she is entitled to. Can she claim housing benefit for the 'rent' she pays us?

She hasn't had any money since my dad died so i've been paying the rent myself - will this make a difference. She has been giving me some cash to put towards the mortgage, but this won't show up if they check bank statements.

We did have a tenancy agreement drawn up - does this help?

Sorry if too many questions - but i'd really like to help my mum as she isn't able to work now and needs help and i can't afford to keep paying the extra as money is tight.

Thanks

I believe that you can not claim HB on a property bought for that sole purpose ie the property needs to be available for anyone to rent not just family.

luckyNo13_2

sorry i can't post a link but the Shelter website says you can and when we spoke to the pensions office they said you could if you have a formal tenancy agreement.

I just don't want to say the wrong thing when we go into the housing office and not get benefit, if she can get it.

bestpud

Normally the house would have to be treated as a commerical let by you.

If you had bought a house as a buy to let and then ended up renting it to your parents with a proper tenancy agreement etc, I think you'd be ok, but I'm not sure in your case as they were living there when you bought it so it was only ever intended for them iyswim.

MamTor13

Yes, she can rent from a family member and get Housing/Council Tax benefit – it's actually Local Housing Allowance she will need to apply for. You need to have a tenancy agreement, which you have. If they question where the rent has been paid lately you can explain that since your father's death your mother has struggled to pay and still owes rent but has paid some money, give her receipts for what she has paid – keep a tally of the arrears to show them if asked. Also show them the previous standing order receipts where your father paid, obviously the rent will have to be the same as when he was paying, a sudden increase will likely result in a 'contrived tenancy' decision. Showing that your father previously paid without benefits should satisfy them that this is a commercial rent and not one set up to obtain benefit. Your mum may not get the full rent and will have to make up any shortfall. Apply now, be up front and honest and you will most likely have no problems.

Jojo_the_Tightfisted

Well, it would be great if I was wrong, but I would suggest you get a welfare rights officer or someone from Shelter/CAB to come with her, as it sails close to the excluded 'taking advantage' definition - I am not suggesting you are doing anything dodgy at all, but I'd be willing to put money on HB trying this one on for months and months.

luckyNo13_2

We did own the house for a year before Mum and Dad lived in it, but it was not rented as was being renovated.

It seems silly that will have to rent out the house to someone else and move mum into other rented accommodation and add to her upset just so she can claim housing benefit!

MamTor13

luckyNo13 wrote: »

We did own the house for a year before Mum and Dad lived in it, but it was not rented as was being renovated.

It seems silly that will have to rent out the house to someone else and move mum into other rented accommodation and add to her upset just so she can claim housing benefit!

There's nothing wrong with only wanting to rent to friends or family, many landlords will only rent to people they know. There have been many successful appeals to this being the basis of a 'contrived tenancy' decision. If you have problems after application go and seek the advice of a welfare rights advisor.