Renting from family and housing benefit

real1314

Simplegirlviv wrote: »

I have been here about three weeks. In my previous house I was getting housing benefit. As yet no tenancy agreement but we are awaiting it. I moved in as the previous tenant moved out. I had no central heating in my previous house and the house I now live in had it.


I also own 25% of the house but will not be taking any of the rent, so all rent is payable to my sister. Does it complicate matters my owning 25%? I am making no profit from living in the house. I just get a better place to live for around the same cost.

You cannot claim any housing benefit at all for a property which you part own.
No ifs, no buts, no appeal will make any difference at all. :cool:

BigAunty

Simplegirlviv wrote: »

...


I also own 25% of the house but will not be taking any of the rent, so all rent is payable to my sister. Does it complicate matters my owning 25%? I am making no profit from living in the house. I just get a better place to live for around the same cost.

Housing benefit is not paid to home owners - as a home owner you have no liability to pay rent, therefore no eligiblity for HB.

For home owners who have a mortgage and who are struggling to pay it, there is the Support for Mortgage Interest scheme and the Shelter website has more info on options for homeowners.

Simplegirlviv

The last tenant was paying £500 per month. I am paying £400 per month. All of which will go to my sister.

BigAunty

Simplegirlviv wrote: »

The last tenant was paying £500 per month. I am paying £400 per month. All of which will go to my sister.

You cannot get housing benefit for a property you own, even if you are joint owner.

As a home owner, there is no liability for you to pay rent whatsover - your personal arrangement with the other joint owner is not relevant to the benefits system.

I suggest that you either arrange an IOU with your sister or get a lodger and pass the lodger's rent onto your sister.

You may struggle to get housing benefit at another rental property, too. See the DWP rules on HB for property you own but do not occupy to understand if you are liable to get HB anywhere else. I will provide a link to it if I can.

EDIT - if you are considering moving to another property, one that you don't own, here is the info for homeowners.

http://forums.moneysavingexpert.com/showpost.php?p=57698079&postcount=2

real1314

Simplegirlviv wrote: »

The last tenant was paying £500 per month. I am paying £400 per month. All of which will go to my sister.

Makes no difference at all. You are a part-owner. You cannot claim HB. :cool:

Simplegirlviv

Thanks everyone. I have decided to sell my 25% to my sister. It will mean that I don't need the housing benefit and that she will be the landlady. Also uncomplicated matters. All I need to do now is agree a price and my rent owed will be taken off what I get as payment for my part of the house.

BigAunty

Simplegirlviv wrote: »

Thanks everyone. I have decided to sell my 25% to my sister. It will mean that I don't need the housing benefit and that she will be the landlady. Also uncomplicated matters. All I need to do now is agree a price and my rent owed will be taken off what I get as payment for my part of the house.

2nd edit - apologies, I've just noticed you don't plan to claim HB whereas I misread your info that you would - you can see from the original text below that you could qualify for HB if you show you had to sell but if this takes your capital over the means tested benefit limits, you wouldn't still get it. Selling up might be your best option if you are determined to stay there and if you don't get employment soon. However, you do need to consider the Former Owner Rule in case you want to claim HB in the next 5 years due to a future loss of a job or illness, and how long your share of funds will last you as payment for rent.

*************

AFAIK, there are rules in place that stop this kind of thing. I believe that there is a bar on a former owner getting HB in the property they used to own for 5 years. I'll see if I can find the regulation. Perhaps another poster can confirm if this rule is still in place?

Also, if you do get a sum from the sale above 6k, it will reduce your HB and all other means tested benefits like council tax, income based JSA or similar, while 16k in capital will reduce your entitlement to nil. Since there are few properties under 64k, it looks like you will exceed these limits if this property is owned outright or has a lot of equity in it.

And, yes, there are also rules in place that stop claimants from giving away their capital in order to qualify for benefits - for example, you can't just 'give' your share to your sister. Google 'deprivation of capital' to understand why you will be treated as if you actually have the money, a concept known as 'notional capital'.

EDIT - the ban on ex-homeowners receiving HB for a property they have owned in the last 5 years is known as the 'Former Owner Rule'. From a quick google, I understand that if the person can show they absolutely had to sell, they may still qualify for HB.

http://www.dwp.gov.uk/docs/a5-2009.pdf

However, you can't make the equity from your share vanish - it will be expected that you receive the market value from your sister for your 25% of the property and you have to consider whether your sister has either the funds or can find a lender for the higher mortgage for it.

miduck

Simplegirlviv wrote: »

Thanks everyone. I have decided to sell my 25% to my sister. It will mean that I don't need the housing benefit and that she will be the landlady. Also uncomplicated matters. All I need to do now is agree a price and my rent owed will be taken off what I get as payment for my part of the house.

BigAunty is correct, what you describe is blatant intentional deprivation of capital.

BigAunty

miduck wrote: »

BigAunty is correct, what you describe is blatant intentional deprivation of capital.

Well, to qualify this statement, its a very complex area, the onus is on the DWP to prove intentionality on the part of the claimant whereas it's clear the OP doesn't really know her way round the benefits system - those wanting to deprive themselves of capital on this forum tend to know a lot more than the basics and it's more about how they can fly under the radar and the type of spending they can get away with, etc. Clearly the OP is actually thinking more in terms of the simplicity of not claiming HB.

However, it is a possible future sticking point if the OP doesn't realise that the sale of her property share is classed as capital (even when she's elected for her sister to retain it in lieu of future rent) and inadvertently claims council tax benefit and income based JSA if the sale of the property share raises 6k or over.

EDIT - I think this is the first time I've ever seen this proposal/scenario on the benefits forum so I think the posters here might be a bit rusty on the restrictions and rules.

Simplegirlviv

Just to reiterate what i said. I am going to sell my share of the house and so i wont need the Housing Benefit. Also i do work but i am on a low wage so without the complication and no capital i would have been entitled to housing benefit. By selling my share of the house i i will have capital of more than £16,000 so i don't need to worry about whether or not i can get any benefits.