Housing Benefit Question

[Deleted User]

My parents are currently in receipt of housing benefit. We are considering purchasing the property next door to us, for them to live in. We were wondering it we advertised the property via a letting agency , who then arranged my parents tenancy etc whether my parents would still be entitled to claim housing benefit.
Thanks for any advice, we don't wish to fall foul of housing benefits.

Scarlett1

my LA dont pay housing benefit to anyone renting from a family member as they expext you to live there rent free, I think some LA's are different thought but I would think that you would have had to already been renting out the property before your parents moving in, best thing to do is contact the housing benefit section or the CAB.

real1314

Scarlett1 wrote: »

my LA dont pay housing benefit to anyone renting from a family member as they expext you to live there rent free, I think some LA's are different thought but I would think that you would have had to already been renting out the property before your parents moving in, best thing to do is contact the housing benefit section or the CAB.

Your LA are (or t least may be) breaking the law.

The rules on renting from family are not locally devised, they are national. You can't claim for rent whilst living in the same property as a family member, but you can claim if it's a seperate property.

As long as 1) it's arranged on a commercial basis (which doesn't mean you need to use an agent)
2) Paying rent is a requirement of their residence

I'd suggest looking at a copy of The Guide to HB and CTB by Zebedee, ward and Lister. You might find a copy in the library or WH Smiths. The bit you want is "Contrived Liabilities".

It's really not as big a deal as some make out. I've seen loads of cases, even one where a house had an extension put on to make a "granny annex" which was allowed.

Ross01

Scarlett is definately wrong. The only time you can not definately get benefit is if you and the close relative you are charging rent to both live in the same dwelling.

If it is a different property then you should be able to claim providing it is definately a commerical agreement. You would have to establish that it is a commercial tenancy. Ie that you would treat your parents the same as any other people you lent to. If this is the case then it should be fine.

I can see some difficult questions being asked by the LA to establish that it is commercial. Especially if you have no history of letting properties, have bought this property and immediately let it to your parents (without even showing it to any other potential tenants), and that it is next door to your own home. However this in itself does not prevent it being commercial.

If the LA ask too many questions then point out that you need the rent money from the property to pay your mortgage, and if they do not pay benefits then you will be forced to evict you parents like any other tenant. The letting agency makes it look more like a commerical activity so would certainly help your case.

Morglin

"Where a Landlord Rents Another Property to their Close Relative

There is no legal rule which prevents close relatives entering into a legally binding agreement to pay rent and claim Housing Benefit where they do not occupy the same dwelling. The authority would again be looking at whether it is a commercial agreement and whether it was set up to take advantage of the Housing Benefit system.

Please note that Housing Benefit is not payable in the following circumstances:

where a person rents their accommodation from a trust of which they are a trustee or a beneficiary (Reg 7(e))
where a person rents their accommodation from a company of which they are a director or employee (Reg 7(e))
where a person rents accommodation from a trust of which his/her child or partner's child is a beneficiary (Reg 7(f))
where the person who rents the accommodation was previously a non-dependent of someone who still resides in the property. If you can show that the tenancy was not set up to abuse the system you should still be able to get Housing Benefit (Reg 7(g))"

http://www.housingoptions.org.uk/gi_factsheets/gi_fs_17.html

Lin

Scarlett1

Ross01 wrote: »

Scarlett is definately wrong. The only time you can not definately get benefit is if you and the close relative you are charging rent to both live in the same dwelling.

no Im not wrong as im talking through personal experience, I even have a letter to say I was refused housing benefit due to renting from a family member, that was a few years ago and I had to move out and rent another property which was more rent than the previous one and they pay it.

Morglin

The above rules are the ones currently in force.

Lin

real1314

Scarlett1 wrote: »

no Im not wrong as im talking through personal experience, I even have a letter to say I was refused housing benefit due to renting from a family member, that was a few years ago and I had to move out and rent another property which was more rent than the previous one and they pay it.

iirc the rules were changed in the late 90s. That isn't to say that you weren't refused (or even shouldn't have been), as it may be that either

1. The authority made an incorrect decision

or

2. You or your relative gave information that suggested it was not on a commercial basis.

Morglin

If anyone has any problems with a LA and this situation, SHELTER are excellent at advice:

http://england.shelter.org.uk/advice/advice-120.cfm

Lin