Housing benefit, ESA and Subtenants...

Housing_Benefit_Officer

Housing Benefit rules mean it is beneficial for you to take in a lodger.

2 bed rate of LHA instead of SRR.

£20 + 50% of the rent money disregarded as income.

Under Universal Credit you will be even better off financially by taking in lodgers.

http://www.helpwithrent.org.uk/advice/lodgers/

Taking in Lodgers

If you live alone and have a shortfall in your rent you could consider taking in a lodger to supplement your income.

The advantages of doing this are:

Your Housing Benefit will be based on the ‘two room’ rate rather than the ‘one room’ or even ‘shared’ rate of Local Housing Allowance
The rent you charge can boost your income and is tax free up to £4,250 per year (£350 per month)
Renting to a lodger is very flexible – it is up to you how long you allow them to stay in your home
The extra income might allow you to stay in your property rather than having to move
You should remember that there are some disadvantages to taking in a lodger:

Any rental income you receive from your lodger will need to be notified to both your local Housing Benefit office and the Job Centre or Pension Service. This income may reduce the amount of Housing Benefit you receive
You will need to provide the lodger with a bedroom of their own and allow them to use your kitchen and bathroom
Before agreeing to take in a lodger then make sure you consider all the issues involved. For example:

Will your landlord allow lodgers to stay in the property with you? Make sure you ask permission before advertising your property or taking anyone in
Will your insurance still be valid? Check with your insurer before agreeing to take a lodger in. Don't assume you can't be covered if your present insurer declines. The National Landlords Association has details of specialist insurance policies on their website
How are you going to advertise your room? Consider placing an advert in your local paper or using websites such as https://www.gumtree.com/flatshare or https://www.spareroom.co.uk

earthbound_misfit

That sounds great, but the HB office are insisting I'm only entitled to SRR!
They said the fact that he has a claim to HB based on his lodger's agreement proves we're not a household and so I'm assessed on my need for one bedroom SRR! Is there something I can quote at them?! My own council's website is not very detailed so there's nothing there.
Also, it's not coming off my HB but my ESA...

earthbound_misfit

Aha! I have found the relevant guidance via a previous post of yours, Housing Benefit Officer - thank you!
However, my situation differs a little. The problem seems to be that my lodger is claiming HB SRR for his room and as such is seen as in a different household.
The situation arose like this: I was out of the country for a few months and sublet the two rooms in the flat, for approx. half the rent and council tax. I called the whole figure 'rent'. They were both on standard 'lodger's agreements' as when I looked over sample tenancy agreements this seemed to fit the best, also due to the short nature of the contract and the fact that I was technically still living here/it was my only address in the UK/I had intent to return. Lodger 'A' then left and I moved back in, with lodger 'B' still living here.

Just to add - the fact that I included council tax in the rent figure means that my lodger's rent is actually over half (though almost exactly SRR as cheapish property).

earthbound_misfit

Also, on reading through the guidance, it does say that lodgers and subtenants should be included as 'occupying the property'... however further down it says:
When the young individual has a non-dependant living with them, or treated as living with them, they would be entitled to the two bedroom LHA rate. Where they have any other person living with them, for example a boarder, then the shared accommodation rate will still apply.
The guidance is out of date - 2011 - and states 'under 25' where it would now be 'under 35'... but I doubt they've changed this bit.
Argh this is awful - the woman from HB was really rude to me, saying "it's your age that's the problem" accusingly!
I'm really frightened abut this... I'm sick of being poor, it's crap.
The only things I can think of are fraudulent.

earthbound_misfit

So... for anyone who's followed this/finds it in future...

The HB office has now said it's a weird anomaly in the rules, so the case will be sent to a DWP decision maker (via HB) to see if they can take into account the fact that his rent is needed to pay for the flat rather than being personal income.

I'm going to try and sweet talk my landlord into doing 6-month joint tenancies once I get the new lodger in September... But i'm really, really scared about this as I've had some horrific experiences in shared houses. And none of this would happen if they hadn't changed the stupid under 25/35 rule! It's seriously counter-productive, the best thing so far for my mental health was when I had enough to live here alone... they are seriously impeding my recovery/return to employment. (Btw it's an old flat that's cheaper than a 1 bed, I don't expect to have a 2 bed just for the sake of it....)

pmlindyloo

I actually found the Guidance Manual to Local Housing Allowance today and saw that it does indeed say as you are under 35 (yes, they say 25 but that age was raised) that you would be entitled to the shared accommodation rate. If you had a non dependent (say a friend) then you would be entitled to the 2 bedroomed with a non dependent deduction but then your 'friend couldn't claim HB. Vicious circle.

I apologise if you misconstrued what I was saying re: the rent and Council Tax. First I didn't realise that your lodger was on other benefits and secondly I didn't realise that you received 100% council tax reduction - most councils ask everyone to pay, at least, a little. (Oh, just reread your post. Are you paying any council tax at all?)

I do hope you can resolve this in some way as taking in a lodger for you seems financially hopeless. Perhaps when you start your self employment you will be able to claim some working tax credits.

Have you put your details in to the benefit calculator here to see if your 'sums' are correct? www.turn2us.org.uk (click on Benefits Search for the calculator)

I know you are trying to be fair to your lodger. Are you charging him the Shared Accommodation HB as his rent? Some figures might be useful so we can check if you have missed something (I'm sure you haven't!)

earthbound_misfit

pmlindyloo wrote: »

I didn't realise that you received 100% council tax reduction - most councils ask everyone to pay, at least, a little. (Oh, just reread your post. Are you paying any council tax at all?)

I have to pay 20% of the bill. When I get a new lodger I was going to reduce the rent and get his name on the CT bill (doesn't make much difference to what I'm left with though). I know subtenants aren't supposed to be able to do that, but the council insist it's fine...

pmlindyloo wrote: »

I do hope you can resolve this in some way as taking in a lodger for you seems financially hopeless. Perhaps when you start your self employment you will be able to claim some working tax credits.

Unfortunately, working tax credit is counted as income for LHA purposes, so I'm no better off until I'm earning >£70ish a week. In fact I need to be earning £100ish a week through self-employment (never going to happen straight away) before I even end up with the equivalent of JSA to live on! (after rent). WTC seems to be much lower than it used to be too!

pmlindyloo wrote: »

Have you put your details in to the benefit calculator here to see if your 'sums' are correct? www.turn2us.org.uk (click on Benefits Search for the calculator)

I will try... Thank you.


Figures are -

Rent: £450 pcm (£105/week)
Council Tax: £75ish pcm
Lodger's rent £260pcm
SRR: £60ish/week

for comparison:
1-bed rate: £93ish a week
2-bed rate: £103ish a week