LHA, council tax & disability

Prudent

I am looking for some help regarding entitlement to council tax. My adult dd has a significant mental illness. She currently rents a flat. She gets ESA (support group) plus highest rate care for PIP. She is also applying for the severe disability premium.

I work full time and live with my retired partner. The house we live in just now is solely owned by me. OH has sold his house and we are looking to buy somewhere together.

DD's landlord wants to sell. I am willing for her to live in my current house if I buy a house with OH. I understand I cannot charge her rent as it would be a contrived tenancy. She has enough money in her budget to pay the bills including things like the boiler service and other bits of maintenance. She could not afford the council tax. Can she still claim help with the council tax if she does not claim LHA? Her ESA is means tested.

Whilst I do not want to make money from dd, I would not have enough money to pay bills on two houses. I also need to drop to part time soon as I am struggling to work full time due to ill health.

pmlindyloo

I would imagine, as she is on income based ESA, she would get the same support as she is now.

She would be liable for the CT in your house.

The only query may be that she is not paying rent in that house for fear of a contrived tenancy.

In England when you are receiving income based benefits your HB and CT is assessed together.

I do not know the Scottish schemes. (Each council has its own scheme)

Your best option is to telephone the council and ask.

Prudent

pmlindyloo wrote: »

.The only query may be that she is not paying rent in that house for fear of a contrived tenancy.

Many thanks for the reply Do you know why this might be an issue for the C.T.? Overall the council would save. Although C.T. is higher than her existing property, they would not pay LHA. I think it would save the council around £300 a month, or possibly more if she rented somewhere more expensive. The current rent is under the full LHA entitlement.

BigAunty

So are you offering to house her in a property that's completely different from where you live? It's not quite clear.

It is very possible for a tenant to claim HB if they live in a different dwelling from their landlord to whom they are closely related so long as it isn't deemed to be a 'contrived tenancy'. It is expected to be a proper, commercial tenancy, such as having a tenancy contract in place.

To be clear, a contrived tenancy is specifically about deliberately exploiting the HB system, such as not charging rent when the tenant is in employment but charging it when they are on benefits, for example.

So if you are offering a proper tenancy in a property where you don't live to your daughter, she can claim HB so long as the tenancy meets a few conditions. It will not automatically be rejected on the grounds of being contrived like you assume.

There is a poster on this forum called 'Housing Benefit Officer' who works in this field who could outline how you can establish the tenancy on formal grounds to maximise the likelihood of your daughter receiving HB to pay the rent there. One of the conditions, I believe, is that a council will expect a landlord to say they will evict their relative if they get into arrears (because in a proper tenancy, that's what a professional landlord would do), for example, but do verify this.

pmlindyloo

This might be useful for you:

http://www.housingoptionsscotland.org.uk/our-resources/leaflets/

Again, you could telephone and ask.

Poppie68

OP...Are you planning on charging her rent, is the property now mortgage free?
If this is going to become a rental property there are several requirements you need to abide too as a LL as well as the tax implications., it would be worth you asking questions on the housing, renting and buying forum.

Prudent

Thank you everyone I haven't been able to make any phone calls today, but can do on Monday. However after viewing a property with my partner and lots of discussion around everything, we have decided to stay in my house long term. We are now thinking of buying a smaller property for DD. There would not be a mortgage on the property. BigAunty that was really helpful information about the contrived tenancy. I had automatically dismissed charging her rent as I assumed it wasn't possible. The reasons I am looking at providing a property for her are 1) to give her long term stability as stress makes her mental illness worse 2) to provide somewhere that she could have pets as this is also good for her well being. Her current landlord has been great about her having a couple of small pets, but many don't accept them. It was also a struggle to find a landlord who would accept LHA. I would be happy to set up a proper tenancy and do all the necessary safety, rent deposit, registration requirements, tax returns etc.

fluffymovie

Your daughter can claim Council Tax Support to help with her Ctax bill but each council set's their own schemes so you would need to check the individual council concerned.

Depending on the nature and severity of your DD illness, she may qualify for a Severely Mentally Impaired Exemption on her Ctax - again, check with your local council.

Re contrived tenancy - it's not so much setting up a tenancy to show it's all above board as much as you would need to demonstrate that you were acting as a commercial landlord. Ie, if your daughter couldn't pay the rent would you start eviction proceedings, would you let to another tenant if she didn't take it etc.

Prudent

Thank you. I haven't heard of Severely Mentally Impaired Exemption. I think at the moment she gets her council tax paid as she is on means tested benefits. Thankfully we still live in an area where the full council tax is covered. She just has to pay water charges which she manages fine out of her other benefits.

If dd didn't take the property after purchase we would need to let to someone else. Likewise if she didn't keep up payments. I would expect her to cover costs as I need to drop my work due to my own health issues.