Housing Benefit Madness

Hoonercat

Posting this on behalf of a friend who is a mature student and a single parent.
Just under a year ago she became a full time student. She was working part time 4 days a week and still does as part of her course. She doesn't receive Income Support as she has 2 part time jobs but does get roughly half of her rent paid by HB.
She didn't inform the council when she became a student but recently was advised to take a student grant which she hadn't realized she was entitled to. She then contacted HB in case it made a difference to her HB.
The grant was for £2900, the council sent her a letter saying she now owed them £3500 in over payments for the year:eek: which they would take from her HB allowance each month.
She read the letter and it was clear that they were including a student loan which she didn't actually take so she wrote to them explaining this. She has now received a reply saying that the student loan is considered to be income even if it is not accepted. I'm speechless, how can a loan that you don't have been considered as income? Even is she did take a loan, it isn't income as it has to be paid back so there is no financial gain. They may as well reduce her HB further because she might qualify for a car loan, or a personal loan, even though she hasn't got one.

HB pay about £400 per month of her rent, which is roughly £4800 per year. If they are suggesting that they overpaid her by £3500 then next year, when she again DOESN'T take out a loan, her HB will be reduced to just over £100 per monthm meaning she has to find an extra £300 per month which she cannot afford. On top of that, it will be reduced further to pay back the £3500 from this year.
The upshot of it is that she may have to give up the college course which has another year left to run because she cannot afford the rent. The whole point of her doing the course was to eventually be able to get a full time teaching job and get on the housing ladder, but she now finds herself in this ridiculous situation which could actually mean that she ends up being on HB for a lot longer.

It really shows what is wrong with this country, there are people who haven't worked for years and never will work through pure laziness getting their HB paid in full without any hassle whatsoever, yet someone who desperately wants to better herself gets shafted. Unbelievable.:mad:

tabskitten

yep- and the sad thing is that it doesn't even surprise me any more!!

nannytone_2

tell her to go to CAB. i know that student loans are classed as income but thats as far as my knowledge goes.
and no it isnt bloody fair!

Blackpool_Saver

yes, any available loan or grant is factored in whether taken or not. I didn't want to get into debt when I was in higher education but they forced me to as well.

afc80

First of all she should have told the council that she had became a student. She has to notify the LA of any change in her circumstance.

Secondly Housing Benefit Legislation states that the LA has to use the maximum loan amount that a student would be entitled to claim even if they do not take up the full loan entitlement.

In fact if you dont take any student loan the LA when assessing HB will still assume the maximum loan amount.

There is nothing that the council or the customer can do about this.

nannytone_2

thinking about it.............if a loan is available and you dont take it, could be seen as deliberately depriving yourself of income. its not fair though when people can legitimately sit on their bums and just wait for money to go into their accounts!

karenx

Student loans are there to help pay for things for studying and for living on. Therefor it can be used to help pay for rent. Whether she decides to take it or not is up to her but she will be assesed as having it so she may as well just take it. Then can use it towards her rent
It is fair as non parent students cant claim LHA so they have no choice but to use student loans to pay for rent. So as your friend gets help with LHA its only fair she has to use the student loan to help pay the rent

paulrn_2

Sorry that your friend is in difficulties but this can be seen both ways. Students get a low interest loan to gain qualifications to earn more thats just what the country can afford especially at the moment. Your friend did not take the loan (maybe she was misinformed but thats a different problem) but wants tax payers to pay her HB which she will not have to pay back when she moves on, looked at in the cold light of day it seems that she is avoiding paying for her living costs when a form of income is available. I expect that this is not the case and its all a muddle and I hope she sorts it out, can she back claim the loan??

seven-day-weekend

The student loan is classed as income because it is there to pay for your living costs and if you are entitled to it and don't take it, that makes no difference.,it will still be counted as though you have taken it. It is the same as if you are entitled to a Pension and don't claim it, that also will be counted because it is income available to you.

Why should the Council subsidise her rent when there is income available that she has not taken?

Vader123

If there is a student finance there to support your living it should be taken instead of a reliance on the state.

Vader

Hoonercat

Thanks for the replies.
Ok, maybe things aren't as bad as they seem. I've just looked into student loans and you don't have to pay them back until your earnings reach £15k. As already stated, she has not been given any info regarding student loans and I think her biggest fear was that, in the current economic climate, she might finish her course only to find she can't get a job but would still be expected to pay off the loan. She hadn't even considered the loan because she can get by without it, though if her HB is cut then she will. She was working part time before she became a student, her income has not changed except for the student grant (which, according to the council, doesn't get counted as income, yet a loan that you don't take does:think:)

I still don't think it's right that not taking can count as income though. There are tens of thousands of people who get partial HB and would qualify for a personal loan, those don't choose to take it don't have their HB reduced. I can't see how anything that requires you to pay it back can be classed as income as you don't gain financially from it.