How does taking in a lodger affect benefits?

Pompeyfan

I've tried ringing DWP and got nowhere (either number not recognised, person can't help or no one rings back), so thought I'd ask here.

Currently I receive ESA (support group) and low rate of DLA s(I'm agoraphobic and house bound amongst other things), but no other benefits as I live with my father. My father is seriously ill and the prognosis is not good and he may only have a few weeks. When the worst comes to the worst, the house will be left to me (4 bed detached, no mortgage) and I'll have to claim Council Tax Benefit (I'm single with no family apart from dad).

When dad is gone, then obviously so will his pension and the household bills he was covering I'll have to take over, so to help with paying the bills I thought about taking in a lodger.

I have a friend who has to vacate their flat very soon, who is on ESA (WRAG) and has their rent and council tax paid as well. The local Council allow £68.50 per week to be charged for a room (ie what they'll pay) and the plan was I was just going to take the £68.50 and put that towards the household bills as their share as they're also going to help me out around the house and do things for me I can't like cleaning and the shopping, but was worried how this will affect my benefits as they're means tested and this will be an extra income even though its to pay bills, so if they take the £68.50 a week off my benefits then taking in a lodger would be a bit self defeating, especially as having a 2nd person living here will increase the bills a bit (extra gas, electric, water use etc).

Any advice or numbers I can call please?

Cheers

rogerblack

In the very short term - is he claiming PIP/DLA, which would enable you to claim carers premium.
You can of course directly call the DWP.
My understanding is that for a lodger, only 20 pounds a week is disregarded.
For a boarder - someone you provide services - for example meals - it's 20 pounds, plus half that is disregarded.
I am unsure what the position is with regards to their HB if they are a boarder - I don't know if they will only get the accomodation portion.

I am assuming you do not get HB.
It is very, very important that you do the boarder/lodger thing formally - with actual written contracts, rent book, ... - not paid cash.
Their is also the potential risk that they may be seen as your partner.

Are you claiming DLA/PIP?

Pompeyfan

rogerblack wrote: »

In the very short term - is he claiming PIP/DLA, which would enable you to claim carers premium.
You can of course directly call the DWP.
My understanding is that for a lodger, only 20 pounds a week is disregarded.
For a boarder - someone you provide services - for example meals - it's 20 pounds, plus half that is disregarded.
I am unsure what the position is with regards to their HB if they are a boarder - I don't know if they will only get the accomodation portion.

I am assuming you do not get HB.
It is very, very important that you do the boarder/lodger thing formally - with actual written contracts, rent book, ... - not paid cash.
Their is also the potential risk that they may be seen as your partner.

Are you claiming DLA/PIP?

Cheers for the reply.

I'm claiming DLA and get the lower rate of both components, but am not claiming HB and won't need to as no rent to pay. My friend doesn't get DLA.

The idea was they would have their own room, but share the kitchen, bathroom, living area and basically look after the house, and the rent they'd get from their HB would be their share of the utility bills etc. We certainly wouldn't be partners, it was just a way of helping me pay the bills and they needing a home - we agreed an initial 6 months to see how it goes.

Cheers

rogerblack

Pompeyfan wrote: »

My friend doesn't get DLA.

The idea was they would have their own room, but share the kitchen, bathroom, living area and basically look after the house, and the rent they'd get from their HB would be their share of the utility bills etc. We certainly wouldn't be partners, it was just a way of helping me pay the bills and they needing a home - we agreed an initial 6 months to see how it goes.

Cheers

I was initially referring to your father claiming DLA/PIP - to maximise his income.

http://www.adviceguide.org.uk/wales/housing_w/housing_renting_a_home_e/housing_subletting_and_lodging_e/housing_lodging_e/taking_in_a_lodger_what_you_need_to_think_about_first.htm may be of use.

McKneff

If you have a 4 bed house, what about 2 lodgers or a couple taking 2 rooms for say a bedroom and living room.

pmlindyloo

Pompeyfan wrote: »

Cheers for the reply.

I'm claiming DLA and get the lower rate of both components, but am not claiming HB and won't need to as no rent to pay. My friend doesn't get DLA.

The idea was they would have their own room, but share the kitchen, bathroom, living area and basically look after the house, and the rent they'd get from their HB would be their share of the utility bills etc. We certainly wouldn't be partners, it was just a way of helping me pay the bills and they needing a home - we agreed an initial 6 months to see how it goes.

Cheers

As already said taking in a boarder (ie. like a lodger but providing some cooked meals) there would be a £20 disregard from the 'rent' plus half of the remainder. This amount would be treated as income and deducted from your ESA (I am presuming that you are on income based ESA?)

I suggest that you read this thread https://forums.moneysavingexpert.com/discussion/5122451

and the attached links by G_M ( a well regarded contributor to the forum.)

Do not create a contract of any kind for 6 months - this is far too long if things go wrong.

Of course if your lodger is going to be helping out then you need to factor this in as regards what you charge your lodger, but do remember that you will lose your single person's discount of council tax (are you receiving CT support?) and there will be costs of food etc.

We don't know your financial circumstance and whether you have/will have savings but please remember that if you are on income based ESA this is means tested and any change of circumstances must be reported to the appropriate departments (council for single person's discount)

Also, you may wish to consider selling up and downsizing in the future if this would give you more financial security.

Pompeyfan

rogerblack wrote: »

I was initially referring to your father claiming DLA/PIP - to maximise his income.

http://www.adviceguide.org.uk/wales/housing_w/housing_renting_a_home_e/housing_subletting_and_lodging_e/housing_lodging_e/taking_in_a_lodger_what_you_need_to_think_about_first.htm may be of use.

Yes, Dad gets DLA both at highest rates.

Cheers for the link.

McKneff wrote: »

If you have a 4 bed house, what about 2 lodgers or a couple taking 2 rooms for say a bedroom and living room.

The other rooms aren't really up to taking lodgers as full of stuff at present.

pmlindyloo wrote: »

As already said taking in a boarder (ie. like a lodger but providing some cooked meals) there would be a £20 disregard from the 'rent' plus half of the remainder. This amount would be treated as income and deducted from your ESA (I am presuming that you are on income based ESA?)

I suggest that you read this thread https://forums.moneysavingexpert.com/discussion/5122451

and the attached links by G_M ( a well regarded contributor to the forum.)

Do not create a contract of any kind for 6 months - this is far too long if things go wrong.

Of course if your lodger is going to be helping out then you need to factor this in as regards what you charge your lodger, but do remember that you will lose your single person's discount of council tax (are you receiving CT support?) and there will be costs of food etc.

We don't know your financial circumstance and whether you have/will have savings but please remember that if you are on income based ESA this is means tested and any change of circumstances must be reported to the appropriate departments (council for single person's discount)

Also, you may wish to consider selling up and downsizing in the future if this would give you more financial security.

I don't have savings and yes my ESA is income based. I don't claim for Council Tax at present as Dad pays it, but I will have to after he's gone.

I'm already planning on downsizing, that's part of the reason for my friend moving in, so she can help sort everything out, then I can sell this place and buy a bungalow.

Cheeky_Monkey

Surely, once you inherit the mortgage-free 4 bed house, you could sell it and buy something smaller for cash and still have lots left over so you shouldn't need to keep claiming benefits or take in a lodger