Housing benefit, ESA and Subtenants...

earthbound_misfit

Hello, hoping for some advice... I thought I'd understood how this all works but now a bit confused!
I am currently claiming ESA assessment phase rate (ie. same amount as JSA). I also have put in a claim for housing benefit. I privately rent a 2-bed flat, and sublet (on a lodger's agreement) the spare room for roughly half rent + half council tax.
I previously lived in this flat alone as was entitled to more housing benefit when iller/getting DLA, there are tons of 2-beds here but only occasional and more expensive 1-beds... now I'm only entitled to the single room rate as I'm under 35.
The reason I hae a lodger and not a joint tenancy are mainly to do with complications (and potential fees!!) of having to chop and change tenancies every few months (current lodger was friend of a friend needing somewhere for a few months, next one lined up might be moving abroad next year...) especially considering they might not move in on precisely the day I pay the rent. Other reasons are: I need some choice over who I live with as I have mental health issues and need my home to feel 'safe', and also worried that joint tenancy means they count as in my household as a non-dependent and are expected to keep me!

I was under the impression that they disregarded the first £20/week of his rent, then subtracted the remainder from the total rent on the flat, then gave me housing benefit for the remaining figure (which is under SRR). Then the £20/week would be deducted from my ESA.

Am I right, as I have had to contact HB and ESA and there seems to be some confusion.

Also I am unsure about council tax benefit (I have to pay 20% regardless in this area). My lodger's rent technically covers it, although if its being counted as 'rent' (which it is, as he gets HB) and only my name is on the bill, would I get the maximum CTB or would they assume he is giving me half?

To add to the confusion I am hoping to become self-employed in the next two weeks... so would rather have this sorted by then :eek:

Thanks for any help/advice!

earthbound_misfit

ps. Can post figures if necessary.

lukieboy96

If you are under 35, isn't it the shared room rate?

earthbound_misfit

Please... anyone in the know here?
yup I'm entitled to shared room rate theoretically...
Problem is they want to take my lodger's rent off my ESA saying it's 'income' but I need it to pay the other half of the rent!!
I'm really scared, I can't live somewhere else cos it's so hard to find somewhere if you're getting HB, also I need chice over who I live with or I will just break down ike in HMO's before... this flat has helped my mental health so much. Please help.

Housing_Benefit_Officer

1) If you have a lodger you will get the 2 Bedroom rate as both bedrooms will be in use.

2) If you have a lodger (with at least one meal included in their rent) then the first £20 per week of rental income is disregarded as income then 50% of the remainder is disregarded as income. (i.e. rent £100. £20 disregarded = £80 then 50% of this figure is disregarded = £40 taken into account as income).

3) If it was just a sub tenant (no meals provided) then only £20 per week of the rental income is disregarded.

Housing_Benefit_Officer

earthbound_misfit wrote: »

I was under the impression that they disregarded the first £20/week of his rent, then subtracted the remainder from the total rent on the flat, then gave me housing benefit for the remaining figure (which is under SRR). Then the £20/week would be deducted from my ESA.

You will get the 2 bed rate.

As you get ESA then the DWP will take the rental income into account as income reducing your ESA using these rules if you include meals with the rent - £20 is disregarded as income then 50% of the balance is taken into account as income.

If you still get some ESA then the Housing Benefit Department will pay you the 2 bedroom LHA rate not the SRR rate for a single person. As long as you get ESA I there will be no reduction in the 2 bed LHA rate you receive.

Once you become self employed then the Housing Benefit Department will add rental income onto your income using the same rule as above - £20 disreagrded then 50% of the balance is disregarded.

Your Housing Benefit claim will be based on a 2 bedroom LHA rate as you have a second person in the household.

earthbound_misfit

Thank you... Would you be able to point me in the direction of any official rules/guidance? Even phrases to google to find some?

Bit confused about the term 'household'. My lodger only shares a bathroom, kitchen and living room and has his own bedroom that I do not enter... although I suppose I could/there's no lock. We are unrelated, don't share meals/shopping, and the rent he pays doesn't include bills (we split those when they come in as it varies).
I guess you're saying he is a non-dependent in my household so his income is taken into account.
However I thought HB specifically excludes lodgers or subtenants as non-dependants?
Also he is getting HB SRR based on his lodger's agreement!

I'm worried I'll have to ask invasive questions about income from any future lodgers...
How much would they be expected to contribute? Half the rent? Only I intended to change it so I paid more than half as I have a significantly bigger bedroom (space needed for SE). The amount I pay would still be below SRR in this case... but it doesn't seem right to charge half as that would make the small room expensive for the area.

earthbound_misfit

I've just spoken to housing benefit office. They say his (ongoing) claim for benefit as a lodger means he's not part of my household. Presumably if he was, he couldn't claim HB so I'm stuck anyway.
They also pointed out that his rent also counts as income (after £20 disregard) when working out HB in the event of me being self employed.

pmlindyloo

I am loathe to contradict Housing Benefit Officer but I am inclined to believe that you would only receive the shared room rate as regards Local Housing Allowance as you are under 35 and share your house with your lodger. i.e are sharing facilities. Hopefully I can be corrected with a link backing it up.

