How to fairly apportion costs in a shared household

Fozzie_Bear

Hi, This is a fairly unusual situation but I am sure it cannot be unique and others may have come across the same issue.
A relative and her family have moved in with her elderly mother. This was to be a short term situation with eventually the daughter buying a larger house which would accommodate her mother and she would take on the caring role.
As it was short term no rent was paid to her mother but they paid all the heating and utility bills plus council tax. Also the mother pays all maintenance bills and a dedicated telephone.
The situation has now changed from a temporary to more permanent situation and other members of the family are keen to ensure household costs are fairly apportioned. Not only so that neither side are financially disadvantaged, but also when the inevitable happens and the estate is split between the other siblings, one family member has not had a subsidised "tenancy".
One other alternative was to ascertain the cost of a fair rent in the area for a two bedroom house, based on the fact that the daughter has exclusive use of two of the four bedrooms and the mother exclusive use of the remaining two bedrooms. However in a normal rental situation, the tenant normally pays all the electricity, gas and food bills as they are the only users. In this situation the mother shares the benefit of the heating and electricity as well as meals.
Does anyone have any experience of a similar situation or some suggestions as to how household expenses could be fairly apportioned?

Meatballs

One person uses two rooms, the other person uses two rooms.

Sounds like 50-50 straight down the middle.

That or apportion it based on income.

Annisele

Are the mother and the daughter happy with the situation as is? If so, I'd be very tempted to leave well alone...

The 50/50 sounds fair in principle, but if the daughter is spending x hours per week caring for her mother it would be easy to argue that the daughter's caring is 'worth' free rent.

paddyz

I dont think they should pay the going rate of a 2 bedroom house rental as they are not renting a two bedroom house they are currently living in shared accomadation with 2 bedrooms in my view not a great living arrangment, if the mother is happy with this plan then the cost is simply up to her,
If she is mortgage free she might not want to charge rent and they are splitting bills just now or if she rents then 50/50 seems fair, and if they have plans to purchase a house together and the family might need to save extra so they might not have the funds, some might argue that the family moving in to care, cook, clean for a mother should be paid back someway. 24 hour care is very expensive. obviously its family but its food for thought?

If this family member a good honest person? if yes and you dont have worrys about the Mother in her care then let them do the best for her without needing to have a family meeting to see if the inheritance will be as equal as you plan

Fozzie_Bear

Annisele wrote: »

Are the mother and the daughter happy with the situation as is? If so, I'd be very tempted to leave well alone...

The 50/50 sounds fair in principle, but if the daughter is spending x hours per week caring for her mother it would be easy to argue that the daughter's caring is 'worth' free rent.

I tend to agree but I am not one of the siblings. The daughter has taken on a caring role and therefore the major responsibility for her mother despite the other siblings helping out when they can. The daughter did initially intend to purchase the house from her mother so the lady could share the proceeds with her children before she died, however when they went to a Solicitor to get advice on the best way forward, the solicitor suggested that the mothers name be on the deeds so she had security of tenure. Something which I certainly would not be happy with.
I think it important that all the family agree on the arrangements so the daughter can get on with her life without worrying about what other family members think.

Paddyz wrote:

I don't think they should pay the going rate of a 2 bedroom house rental as they are not renting a two bedroom house they are currently living in shared accommodation with 2 bedrooms in my view not a great living arrangement, if the mother is happy with this plan then the cost is simply up to her.

You are right they are not renting a two bedroom house they are sharing a four bedroom house, but the analogy was used to try and ascertain what they might be paying in rent against what the daughter and husband are paying in terms of utility and other bills. Its not an exact science but unless someone has come up with this situation before there is no definitive formula.
Thank you all for your thoughts
Fozzie

silvercar

You are right they are not renting a two bedroom house they are sharing a four bedroom house, but the analogy was used to try and ascertain what they might be paying in rent against what the daughter and husband are paying in terms of utility and other bills.

Renting two bedrooms in a four bed house is nothing like renting a two bed house. For a start there is someone else occupying the common areas, the fact that living with other people means you have to consider their needs, particularly when making noise late in the day and entertaining guests.

Don't undermine the care role, if the fact that the mother is not alone means she is less likely to sell up and go into a sheltered home of some sorts, the other siblings have gained considerably.

and other members of the family are keen to ensure household costs are fairly apportioned. Not only so that neither side are financially disadvantaged, but also when the inevitable happens and the estate is split between the other siblings, one family member has not had a subsidised "tenancy".

So what if they have? They have provided care and company for a parent, try valuing that.

Pitlanepiglet

Can you clarify, the daughter currently pays for all heating and utility bills, plus pays for and provides meals for mother and is there as a live in carer? How much care does mother require at the moment?

To me the daughter is already "giving" a huge amount and of course the other siblings have the peace of mind of knowing that mother is looked after. I can tell you from personal experience that sharing a house with an elderly relative can be very challenging and far from just giving the daughter a cheap place to live.

If your/her concern is about monthly payments, I would have thought that they are about quits. The daughter is presumably spending £500 plus in outgoings/utilities and as mother is presumably home a lot the heating/lighting costs are likely to be fairly high.

The other siblings presumably think that daughter is getting a good deal, whilst failing to take any account of the care that she gives and the pressure that she takes off the other siblings?

IMO the daughter is doing enough already.

Fozzie_Bear

Pitlanepiglet wrote: »

Can you clarify, the daughter currently pays for all heating and utility bills, plus pays for and provides meals for mother and is there as a live in carer? How much care does mother require at the moment? .

The mother is still fairly independent but has numerous conditions effecting her health, the main one being a food intolerance which means she cannot eat normal food. Not just lactose and wheat intolerance but much more. Up until recently she used to drive herself to regular chiropractor doctor and specialist appointments but due to deteriorating eyesight she has had to stop driving. This means she has to be taken to each appointment.

Pitlanepiglet wrote:

To me the daughter is already "giving" a huge amount and of course the other siblings have the peace of mind of knowing that mother is looked after. I can tell you from personal experience that sharing a house with an elderly relative can be very challenging and far from just giving the daughter a cheap place to live.

If your/her concern is about monthly payments, I would have thought that they are about quits. The daughter is presumably spending £500 plus in outgoings/utilities and as mother is presumably home a lot the heating/lighting costs are likely to be fairly high.

The other siblings presumably think that daughter is getting a good deal, whilst failing to take any account of the care that she gives and the pressure that she takes off the other siblings?

IMO the daughter is doing enough already.

Thanks, as I said above my views of the arrangement do not necessarily concur with the siblings and I take a pragmatic view along the same lines as yourself. That said the other family members do not I believe have finace as the primary issue, they are just keen to ensure ongoing arrangements are fair to both the mother who has diminishing savings and the upkeep of the house.
Fozzie

Pitlanepiglet

If the daughter is paying the household expenses then Mother isn't paying them so she is preserving her income. On her own she'd get 25% council tax discount but her eating/lighting costs are probably not much different and she'd be buying her own food plus paying for taxis etc.

Sounds like Mother is becoming more in need of care and if she requires specific meals, help with medication etc I imagine the daughter is providing a service that would cost a lot to buy in. I also don't think you can underestimate the value of someone eating and drinking adequately, let alone factoring in a special diet and ensuring that medication is taken correctly. Plus the companionship and the fact that there is someone there to deal with any problems of either a personal or practical (house/financial) nature

On a similar note, have they looked at whether Mother is entitled to Attendance Allowance, daughter may then be entitled to Carer's allowance.

My view will be one sided as we carry out the same role for my father. My sister is grateful that she doesn't have to worry about Dad and that she knows that he has someone with him, that he is eating properly and taking his medication.