Housing Benefit Advice

Tongue

Just a quick query please:

Can someone buy a property then move their parent in who is on housing benefit and get the local council to pay the housing benefit which is in effect the council buying the house for them?

Sounds fraudulent to me but just wanted to ask in case anybody here knew for sure.

Blackpool_Saver

I know someone who is doing it with 2 flats (one house) with their children in ......

Jowo_2

So long as it isn't a contrived tenancy, not set up to take advantage of the housing benefit system, and it is done on a fully commercial basis (i.e. with a tenancy agreement, at market rent and the tenants pay rent when they are in employment and not just when they are benefits) then a live out landlord can rent a property to a close relative on Housing Benefit.

Close relatives cannot receive housing benefit when they live in the same property as the landlord.

Google 'contrived tenancy' to understand how to avoid this.

Tongue

The tenant is an elderly person who is retired and lives off benefits and state hand outs.

tboo

There are no hard and fast rules regarding renting of a relative, the outcome has to be made by the LA so a claim has to be submitted to get this.

Jowo_2

Tongue wrote: »

The tenant is an elderly person who is retired and lives off benefits and state hand outs.

So long as the relative who is the landlord doesn't live with them in the same property and so long as the local council don't deem it a contrived tenancy, this will be permitted.

Get your friend to run it past the local council who process their housing benefit.

Tongue

But people who live with their parents cannot claim any housing benefit as the state say that their parents have to put them up "rent free" and that's regardless of age as well.

karenx

It may be possible if the 2 relatives werent staying in the house and the rent must be at the going rate for the area for the type of house!

Tongue

Jowo wrote: »

So long as the relative who is the landlord doesn't live with them in the same property and so long as the local council don't deem it a contrived tenancy, this will be permitted.

Get your friend to run it past the local council who process their housing benefit.

So the advice is if your elderly relative is on benefits and in council accommodation, take out a mortgage and let the DWP make all the housing benefit payments to you and therefore buy the house for you, amazing!

Jowo_2

Tongue wrote: »

So the advice is if your elderly relative is on benefits and in council accommodation, take out a mortgage and let the DWP make all the housing benefit payments to you and therefore buy the house for you, amazing!

A relative can let out a property to another relative who receives housing benefit so long as the landlord doesn't live in the same property and the tenancy isn't contrived, yes.

The age of the tenant, the type of housing they previously lived in is irrelevant.

seven-day-weekend

A contrived tenancy is one set up solely to receive Housing Benefit /LHA. In other words, if the house has just been bought for the parents to live in, and would not be available for rental if they did not live in it; if the market rent is not charged, collected and accounted for; if the people were not evicted if they did not pay their rent like any other tenant would be; if they are not charged rent when they are not on Benefits - then it would be classed as a contrived tenancy and HB would not be paid.

It must be a proper commercial tenancy and the parents must be treated the same as any other tenants would be.