i don't pay rent because i have no money- can i get housing benefit or council tax re

lanajones

Hi. I am self employed but not earning barely anything. I have a debt relief order just granted. My ex partner and i split in October 2009 and a friend offered me a room in her house; I was going to pay rent but as I had little income and big debts with credit card companies taking monthly payments,we agreed I would do work for her instead- as a builder and electrician I'm fairly handy and she has a lot of odd jobs need doing.

Anyway, she had her council tax agreement today and was previously on single occupancy; if she puts me on the list of occupiers of the house she lose that 25% reduction. I have been looking into council tax relief and housing benefit on the councils site. Thing is everything is based on you having something...I have about £50 a week tax credit and that's it. We dont have a rental agreement as we were both happy with the working arrangement. Can we now formalise an agreement and just have the rent in arrears until I cam pay, in order to qualify for housing benefit? Can I get Council Tax relief, or will she have to pay an extra 25% for me?

viktory

You won't get HB (or LHA) as you do not have a formal tenancy agreement. Even if one is drawn up now, it might be considered to be a contrived tenancy. Not sure about council tax, except to say that your friend will definitely lose her 25% single person rebate - and I don't think you can claim for that either.

karenx

Is her house rented? If so she can't sublet, so she can't make up an agreement and you claim housing benefit.
if its a mortgage house you will need a proper agreement etc and she will need to inform her lender and insurance.
For your lha rate you will only be entitled to the 1 bed rate for your area. Google lha rates and it will tell you there

lanajones

The house is bought and paid for...we seem to have got into a mess just by not going through the system.

fluffymovie

Hi there

By virtue of the fact that you are living there, your friend has lost the SPD of 25%.

She can make a claim for what is called Second Adult Rebate which is not based on her income but on that of the 2nd adult, ie you. This would mean that she were awarded benefit of 25%, 15%, 7.5% or nil dependant on your income. If you say that you have nothing, then it would most likely be the 25% that she is losing from the SPD.

As you have said, you moved in and don't pay rent so to create a tenancy now, which seems to be being created because she has received a Council tax bill that is higher, would probably not be accepted and would be considered a tenancy created to take advantage of the scheme and refused.

If you have a very little income, make sure that Tax Credits know this and if you aren't actually making any money from your self employment, would it be better to wind up the business and start a new job or sign on for JSA?

lanajones

I have a debt relief order so am not allowed to earn more than £50 a week; I have tax credit to that amount. It seems we have put ourselves outside of the system by not using money as currency!!! and will be penalised for bartering. As my friend just said. ..is it worth all the hassle for £20 extra month...but it is ridiculous she should pay more for being generous and not asking for money from me.... eventually when business picks up I will be able to pay it all abck and more...but at the moment I only have skills to offer, which she says are worth more than money...

fluffymovie

But as I have said, if she applies for second adult rebate, she won't be paying more.

I am not an expert on DRO's but don't they want you to earn more to clear the debt? Where is the restriction on your earnings? Not having a shot at all but just curious

sunnyone

lanajones wrote: »

I have a debt relief order so am not allowed to earn more than £50 a week; I have tax credit to that amount. It seems we have put ourselves outside of the system by not using money as currency!!! and will be penalised for bartering. As my friend just said. ..is it worth all the hassle for £20 extra month...but it is ridiculous she should pay more for being generous and not asking for money from me.... eventually when business picks up I will be able to pay it all abck and more...but at the moment I only have skills to offer, which she says are worth more than money...

You can earn more but you dont want to pay your creditors, how are you getting tax credits if your not working and earning?

Bartering dosnt mean that you shouldnt pay what you owe, its not a easy way out.

lanajones

No I cant earn more. That is why I have a debt relief order...I have tax credits based on tax paid in previous year.

karenx

that's not how tax credits work. Are you working over 30 hours per week? How long ago did you go self employed?

Oldernotwiser

If you're claiming tax credits without informing them of a change of circumstances (which you are), you'll find yourself with a large overpayment to be repaid.

You should be claiming JSA if you're not working.