Real Life MMD: Should I split the repayment?

pennypinchUK

I think you were incredibly generous to share the cost of council tax in the first place (1. you were entitled to the exemption for a reason, i.e., minimal means, 2. the employed girl was earning a wage when you moved in and 3. the employed girl was presumably paying the full whack before you 2 students moved in).

So.
1. No, you shouldn't have paid in the first place.
2. No, you should not share the benefit. The benefit you've received simply restores your financial position back to where it should have been in the first place.
3. Yes, you should move out and leave your grasping house mate behind.

just_me,_again

Unfortunately the way council tax exemptions for students work isn't very helpful for mixed households. Everybody's a student = fine, just jump through your council's hoops to register that fact (I've done this three times now in different cities and the process has been a little different for each) and they'll send you an exemption notice for the whole property. Unfortunately, if there's some people who aren't exempt the discount doesn't go in proportion to the employed/student ratio of the house. Only one non-exempt person means you get the single person discount and still pay 75%, more than one person not exempt and you pay the full whack, even if that's two of you in a house of 12.

The important thing is to be clear from the outset what the deal is. In this circumstance if you agreed to help out as a student you have to live with that, as does your present student housemate. If your belatedly received benefit reflects your circumstances when you claimed and doesn't exceed what you paid into the council tax pot then I don't see why anyone should expect you to share it. If your student is struggling financially and the arrangement that she'd contribute a third is no longer working then you could have a conversation about whether to help her continue living with you you and your other employed housemate want to pay in more IN FUTURE. This isn't the sort of thing that should be changed retrospectively though, unless the benfit you've received exceeds your contribution to the council tax, which would be a bit odd.

In the past, when working, I have paid 75% of council tax and a bit more than half the rent in a two-way share with a student - it cost me more than sharing with another professional, but meant I lived with someone I knew and enjoyed being housemates with and we were both living within our means in a flat we liked, so it was a good choice. The important thing, however, is we discussed this upfront and I offered to do this so we could have a nicer place and set the condition we only viewed band A flats, for which it was affordable.

The rules aren't helpful so decide upfront and stick with it. If that's what you've done no-one has any right to more of your money.

A.Jones

just_me,_again wrote: »

Unfortunately the way council tax exemptions for students work isn't very helpful for mixed households. .....
Unfortunately, if there's some people who aren't exempt the discount doesn't go in proportion to the employed/student ratio of the house. Only one non-exempt person means you get the single person discount and still pay 75%, more than one person not exempt and you pay the full whack, even if that's two of you in a house of 12.

Simple, don't live with students. If you want to pay less council tax, move in to 12 person house with 11 other workers.

Pmarmalade

This should have been agreed upon before the students moved in - raised by either party who had any knowledge of students being exempt from payments.

Moving in with others I wouldn't expect to be paying the full (all of 75% much of the same thing if you're paying it on your own when you share with others) as this defeats the entire point of sharing a flat IMO. Because of this I simply wouldn't share with students for this reason.

It's the sole tenant's fault for not looking into it, and the students should have stated that they won't expect to be paying council tax. If both parties were unaware of the situation then more fool them all...

Marco12452

Some people are greedy, all should have been in writing from the beginning.

Bev_B

OK assuming you all moved in together and 100% council tax bill was £1000 the working person got a single person discount and had a bill of £750, had all three tenants been working your bill would be £1000/3 = £333.33 each so surely the most she should have expected you to pay as students would be (£750-£333.33)/2 = £208.34 each leaving her to pay £333.33. Although this probably wouldn't fair well once there is 2 employed and only one student as it would then go up to £333.33 each regardless of student/employed.
Whatever council tax benefit money you received during the time you were unemployed should go towards paying the council tax, so if 50% of bill was paid (ie £9.61 per week of unemployment) it SHOULD go towards the students annual share as that will go up for them as there are now two employed as above and they have agreed to pay a share.
To conclude, if you were all friends before this and want to remain so consider the fact that the student is getting the worst deal here and the original employed person has had it easy getting away with paying 25% instead of 33% of the bill so will now be feeling the pinch. You aren't out of pocket yet as the council tax benefit was never yours to spend but maybe its time to sit and discuss this so that all understand and hopefully you can reconsider the students 'share' of the council tax before you price them out of their home.

ThinkingOfLinking

Surely council tax benefit never gets paid directly to the claimant anyway? When I claimed, got arrears awarded even though I'd since found a job, the council paid the council tax benefit to themselves, as it were, THEN issued my council tax account with a credit to the amount they'd repaid me, as it were. Housing benefit goes to the claimant but council tax benefit never should.