As already said the rental income will be taken into account with a £20 disregard as regards your ESA. Unfortunately for you income from a lodger is counted as just that - income.

You should still receive your council tax reduction as your lodger is not counted as a non dependent (which would mean a deduction for you as regards your council tax reduction claim )nor responsible for the council tax.

You may be better off financially when you are assessed for ESA as you will have a component added to the assessment rate.

As regards the rent from your lodger. Since he is receiving the shared rate of HB then it would seem sensible to charge him this as rent and then add a sum for council tax on top.

Of course it is difficult to comment on the money side of things since we do not know if your lodger is on a low income or claiming benefits.

Apart from the moral side of things is there any reason for him to know what the rent is or the council tax situation? Could he find somewhere cheaper?

Not trying to be devious here, but just trying to be practical since taking on a lodger in your case doesn't seemed to have helped much!

Housing_Benefit_Officer

pmlindyloo wrote: »

I am loathe to contradict Housing Benefit Officer but I am inclined to believe that you would only receive the shared room rate as regards Local Housing Allowance as you are under 35 and share your house with your lodger. i.e are sharing facilities. Hopefully I can be corrected with a link backing it up.

One bedroom is awarded for each of the following:
Adult couple
Other adult aged 16 years or over
Two children under the age of 10
Two children aged 0-15 years of the same sex
Other children
Single person under 35 years who lives alone, does not have a carer and gets middle/high rate care Disability Living Allowance or Personal Independence Payments
Person under 22 years who was subject to a care order
Non resident overnight carer who meets the qualifying criteria
Lodger/subtenant
An approved foster carer with a current placement or where the last placement ended no more than 52 weeks previously

So a single person under 35 would get the 2 bed rate if they had a sub-tenant or lodger.

Numerous links if you Google

http://www.angliarevenues.gov.uk/lha_size_criteria.html

http://www.chelmsford.gov.uk/lha

Far too many to list

earthbound_misfit

pmlindyloo wrote: »

I am loathe to contradict Housing Benefit Officer but I am inclined to believe that you would only receive the shared room rate as regards Local Housing Allowance as you are under 35 and share your house with your lodger. i.e are sharing facilities. Hopefully I can be corrected with a link backing it up.

Yes, that's what HB have told me. However, there seems to be nothing to allow for the fact that his rent is topping up my SRR to the actual rent.

pmlindyloo wrote: »

As already said the rental income will be taken into account with a £20 disregard as regards your ESA. Unfortunately for you income from a lodger is counted as just that - income.

The problem is my rent shortfall is about £45 a week, yet I can only get £20 before I start losing money elsewhere! So I'm always going to get about £25 a week lopped off the basic JSA/ESA - ie. I'm left with about £45 to live on each week! I've done all the calculations for different amounts of rent (from subtenant) and different earnings from potential self-employment, and until I am earning quite a lot (well a lot for a startup!) it keeps coming back to this figure of £45 a week left to live on!

pmlindyloo wrote: »

You should still receive your council tax reduction as your lodger is not counted as a non dependent (which would mean a deduction for you as regards your council tax reduction claim )nor responsible for the council tax.

Yes, this seems to be the case. So his rent is about £35/week more than half the rent. I did it like this as I was hoping I'd be back in work and didn't want to be paying the whole council tax! Obviously I'm happy to have this extra removed from benefits somewhere or other.

pmlindyloo wrote: »

You may be better off financially when you are assessed for ESA as you will have a component added to the assessment rate.

Yeh... but that's 6 weeks away, and being realistic a lot longer as I'll be n the appels merry-go-round again. I really wanted to make a go of it with self-employment too. I've been unemployed 3 years solid (and loads before that too) and I thought I'd found a route into work that I'd be able to manage. I'm so tired of dealing with Atos. I've spent my whole adult life fighting with the mental health system (for treatment) now it feels like I have to take on the whole government. I can't see any way on.

pmlindyloo wrote: »

As regards the rent from your lodger. Since he is receiving the shared rate of HB then it would seem sensible to charge him this as rent and then add a sum for council tax on top.

Isn't that fraud if I'm getting full CTB?! Also, he's on benefits himself. My new lodger won't be though so I can separate the rent/CT. Although back to the fraud question.

pmlindyloo wrote: »

Apart from the moral side of things is there any reason for him to know what the rent is or the council tax situation? Could he find somewhere cheaper?

Not trying to be devious here, but just trying to be practical since taking on a lodger in your case doesn't seemed to have helped much!

Unsure what you're getting at here..? I just think it's right to charge a fair rent, and yes equivalent rooms to rent are similar prices round here. But regardless, I end up with £45 a week to live on after paying the rent... (just did calculation today).

I just don't know what to do. I've been biding my time and am ready to do the self-employment thing. But perversely can only keep my home (which keep me sane) if I don't work and pursue ESA. I know where the government are heading and i'm doomed for workfare, I can't face this anymore