Lodgers, Council Tax and Benefits

timbstoke

I'm moving in with a friend who is unemployed and in receipt of JSA and Housing Benefit/Council Tax Benefit. She is trying to sort out the council tax situation. As I understand it:

- Anything I pay her over £20/week rent affects her benefits
- She loses her single person CT discount when I move in
- As she is the only person named on the tenancy agreement, it isn't possible for us to have joint names on the CT account. (this is what the council told her)

So, this being the case, how do we best arrange the Council Tax payments? She currently has to make a contribution on top of her CT benefit, because of her spare bedroom (which I am moving into), but my understanding is that if I give her money towards the CT, it comes straight out of her JSA, so doesn't actually help her pay the bills at all. To me, the simplest approach would be for me to simply pay whatever is left after her CTB pays her share directly to the council, but I don't know if this still counts as 'giving her money' since she is legally the one responsible for CT.

Any thoughts or advice on this is appreciated.

RAS

Hi

You become a non-dependant adult and she will need details of your income to inform the Council who will calculate what contribution you need to make to both rent and CT.

Go to www.turn2us.org.uk and put in the details so you have an idea what it is likely to be. And check your local councils web-site for non-dependent contributions.

timbstoke

Thanks, but based on the information from the Housing Executive (http://www.nihe.gov.uk/non-dependants) lodgers do not count as non-dependants.

I'll take a look at the turn2us calculator to see if that helps.

Housing_Benefit_Officer

RAS wrote: »

Hi

You become a non-dependant adult and she will need details of your income to inform the Council who will calculate what contribution you need to make to both rent and CT.

Go to www.turn2us.org.uk and put in the details so you have an idea what it is likely to be. And check your local councils web-site for non-dependent contributions.

You are not a non dep - this is the wrong info.

You are a lodger. The Council doesn't need your financial details as you are a lodger and not a non dep.

As your friend is in receipt of Job Seekers Allowance it will be the DWP who will take the rental income into account and reduce her JSA accordingly (she needs to check if the DWP use the same rules for claulating rental income from lodgers as local authorities do).

When a benefit claimant rents out their property to a lodger they lose their Single Person Discount but their Local Council Tax Support is increased by 25% to cover this loss.

As for the rent charged - if you are a lodger and receiving at least one meal then the first £20 of any rent charged is disregarded and then a further 50% of the balance is disregarded.

For instance if you are charged £100 per week - £20 is automatically disregarded and then a further £40 is disregarded so only £40 or the £100 is counted as income.

As well as getting 25% extra of her council tax paid - she will also no longer have a 14% reduction in her housing benefit due to having a lodger in the spare room.

The benefit system is set up so it is beneficial for people to take in lodgers.

Your friend needs to check with the DWP and her local council first just to make sure they fully understand the situation but the local council should give the same advice I have given above.

Housing_Benefit_Officer

I should add - if you just rented a room for £100 and had no meals provided then only £20 would be disregarded - so there are different rules for a lodger and tenant. If your friend provided a breakfast or evening meal with the rent she charged so you became a lodger then more of the rent she cahrges is disregarded as income.

timbstoke

Great advice HBO, thanks! The lodger arrangement you describe sounds like exactly the situation we're in, and more or less the best scenario for us benefits-wise. I'll do some research for resources to try and back up our claim before she goes to the DWP.

Thanks

timbstoke

OK, my friend has apparently spoken with the benefits people, and their stance is that, as long as my rent is paid directly to the landlord, and not to her, her JSA will not be affected. The fact that my name isn't on the tenancy agreement is apparently irrelevant as long as the money doesn't go through her bank account.

The council have told me that she needs to inform the DWP when I move in, and they will review her council tax entitlement from there.

This seems wrong to me, but she's adamant that this is the case.