Can LHA be claimed?

publicsectorworker

I have 2 brothers, one on jsa and second self employed. We jointly own a 3 bed house. I own and live in a private house. both my brothers live in the 3 bed house and second brother also owns a 2 bed flat.

If the 3 bed house is put in my name and second brother makes his 2 bed flat his main residense can first brother rent the 3 bed house with me as landlord and claim LHA which would be about £80/week according to directgov? Also could he do this if second brother was still living there?

enabledebra

Close relatives can rent to each other if they aren't living together and the tenant can get LHA but the liability to pay rent may be deemed 'contrived' on not 'commercial' and if so LHA won't be paid. The fact that he has lived there without paying rent so far would be a big factor in the decision.

Edit, oh and if he owns it- no LHA.

jonliv

I don't think your brother will be able to claim LHA because

Not all private tenants can claim LHA. They include tenants:


whose tenancy agreement has been created to take advantage of the Housing Benefit Scheme.

who previously owned the property they rent in the last 5 years

Your brother fits both of these criteria

Dunroamin

This must surely be a wind up!

real1314

publicsectorworker wrote: »

I have 2 brothers, one on jsa and second self employed. We jointly own a 3 bed house. I own and live in a private house. both my brothers live in the 3 bed house and second brother also owns a 2 bed flat.

If the 3 bed house is put in my name So, the brother on JSA will completely relinquish his right to the house just to claim £80pw LHA? and second brother makes his 2 bed flat his main residense can first brother rent the 3 bed house with me as landlord and claim LHA which would be about £80/week according to directgov? Also could he do this if second brother was still living there?

1. JSA Brother would be committing a deprivation of capital action by giving up ownership. Failing to declare that he has done this is an act of fraud.
2. There is a rule that prevent a claim for a property which you have owned in the last 5 years.
3. The claim would be a contrived claim.

Put simply the JSA brother would be committing fraud; you would be aiding an act of fraud. :cool:

publicsectorworker

enabledebra wrote: »

Close relatives can rent to each other if they aren't living together and the tenant can get LHA but the liability to pay rent may be deemed 'contrived' on not 'commercial' and if so LHA won't be paid. The fact that he has lived there without paying rent so far would be a big factor in the decision.

Edit, oh and if he owns it- no LHA.

If second brother sold his share of the 3 bed house for near market value wouldnt that be commercial and not contrived. is there a link anywhere to giuidance on this?

enabledebra

There is no way that your brother will get LHA. Getting around one rule just puts him foul of another- its no win.

publicsectorworker

real1314 wrote: »

1. JSA Brother would be committing a deprivation of capital action by giving up ownership. Failing to declare that he has done this is an act of fraud.
2. There is a rule that prevent a claim for a property which you have owned in the last 5 years.
3. The claim would be a contrived claim.

Put simply the JSA brother would be committing fraud; you would be aiding an act of fraud. :cool:

No he would sell his share, pay off debts and be left with less than £16000. Does the 5 year rule still apply if ownership is 33%. is there a link to this?

princessdon

publicsectorworker wrote: »

No he would sell his share, pay off debts and be left with less than £16000. Does the 5 year rule still apply if ownership is 33%. is there a link to this?

Debts are irrelevant - he can't pay them off generally. They would treat payment of none urgent debts as DOC.

That is aside from the 5 year rule.

Caz3121

If money is tight, instead of trying to work away around defrauding the benefits system, why don't you get a lodger into the spare room, or 2 rooms if the other brother is moving out

publicsectorworker

princessdon wrote: »

Debts are irrelevant - he can't pay them off generally. They would treat payment of none urgent debts as DOC.

That is aside from the 5 year rule.

Selling would not put too much over £16000 so could maybe probably sell for lower price to get under. But does the 5 year rule apply if he doesn't own the house by himself.