Would elderly parent get housing benefit if living with us?

californiagirl

Husband and I are considering purchasing a property and turning the existing outbuilding into an annexe for my elderly parents (both over 65). They are currently renting a house for £650 per month, and the plan is that they would move in with us and pay us the £650 to pay towards the mortgage. They are both still fairly active (66 and 76 years old) and I would not be caring for them in the typical sense.

If one of them dies, the other would struggle to find £650 per month. Obviously I would not them to pay if they can't, but it may then make our mortgage unaffordable. Would the remaining spouse be entitled to any kind of benefit if they are living with us (not technically in the property but in a separate annexe)? If they were still in their own home then I am guessing they would get a benefit, but does it change things if they live with family?

Thanks all.

TELLIT01

I don't know for sure, but would imagine they would only be able to claim HB if they had a formal tenancy agreement. Would the mortgage lender allow you to sub-let part of the property? Would you need a buy to let mortgage in order to sub-let?

BorisThomson

It's not going to be a commercial arrangement so I can't see them qualifying for HB. You've said you would not expect them to pay if they couldn't, a landlord would evict.

Would you let the annex out to another tenant if the parents moved out? (Answered in your other thread, you wouldn't let it to someone outside the family.)

Would you be declaring the income to the tax man?

californiagirl

Yes, I'd plan on declaring it as income. I earn very little at present, and would think it would come under the Rent-a-Room scheme which means I wouldn't pay any tax.

Our plan is to either rent it to parents/my brother/make it a holiday let. I know we will have to seek permission for either option from the council. If we did it as a holiday let then we would get the appropriate mortgage.

Alice_Holt

Very very unlikely that your LA would sanction HB in these circumstances.
https://england.shelter.org.uk/housing_advice/housing_benefit/housing_benefit_renting_from_family

tomtom256

So effectively you want to create a false tenancy in order to get you're mortgage paid.

californiagirl

I'm not wanting to create anything false. I'm asking a legitimate question. If one of them was widowed and lived in a rental, they would get assistance. I'm merely wondering if they would get the same benefit if they lived with us and were paying us rent. They have paid tax all their lives so have contributed to the pot, and living us would free up another house for the market, so I think it's a legitimate question and there's nothing scrounging about it.

skcollo

I doubt HB would be paid, so in effect, the property purchase should be abandoned, as you cannot afford it.

BorisThomson

californiagirl wrote: »

Yes, I'd plan on declaring it as income. I earn very little at present, and would think it would come under the Rent-a-Room scheme which means I wouldn't pay any tax.

Our plan is to either rent it to parents/my brother/make it a holiday let. I know we will have to seek permission for either option from the council. If we did it as a holiday let then we would get the appropriate mortgage.

They cannot claim HB if living in your home, which they would need to be for you to benefit from the rent a room scheme.

You cannot claim under the rent a room scheme if they are living in a separate property, which (even before fulfilling the other criteria for a commercial tenancy) they would need to be to qualify for HB.

Your tax avoiding, benefit maximising scheme is not going to work.

tomtom256

californiagirl wrote: »

I'm not wanting to create anything false. I'm asking a legitimate question. If one of them was widowed and lived in a rental, they would get assistance. I'm merely wondering if they would get the same benefit if they lived with us and were paying us rent. They have paid tax all their lives so have contributed to the pot, and living us would free up another house for the market, so I think it's a legitimate question and there's nothing scrounging about it.

But that is exactly what you are trying to do.

It's called a contrived tenancy.

Can my parents claim HB to pay my mortgage or in you're words "and the plan is that they would move in with us and pay us the £650 to pay towards the mortgage."

Plain and simple contrived tenancy set up in order to take advantage of the benefit system.

californiagirl

Wow, there are so many sanctimonious answers here; I don't know where to begin.

In terms of affordability, we can afford the mortgage, but if one of them dies and the other loses that income, the burden will then fall on myself and my husband to provide a roof over their heads, as well as providing care, food etc. That would have a subsequent effect on our own income and a question regarding available benefits is therefore valid. No "contrived tenancy" about it.

If HB is not payable, that's fine, but I can still claim under the Rent-a-Room scheme. How is that tax-avoiding?!

If you read my original post, you'll see that there is nothing in it that implies I am trying to get more than I should. I'm sitting down and doing calculations and trying to conceive of every different outcome that may arise. It's called being sensible.

Glad you all have nothing better to do with your evenings than hang out on forums and write preachy little numbers with your keyboards. You must be loving life! :j