LHA and Council Tax

Auntie_Julie

Hello

I have a friend who privately rents a bedsit. He is a 61 year old male on income related job seekers. His weekly rent is 80 and housing benefit is capped at a little over 60.

His bedsit is classed by the council as a separate dwelling for council tax so he gets a bill for 15% of his liability.

My question is why, for housing benefit purposes, his bedsit is classed as a 'shared room' but when it comes to council tax it is classed as a self contained dwelling. It seems to me that the system is manipulated to the councils favour. He (and those in the same position in the building) is really struggling to feed himself after the bills are paid.

If the bedsit were classed as 'self contained' for housing benefit purposes all of his rent would be covered.

Is it worth questioning this with the authority?

Also, I'm not sure that the bedsit should be 'self contained' anyway, the bathroom facilities are shared (the building is an HMO) and the so called 'kitchen' isn't up to much. There is a sink and cupboard, but the 'cooker' is a baby belling table top type, there is no kitchen table or chair.

I know there are some brilliant experts on this forum that know their way round these council minefields, hope some of you can help.

Thanks for reading!

pmlindyloo

First of all Housing benefit and Council Tax reduction are two separate issues.

Because he is living in a bedsit he will be receiving the local housing allowance for shared accommodation (which it seems he is)

As he is living in a HMO then the landlord/owner is usually the one who is liable for the council tax. It seems from what you say that the landlord has split his liability between the number of occupiers of his house and is charging them the council tax. Your friend should not be receiving a bill from the council as there is no such things as multiple liability for council tax.

He should look at his tenancy agreement and see what is says about council tax.

At his age he is entitled to the one bedroom rate for HB so he could, in theory, find a one bed place and get the maximum local housing allowance (one bed rate - you can look this up on his local council website) and also get council tax reduction for a one bed place. (he may have to pay a little council tax - it depends on his local council - again the percentage he has to pay should be on the council website)

It might be a good idea to speak to his local council about his council tax. Because he is on JSA then he is entitled to help with his council tax. I am not sure how this is worked out for those living in a HMO.
Perhaps someone else can help.

Edit

Have just read your post. You say he gets a bill for his council tax - who is this from? Where does he live? (country?)

And just to check further - has he got a single tenancy agreement or a joint one with other people? Does the landlord live on the premises?

Housing_Benefit_Officer

It would be the Valuation Office Agency that has made each bedsit liable for its own Council Tax as if it was a self contained property.

http://www.voa.gov.uk/corporate/CouncilTax/multiOccupiedHomes.html

So it is correctly banded for Council Tax as it has its own cooking facilities.

For Housing Benefit purposes it is a room not a self contained flat so would only get a SRR LHA rate.

If he had the sole use of a second room then he would get the 1 bedroom rate rather than the SRR rate.

A clever landlord could maximise his income by allocating rooms for the sole use of a single tenant (i.e. the living room is for the sole use of tenant A so they get the 1 bed rate than SRR or one of the bathrooms is for the sole use of tenant B so they get the 1 bed rate) - I don't know why more landlords don't use this loophole.

A landlord with a 3 bedroom, 2 living rooms, 2 bathrooms in a house with 3 separate tenants would normally only get 3 x SRR rates of HB.

If he allocated a living room each to tenant A and tenant B and a bathroom to tenant C for sole use he would get instead 3 x 1 bedroom rates instead of 3 x SRR rates.

Auntie_Julie

Thanks for the replies.

Seems it as complex as I thought!

To clarify some points:

He gets a 'band a' bill directly from the LA (cornwall council). He gets the standard single person discount but has to pay 15% of the bill.

He has his own tenancy agreement, not sure what it says about council tax beyond him being responsible for paying it.

As far as the bedsit not being self contained for HB purposes, I wouldn't say that there has been much in the way of 'structural' alterations. The landlord has just put a sink in over a standard unit, a freestanding fridge with ice box and a unit with the tabletop cooker.

I guess that it shouldn't be a surprise if the rules favour the LA not the tenant...

Desperately trying to find somewhere else for him. Not a nice place to live, other tenants are either drunk, stoned or falling out.

xylophone

Is he/will he soon be eligible for pension credit?

enabledebra

He should talk to the council billing department about his tenancy- but he needs to be aware the landlord might get annoyed and serve notice. It sounds like it may well be a property in multiple occupation in which case the landlord is liable and should have the council tax bill in his own name.

It's unlikely that the valuation tribunal have looked at it- far more likely that the landlord has just handed over tenants names and said they should pay.

A simple overview is here http://www.landlords.org.uk/news-campaigns/news/council-tax

I just noticed the 'kitchen' isn't shared? If so it won't be an HMO. There should be discretionary funds from the council to help out with shortfall in the new 'council tax support' in hardship (the 15%) but it may be difficult to get as everyone will be in hardship generally.

Auntie_Julie

xylophone wrote: »

Is he/will he soon be eligible for pension credit?

Not until next September, but thanks for pointing it out.

Thanks to everyone who's replied, much appreciated. I'll pass on your comments and drag him along to the council for a chat I think.

RAS

When does his fixed term end?

He might be better off looking for a proper one bedroom flat within the LHA limit. The rent would be higher but it would be covered by the LHA and the CT would very likely be the same.