2nd house on benefits?

andy.m_2

A rant if you will, also a fact finding mission, I will declare my interest at the end.

If somebody has a house that they are mortgaged on with a tennent paying monthly rental, how can they then claim all their benefits (including housing benefit) on a rental property elsewhere to live in?

She owns property a, has a mortgage on it, rents it to a girl.
She lives in property b, gets housing etc on that.
She does not work a stitch and she has 2 boys under the age of 4 if this adds information to the post?

My question is therefore, if she plays the system (which is flawed, I'll grant you) for the next 14 years (her remaining term on the mortgage and when her youngest reaches 18) then the state tax payer will have essentially paid her mortgage off and handed her a free large asset that she can cash in as she wishes....

karenx

When you put in a claim for housing benefit they ask if you have another property. If that property is up for sale you can claim housing for a certain length of time. If not then you are not entitled.
Sounds like someone hasnt told the truth when claiming.....

MrsManda

As Karenx said, it sounds like she lied on her application form.
If you are sure of your facts then you can report her for suspected benefit fraud either online, by telephone or by letter. You do not have to give your details if you don't want to.

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/BenefitsTaxCreditsAndOtherSupport/BenefitFraud/DG_10014876

BigAunty

karenx wrote: »

When you put in a claim for housing benefit they ask if you have another property. If that property is up for sale you can claim housing for a certain length of time. If not then you are not entitled.
.....

Can anyone provide a link to the specific hb regulations about this?

Reason I ask is that there is a regular poster on ESA/DLA in this situation whose relationship has broken down, whose ex and children lives in his mortgaged house, who is moving to a rental property with the expectation he will get full LHA on his rental property.

I keep telling him to check out his status but could never find anything formal to substantiate the difficulty in getting HB when you own a property.

MrsManda

http://www.dwp.gov.uk/publications/specialist-guides/technical-guidance/rr2-a-guide-to-housing-benefit/working-it-out/income-and-capital/
Property you own but do not occupy [HB Sch 6, HB(SPC) Sch 6; CTB Sch 5, CTB(SPC) Sch 4]

The value of this property is counted as capital but you may be able to get HB/CTB even if the value of the property means that your savings are more than £16,000. This is because the value of the property may be ignored when your savings are worked out, in certain circumstances.

If the property is occupied by an elderly or disabled relative as their home, its value is not taken into account for as long as it is so occupied.

If you have recently acquired the property and you intend to occupy it as your home, its value may not be counted for 26 weeks, or for a longer period if reasonable, from the date you acquired it.

If you are trying to sell the property, its value may not be counted for the first 26 weeks after you start doing this. It may not be counted for longer than this if you are finding it difficult to sell the property.

If you are carrying out essential repairs or alterations so that you can live in the property, its value may not be counted for a period of 26 weeks from the date you first arranged for repairs to be carried out. It may not be counted for longer than this if you are finding it difficult to finish the work.

If you are taking legal action so that you can live in the property, its value may not be counted for the first 26 weeks after you start doing this. It may not be counted for longer than this if legal action is continuing and you cannot live in the property.

If you have left the property after the breakdown of a relationship, and it is occupied by your former partner, its value may not be counted for the first 26 weeks after you left. If the property is occupied by your former partner and they are a lone parent, the property will not be counted for as long as it continues to be so occupied.

tatonette

Would the fact that the rental property is a 'business asset' ie they have a asset that provides an income (hopefully) after all of the expenses have been paid be still classed as capital?

Even if it wasn't, and we are only talking about capital, provided they have enough mortgage on it to wipe out any potential equity, it could not be counted.

Being let out, the income from it would affect the benefit, but only to the extent that there is a legitimate net income!

Best to do what most landlords do, max out the equity with a mortgage, buy another property with the equity raised by the mortgage and get that maxed out.

No capital and no income!!!!

Firefox1975

if the stated facts are correct.

It is fraud - report it and then go curtain twitching.............

andy.m_2

I am going to report it based on facts as stated by the person in question.

The lady is a drain on society who has had everything offered to her on a plate but jacked the whole lot in because she couldn't be bothered to work. She freely admits and laughs about this fact.
She then plays the system (very well I might add to her credit) to support her lifestyle that she believes she is entitled to.
I will not however twitch the curtain as once I have done my civic duty to bring this matter to the authorities then surely I have done my bit and it is up to them to progress the matter?
I am not doing this out of any envy or jealousy, more I want to stop a thief in her tracks.

Thanks all for the advice

sassysar

Can I hijack this thread to ask a question please?
We are thinking of buying a small flat for my mother in law to rent from us. We are not on housing benefit and pay our rent in full. If our circumstances change and we need to claim housing benefit would we be disqualified due to the flat. We can not live in it until our children grow up as it would be 1 bedroom.
Does my 62 yr old mother in law count as an 'elderly relative ' looking at the above exclusion rules. M I Law would be claiming housing benefit and council tax benefit.
I'm thinking more with a view to the new universal credit to be honest as our tax credits would disappear if we didn't qualify for that.

karenx

This would be seen as a contrived tenancy, You are buying a house to rent to a family member and they will be wanting to pay their rent using housing benefit. so in other words you are buying a house and wanting the government to pay for it.
But in answer to your other question, if you were to try claim housing benefit they will take into account you own another house and you wont be entitled.

sassysar

Ok thanks for that.Was wanting to help mother in law as she pays over £100 of her pension as LHA rates say she has to find a flat for £300 a month. She pays over £400 a month , is it because we are relatives as surely the landlady has bought a house and the government is paying for it?
The difference being it would cost the taxpayer £120 a month less if we let to her.
Prob never need to claim housing benefit ourselves but you never know in this financial climate, I suppose in that case we would just sell it.