Housing benefit

Mojisola

I don't know much about housing benefit so I thought I'd ask you knowledgeable people - a young couple are splitting up and they've been told that they can rent out their mortgaged, 3-bed house, rent something smaller for her and their two young children and get her rent paid by benefits. It doesn't sound right to me - it that how it works?

karenx

Why would they want to live in a rented house when they have 1 already?
The housing benefit people would see it as she already has a place to stay so use it instead of getting rent paid for her and a mortgage too!

Mojisola

karenx wrote: »

Why would they want to live in a rented house when they have 1 already?

They are splitting up so she is going to move into a smaller house and he is going to be living with family.

The housing benefit people would see it as she already has a place to stay so use it instead of getting rent paid for her and a mortgage too!

This is what I thought - they are hoping to cover their mortgage repayments from renting the house out and have the rent for her and the children paid by housing benefit. Someone has advised that it's possible to do so but I have trouble believing it.

karenx

No they wont be able to claim while they have a house already. Sell the house and she can use the proceeds to buy somewhere else

uganda

Not quite true. She may not qualify, but she can certainly claim. Presuming the property is not disregarded as capital for one reason or another (e.g. for first 6 months of divorce proceedings or indefinitely where it continues to be inhabited by one as a lone parent) then it is a matter of whether or not the house is worth anything when set against the outstanding mortgage.

I don't know how the DWP do it, but LAs generally request a valuation from the valuation officer and ask for evidence of the mortgage debt, then use this in their calculation (they would also take rental income into account). In these days where people in some areas are facing negative equity, it is possible the capital will not be that high.

Then it would depend on the rest of her financial circumstances. I don't know those.