Renting to family affect their benefits?

exploringdora

tlc sort of answered marlie's question there. Sibling rivaly exists which is a major factor in the allowing rent. Also there's a grandchild (apologies, I thought I had mentioned that) and my friend's existing home is perfect for just them but not for two extras.

I totally get the view point on the tax funded money she doesn't need. That's actually what made me start worrying they were opening themselves to fraud in the first place. Honestly I don't believe their intention is to defraud anyone intentionally however their daughter has been known to be less than honest on occasion. I'm going to let them know about the contrived tenancy and advise them again to put a proper rental agreement in place, as well as the possible tax implications and hope they protect themselves.

Thank you all again

ScorpiondeRooftrouser

exploringdora wrote: »

Thanks artful. I did suspect that myself (as well as the morally suspect bit!)

Scorpion - I suspect they already give their daughter money anyway, which is where the possible handing back the housing benefit came up. Though I suppose if they rent the new property legitimately it still means the daughter is out of a home, unless they sort this quickly enough for her to find a new one.

What they already give the daughter is irrelevant.

They can earn money legitimately by renting the flat and give that money to the daughter.
Or they can set up a contrived tenancy, depriving themselves of the chance to earn money, and committing fraud.

Both are financially identical, but one is illegal. In the first they collect £100pw or whatever, and pay out £100pw in tax and to the daughter. In the second they don't get that £100pw but don't pay anything out.

it's a no brainer...if the flat is genuinely rentable, rent it out to someone else.

[Deleted User]

Even if they just give her money, if Housing/DSS check bank accounts (which does happen, particularly if a jealous relative/neighbour reports that something non cosher is going on), their daughter could end up in prison based on undeclared income going into her bank account.

Renting a property to her and giving her the housing benefit received could put the parents and their daughter in prison.., and might not even pass the initial checks for housing benefit to be awarded (because its being rented to a family member).

To be honest, expecting the state to fund their daughter through extra housing benefit is a bit questionable. Can they fund a course or some child care for her to help her find work? Help her with a deposit/be a guarantor? Then no one gets into trouble.

exploringdora

Thanks all. I understand the compulsion to look after their daughter, however she has told them she is entitled to claim this so they don't seen what's wrong. If they pay her bills or other expenditure but don't give her money directly would that still be a problem? I'm not looking for loopholes, I'm seriously worried their attempts to do the 'right thing' is actually leading them to do the wrong thing.

anselld

exploringdora wrote: »

Thanks all. I understand the compulsion to look after their daughter, however she has told them she is entitled to claim this so they don't seen what's wrong. If they pay her bills or other expenditure but don't give her money directly would that still be a problem? I'm not looking for loopholes, I'm seriously worried their attempts to do the 'right thing' is actually leading them to do the wrong thing.

Probably don't really want to "see what's wrong", prefer to believe the daughters sense of entitlement.

Probably time to stop trying to help!

exploringdora

anselld - I'm beginning to suspect that myself!

HappyMJ

exploringdora wrote: »

Thanks all. I understand the compulsion to look after their daughter, however she has told them she is entitled to claim this so they don't seen what's wrong. If they pay her bills or other expenditure but don't give her money directly would that still be a problem? I'm not looking for loopholes, I'm seriously worried their attempts to do the 'right thing' is actually leading them to do the wrong thing.

Paying the bills also counts as income which would reduce her benefits.

What wouldn't count would be if they invited her on a meal out and paid the bill at the end of the meal. They could invite her to the pub and buy a drink for her. None of these are essential living costs.

If I were you I'd avoid talking about it with them. Just nod your head and say nothing. Talking with them could cause you to get into trouble if you give them advice which they act on and then mention in interview that you gave them that advice and thought that it was genuine.

exploringdora

HappyMJ wrote: »

Paying the bills also counts as income which would reduce her benefits.

What wouldn't count would be if they invited her on a meal out and paid the bill at the end of the meal. They could invite her to the pub and buy a drink for her. None of these are essential living costs.

If I were you I'd avoid talking about it with them. Just nod your head and say nothing. Talking with them could cause you to get into trouble if you give them advice which they act on and then mention in interview that you gave them that advice and thought that it was genuine.

I think this is going to have to be my way forward. Thank you all so much.