Kids living in annexe & paying rent, baby benefits?

Murphy2011

Need some help please!
My stepson lives in an annexe we have attached to the main house with his girlfriend who is expecting their first child in about 3 weeks.

The annexe has living room, bedroom and ensuite and they share our kitchen, they are essentially self-contained with a lockable door and pay us £120 per week rent which includes bills. We don't have a tenancy agreement with them but are happy to do what is needed to help their situation.

My stepson doesn't earn a huge amount, approx 40 hours per week at current minimum wage although this should rise soon, albeit only by about 50p per hour. His girlfriend worked before starting her maternity at beginning of April again on minimum wage and her employer will pay maternity pay which I believe is starting at about £138 per week.

My hubby and I are on a Debt Management Plan & whilst we would love to tell them to forget about the rent we really can't afford to but we do give them free rein in the food cupboards and freezer and are getting nice 2nd hand baby stuff when we can!

My question is around benefits, working family & child taX credits essentially. On the benefits calculator there is a living with parents option and a private tenant option. As my husband and I do have a good income I'm pretty sure that the kids wouldn't qualify for anything if we go with them living with us but are they proper private tenants for benefit purposes? (OH & I also have 2 other children actually living at home still but they are both in full time education)

Please don't misunderstand, we are really not trying to get anything they aren't entitled to but not sure if there is a difference between their living arrangements in our annexe and renting rooms from people they don't know with a proper tenancy agreement?

All help gratefully received!

tomtontom

Is the annex registered as a separate property for council tax purposes, do you declare their rent as income?

Mojisola

tomtontom wrote: »

Is the annex registered as a separate property for council tax purposes, do you declare their rent as income?

Without a kitchen, I don't think it could be counted as a separate property.

Murphy2011

Many thanks for the quick replies,

TTT, no the annexe isn't separate for CT buT we do register the income and get the rent a room tax allowance

BB, hopefully that's really good news, we weren't sure if they would get anything due to our income levels. As I said, we certainly don't want to get anything they aren't entitled to but every little helps as a well know supermarket says!

Thanks both for your help and I shall look forward to being a first time granny soon, albeit an unplanned one!

dippy3103

I am pretty sure for HB it will fall foul of close relative rules & HB would not be payable.

System

Are you sure that the annex falls within the rent-a-room scheme?

seven-day-weekend

Murphy2011 wrote: »

Many thanks for the quick replies,

TTT, no the annexe isn't separate for CT buT we do register the income and get the rent a room tax allowance

BB, hopefully that's really good news, we weren't sure if they would get anything due to our income levels. As I said, we certainly don't want to get anything they aren't entitled to but every little helps as a well know supermarket says!

Thanks both for your help and I shall look forward to being a first time granny soon, albeit an unplanned one!

This applies to lodgers. So they are classed as lodgers rather than tenants. This doesn't preclude them from getting help with their rent, but the fact that they are family almost certainly does.

I don't know much about tax credits, so can't help you there.

pmlindyloo

I do not believe that you should be using the Rent a Room scheme. This is for lodgers and family members cannot be lodgers.

I think your stepson and his partner are non dependants and they are not paying you rent as such but are making a contribution to the household. This would not have to be declared for tax purposes.

Who advised you to declare under the Rent a Room scheme?

As regards benefits they would not be entitled to Housing Benefit as they are living with close relatives. They will receive Child Benefit and probably tax credits.

Murphy2011

Hi PMLindyloo

They have only just moved back in so this is all new to us, a friend suggested the rent a room so I will look into this in more depth obviously!

We aren't worried about housing benefit, just wondered what they would be entitled to re children's and working tax credits.

PasturesNew

As you're sharing a kitchen it's not technically an annexe, but is part of your single home. It would, therefore, be treated exactly the same as living in the same house as you.