CIS

Fraid not. It should be in the name of people who are living there - regardless of their student status. I agree in practise that this doesn't always happen correctly, but that doesn't make it wrong.

And they ARE liable if they live there. If the bill isnt paid, and the council cant trace the employed person, they will go after the student regardless of a letter from uni. Trust me on this, I have had it happen to me.

It is a common misconception that students are fully exempt. And I only say this through experience of being liable as a student (legally liable) as well as my mum working in a council tax department.

Not correct.

Since 1 April 2004 a student cannot be held jointly liable with a non-student if they both are equally responsible for the council tax due (e.g both joint tenants/occupiers) - there are a couple of situations where a student is liable for the council tax (resident owner/landlord/sole tenant/sole occupier) but they wouldn't apply in this case (until the student status ended).

Liability does not always mean there's any council tax to pay.

staircase2

MSE_Lee wrote: »

Money Moral Dilemma: Should I split the repayment?

NO NO NO NO NO!

Not on your nelly!...

While you may have been kind enough (daft enough?) to have subsidised other people's council tax while being exempt yourself it makes absolutely no sense at all that a refund you've got for Council Tax you've already (wrongly) paid should be then handed over to them.

Get a back bone! Learn to say 'No'

dave2

It's a more complicated situation than the "easy..." posters seem to think.

Law might say that students are exempt from council tax but then what it goes and does is not the same thing.

What happens is the CT charge (say £1,000pa for convenience) is applied then it basically doesn't count you as a person in the discount calculation, which is basically:
if =0 people means 100% discount,
if =1 person means 25% discount and
if >1 people means no discount.

YOU don't really get exempted. The property bill gets a discount. The relevant consideration in the initial scenario is that the two students have contributed a 25% reduction in the bill. This equates to them having paid 25% of the full bill between them, merely through an alternate route, you can pretend they got some educational grant which pays it directly.

Anyway...

Consider
i) student could live with all students and pay no CT. Best position for students, each pays £0.
ii) employed person could live with all employed people and split CT evenly. Best position for employee and each pays £334.
iii) 1 employed person lives with students, get 25% discount and ?

So what's the net cash position in our two obvious & oft-posted scenarios?

   If worker pays all CT:     If all split CT: 
     BEST  ACTUAL  NCP       BEST  ACTUAL    NCP
A     334   750   +416       334      250    -84
B       0     0      0        0       250   +250
C       0     0      0        0       250   +250

Now we realise that if worker A pays all, our two students B&C are costing the worker £416! If that sounds fair to anyone, how'd you like it if you finished the course, got a job and then the original worker became a student and it's YOU faced with the £750?

But hang on, if they all split the bill then suddenly the worker pays £84 less than if she lived with workers, and it's costing the students £250 more each to live with one worker. That stinks too.

The fairest solution is going to depend on the circumstances. If it was 3 students locked into a 3 year lease and suddenly 1 person quits and gets a job, well that's one person's actions changing the agreed situation for the group. A subjective argument comes into play.

In the subby scenario they all should know before agreeing there is some CT to pay and frankly should all know there is some fair share to be paying.

But it seems clear any solution is going to involve the worker paying £334 or more, and I say the students certainly shouldn't pay more than £334 less their share of the 25% discount = £209.

In my mind the default position is the students split the discount since they brought it to the table and then the NCP difference should be split evenly: (0+209+209)/3=139 each. So now everybody pays exactly £139 more than they would if living with people all of same employment status. Everyone loses the same.

   students split discount:     Students split discount, all split NCP: 
     BEST  ACTUAL  NCP         BEST  ACTUAL    NCP
A     334   334     0           334     473   +139
B       0   209   +209            0     139   +139
C       0   209   +209            0     139   +139
                                         ^^ WINNER!

Moving on, subby notes she is getting a jobseeker's allowance that happens to call itself something similar-sounding to CT. It's still jobseeker's allowance and has nothing to do with your flatmates and should not be shared.

BUT.... /starts pacing up and down the floor, gesturing with pipe

But this requires you to be paying the CT share as a worker, NOT straight splitting the bill. You are no longer exempt plus there's no 25% discount anymore.

In out new scenario, the MMD with subby being the victim and worker A being the villain is a red herring.
Subby & worker A are the villains and the remaining student is the victim.

The new fair share of CT is as follows (bearing in mind the so-called "CT benefit" is not counted and is subby's alone):

   split bill:                 all split NCP: 
     BEST  ACTUAL  NCP         BEST  ACTUAL    NCP
A     334   334     0           334     445   +111
B     334   334     0           334     445   +111
C       0   334   +334            0     110   +110
                                         ^^ WINNER!