Renting from a family member and claiming housing benefits

Fire_Fox

yellowtuesday wrote: »

IF my sister was to buy out my OH would that not get really complicated with the huoseing benefit. Also I don't know if the mortgage co would agree to that.

I would need a2/3 bed flat/house as I have three children although one is nearly 18 but planning on having a year off before uni so I supppose he wouldn't be counted as a dependant once he turns 18??

Thinking about it again (that's the great thing about actually telling someone about it rather than it going round and round in your head) It probably would be best if poss to stay here and rent out a couple of rooms. It is a bungalow conversion so there are bedrooms downstairs and upstairs and I could section off two rooms and a bathroom downstairs. They could have their own front door too! They idea of using the equity to live on is not good.

When you say 'only liable for half the bills' do you mean that the bills would be shared with the lodgers? I think if I go down this route I might include something for the bills in the rent.

I know I need to get this all sorted out. I am in this mess because I have been waiting for years for my husband to sort it all out but he has done nothing about it. I had that misguided idea that he 'could and would' provide for his family. Taken me a long time but i have finally realized that it is down to me.

Thanks very :Tmuch for your help

As you own the house, at the moment you wouldn't be entitled to LHA (housing benefit) you would be entitled to SMI (support for mortgage interest), however while you live with your partner he is expected to help support you. Once he moves out either he or your sister would be liable for half the mortgage and you could potentially get SMI for your half. I would note your partner will find it difficult to enforce a sale, and he will be liable to half (if you are tenants in common) or all the mortgage (if you are joint tenants) until the sale goes through. :money:
http://www.jobcentreplus.gov.uk/JCP/Customers/WorkingAgeBenefits/Dev_016128.xml.html

Some people who are in shared ownership (housing association) properties do get SMI on the mortgaged half and LHA on the rented part so it is not impossible that you could rent the other half from your sister/ partner and claim benefits. You may still have the issue of proving it is a real tenancy - but the council *may* be more sympathetic to your sister doing you a favour as you have children, your relationship has ended and it simply isn't a good market for selling property. You really need professional advice on this.

Students at university are still classed as occupants even whilst they are away - there was recently a thread on this on the Benefits board where the council refused to pay LHA for the full house and then backtracked. :T HOWEVER if your adult son is working for a year between his studies he will be classed as an adult for that year and will be expected to contribute to the household, affecting any means-tested benefits.
http://forums.moneysavingexpert.com/showthread.html?t=2284961

If you make the lodger accommodation self contained (own front door, kitchen and bathroom) they are no longer lodgers they are tenants. :eek: Separate council tax would be applied, you would need to supply an AST and then tenants would have more rights than lodgers. The income would also be liable for income tax. En-suite rooms sharing kitchen with the family is fine and still a lodger.
http://www.voa.gov.uk/publications/public_fact_sheets/self-contained-units-factsheet.pdf

Usually with lodgers it is easier to include all bills in with the rent. However I am not sure how you declare this for benefits, it may be easier to clearly charge rent and charge bills separately as the bill money is not income it is expenses. So even if the rent gets subtracted from your benefits, the bills money will help run the household - once you are working again all the money will be yours! I am no expert on this but there will be information on the inland revenue website (rent-a-room scheme) or read around MSE generally or speak to your benefits advisor.
http://www.hmrc.gov.uk/helpsheets/hs223.pdf

Gazing_On_Sunsets

I am interested in this topic because I own two houses: I live in one and let the other. My brother is disabled and unable to work, and currently rents a house. I worry about his future as I don't like to think he is vulnerable to being told to move. In the future, when I am able, I'd like to buy a house that he can rent from me. I cannot GIVE him a house as that would then be an asset that would affect his benefits: it seems better for me to own it, pay the mortgage, and have him pay me a fair rent. I briefly looked into it and I am sure I read somewhere that it was possible if everyone was upfront about it. Has anyone done something similar?

Fire_Fox

Gazing_On_Sunsets wrote: »

I am interested in this topic because I own two houses: I live in one and let the other. My brother is disabled and unable to work, and currently rents a house. I worry about his future as I don't like to think he is vulnerable to being told to move. In the future, when I am able, I'd like to buy a house that he can rent from me. I cannot GIVE him a house as that would then be an asset that would affect his benefits: it seems better for me to own it, pay the mortgage, and have him pay me a fair rent. I briefly looked into it and I am sure I read somewhere that it was possible if everyone was upfront about it. Has anyone done something similar?

I think this would be a good post for the 'Disability and Dosh' or Benefits board, you *may* find there are different rules if, say, your brother were to rent an annexe on your home and you were his carer (if indeed he requires any personal care). The Benefits board can be a bit cut-throat so careful what you say and ignore the trolls!