Lodger on benefits

markymanc

We have a joint mortgage with 6 years to go until paid off. We both work fulltime, however I'm looking at reducing my hours at work and would have to find someway of making up the shortfall in lost earnings

We have a spare room, a friend in need and seriously considering taking him in as a lodger - something we've never done before.

Trouble is he doesn't work and currently receives JSA as his only benefit. He currently lives with family and doesn't claim any other benefit. Would he have to claim rent from the council? How does this work? Are there any benefits/drawbacks to us doing this? He can't even put up a deposit but we have known him for some time and do trust him, that said we've never done this before so any advise would be great.

Will a visit from the council be required and how much can we reasonably expect to receive by doing this?

I understand that as a lodger he will have no rights and if it doesn't work out we can simply ask him to leave? Is this correct?

Voyager2002

markymanc wrote: »

We have a joint mortgage with 6 years to go until paid off. We both work fulltime, however I'm looking at reducing my hours at work and would have to find someway of making up the shortfall in lost earnings

We have a spare room, a friend in need and seriously considering taking him in as a lodger - something we've never done before.

Trouble is he doesn't work and currently receives JSA as his only benefit. He currently lives with family and doesn't claim any other benefit. Would he have to claim rent from the council? How does this work? Are there any benefits/drawbacks to us doing this? He can't even put up a deposit but we have known him for some time and do trust him, that said we've never done this before so any advise would be great.

Will a visit from the council be required and how much can we reasonably expect to receive by doing this?

I understand that as a lodger he will have no rights and if it doesn't work out we can simply ask him to leave? Is this correct?

Yes: your understanding of the situation is correct.

The council would need to be satisfied that this was a genuine commercial arrangement and that you were charging a fair market rent for the room. I suggest that you start by looking in your local paper (perhaps on-line) and finding advertisements for rooms to let similar to yours: perhaps even make a few telephone calls so that you get an idea about how much it is reasonable to charge.

The amount the council is willing to pay him towards his rent is determined by something called LHA: google will show you the figure for LHA for your area.

Once you have decided how much rent to charge (and I suggest you calculate an additional figure as his contribution towards bills), ask your friend to visit the Housing Benefit offices to ask them for a pre-determination. That means that he says that he is thinking of moving somewhere and asks them to calculate whether he would be eligible for Housing Benefit, and if so, how much he would receive.

Since the council acts on the basis that this is a commercial arrangement, I suggest not mentioning that you are friends.

markymanc

I'm not so sure I want to fail to mention anything to them. I'm a bit nervous like that. Does that mean that he cannot claim the rent simply as we are friends?

The main reason I want him in my home is that I already know him, he's the quiet type and rarely would have guests and make noise - I wouldn't want a stranger.

Dunroamin

I can't see any reason why you shouldn't admit to his being a friend of yours; many people share with friends.

I also disagree with upping the rent to cover utilities; he should be paying his share of these out of his JSA.

recoverydust

Housing benefit does not cover food or utilities, they will only pay the shared room rate.
They should not be asking whether you are friends, so no need to answer.
i hope it goes well for you
You may need to tell your mortgage company and your contents insurance
your lodger may need separate contents insurance
as it is a friend be very clear about what is and isnt shared - funny how friendship changes when people live together.
lots of luck
xxx

seven-day-weekend

My last lodger clamed LHA, no problem. I helped him fill in the form as he is dyslexic, we just put down the amount that was his actual rent (not the bit that covers utilities).

It should not present any problems that he is your friend, they probably won't even ask. On the form (IIRC) it asks if the applicant is any relation to the landlord, I don't think it asks if you are friends.

I also agree with what another poster has mentioned - be very clear about what is shared and what isn't, including personal space. If you don't want him coming into your sitting room without permission, say so at the very beginning. Also decide about when he can use the washing machine, when he can cook etc. I used to give my lodgers a written sheet with 'house rules' on it, then there was no misunderstanding.

[Deleted User]

The only thing I would say is consider how to charge Council Tax.

As he is on benefits he can claim some Council Tax Benefit.

But when I did this (exactly the same) I included the Council Tax within the rent, clearly as above they don't pay it within the rent.
When I told him to claim Council Tax benefit he could not as I had included it "free" with the rent, so all in all I messed up what he could claim - and what I could expect to be paid as he didn't have enough to pay more...

I don't know the correct way around this, but someone here must.

I would agree with some above and put the rent as high as possible, that way the Council will pay as near to the LHA as possible. You never seem to get the going rate when dealing with people on benefits, well not single people anyway! I don't think they get enough money to pay what you need them to and live, but that's my opinion and I have never claimed any!

I used to charge £400PCM for my room, we are in a residential area in the West Midlands.

Dunroamin

assj wrote: »

I would agree with some above and put the rent as high as possible, that way the Council will pay as near to the LHA as possible. You never seem to get the going rate when dealing with people on benefits, well not single people anyway!

.

Unless the rent is less, a claimant will receive the appropriate LHA amount.

System

trastor wrote: »

Isn't there also the small risk of being found to be in some sort of relationship with this lodger?

What? You mean the OP and their OH having a threesome with the lodger? I don't think the DWP delve into relationships that far

MABLE

We took in a lodger years ago. It was someone from our underwriting dept at work and I felt sorry for her. Big mistake. She ended up taking over the house. Caused atomspheres and was sneaking in one night stands.

Personally I would try to do without the money and have a contented life.

seven-day-weekend

assj wrote: »

The only thing I would say is consider how to charge Council Tax.

s.

Lodgers are not liable for Council Tax, so you should not be charging them any. The only person who is liable for it is the person whose name is on the bill.