Will someone lose benefit if they live with us?

annandale

Firstly, in case anyone else is reading this, my original question has been answered and if you've better things to be doing with your time like helping other people, thanks for the help you've already given and please ignore my ramblings.

OK, the problem I have is that people were using the word fraud and seemed to be implying that I would be guilty of some sort of crime if I chose to give my own money away. This surprised me and I can't see how the DWP could regard what I was proposing as criminal regardless of how much they did not like it. Hence my followup question.

Here's the scenario:

1) I agree that someone can come and live as a lodger in my home for £X a week and they take that agreement to the DWP and ask them to pay benefit to cover that rent.

2) Person moves in and when the rent becomes due pays me £X. I provide a receipt to say the rent has been paid and sign any rent book or other required proof. I arrange the rent to be paid into my account and at the end of the tax year will declare it as taxable income.

* At this point the rent paid, subject to tax, is mine to do with how I please.

3) At some point afterwards, I decide, voluntarily, with no compunction, for no personal gain, out of the goodness of my heart, to give my lodger £X, which just happens to be the rent figure.

4) (Optional?) Person tells DPW they have been given a gift of £X (gift because it is unearned income and the person giving the money is under no compulsion to do so).

So how is this fraud?

I can see that people would make moral judgements, but I can't see that it is actually criminal.

Im sure you do think my time would be better served helping other people because I don't agree with what you are proposing.

1. You firstly said that your lodger would be claiming rent allowance even though they didn't need to because that would put an extra 50 pounds in their back pocket, ie, claim rent allowance and not tell the DWP that they aren't paying rent. That is fraud.

2 When it became clear that he couldn't do this you then decided that he could claim rent element and pay you rent and then you would give it back to him

3. You aren't charging him any rent, or you said you wouldn't be if he wasn't going to be claiming any housing element, but now that its been advised that you should charge him rent you've decided that you'll take the rent off him, not charge him for any bills or utilities and then gift him back his housing element at the end of the year.

4. If you do pay 2400 into his account in one lump sum, this would be more likely to trigger a compliance interview if they did a spot check than if you paid several small amounts over the course of the year

5. It may be your own money, but this money has come from the DWP, they may very well ask your lodger during any interview, if they declare that someone has just paid 2400 into their bank account why they are paying rent to a landlord who has then decided to give them that exact sum back.

6 Optional yes, but if the person doesn't tell the DWP and they then do a spot check they are going to wonder why someone on universal credit, who has no outgoings apart from the rent that they are paying you, needs the exact same sum paying back to them.

BorisThomson

It's known as a contrived tenancy Laprivan, creating a false situation with the intention of gaining benefits you wouldn't otherwise be entitled to.

A fraud investigation would definitely not be good for your friend's mental health.

Stick to your original plan. There's no legitimate reason to make this any more complicated than it needs to be.

Laprivan

Thanks for replying.

Well, actually my first proposal, which is what we're now going ahead with, was not to charge any rent. It was only when it was suggested that that might cause problems that I suggested that I could charge a nominal rent but just ignore it. At that time I hadn't realised that would raise any problems.

It was only when people started using words like fraud and crime that I asked myself if there is anything in that proposal that is actually criminal, hence the scenario I laid out above. I wasn't suggesting paying back a years rent as a single amount, but even if I did, as long as it doesn't hit a savings limit, what am I technically doing wrong here?

Yes, the money has come from the DWP and is paid as rent. A rent receipt is issued. Accommodation is provided in exchange for that sum and tax will be paid on it. That is how rent works. If I then choose to give that money back to the person paying me the rent, what possible concern is it to the DWP? And how could that possibly, under the letter of the law, be called fraud or criminal?

Laprivan

BorisThomson wrote: »

It's known as a contrived tenancy Laprivan, creating a false situation with the intention of gaining benefits you wouldn't otherwise be entitled to.

A fraud investigation would definitely not be good for your friend's mental health.

Stick to your original plan. There's no legitimate reason to make this any more complicated than it needs to be.

Thanks! I've looked up "contrived tenancy" and can now see how that could be a problem. It honestly hadn't occurred to me how that could be abused and I thought people were just being judgemental about where benefits were going. I guess I'm more naive than I thought

As I said above I only suggested charging rent because people mentioned that not doing so could cause a problem, which doesn't appear to be the case. We're going ahead with the original plan and I now know that my friend will continue to get some sort of income in his name which was the original thing I was concerned about.

As a side note I've been reading up on the benefits system and I was horrified by some of the things that are being done. Eyes opened, at least a little bit.

Catnip_63

But what a kind gesture to offer to help a friend in a difficult situation, particularly one with mental health issues. Good luck to you all

annandale

As opposed to someone who doesn't suffer from depression?

pmlindyloo

I agree that this is a very kind thing for you to do.

Of course I don't know your friend and his complete situation but living on £73.10 a week even though he has been getting help with his rent is extremely difficult.

The fact that he has rent arrears suggests that he has been using his rent money for other things and not paying his rent. Understandable in one sense but also suggests that he may have other debts too.

It is vital that he gets help with his rent arrears and other debts ( if relevant) as he may be building up a poor credit score and possibly having CCJs against him. That would be a poor future for him. It is possible that the whole scenario has made him depressed.

Before moving in with you he needs to go to CAB and get some help with his debts. Otherwise there may be debt collectors knocking on your door!

I imagine that you might consider helping with his debts. Of course this is up to you but doing so may make him feel worse and beholden and also may run the risk of enabling him to carry on living beyond his means.

I think any further discussion should be moved to the discussion or 'family and relationships' forum as this is no longer about benefits.

Forgive me if you think I am interfering!

Housing_Benefit_Officer

Laprivan wrote: »

Firstly, in case anyone else is reading this, my original question has been answered and if you've better things to be doing with your time like helping other people, thanks for the help you've already given and please ignore my ramblings.

OK, the problem I have is that people were using the word fraud and seemed to be implying that I would be guilty of some sort of crime if I chose to give my own money away. This surprised me and I can't see how the DWP could regard what I was proposing as criminal regardless of how much they did not like it. Hence my followup question.

Here's the scenario:

1) I agree that someone can come and live as a lodger in my home for £X a week and they take that agreement to the DWP and ask them to pay benefit to cover that rent.

2) Person moves in and when the rent becomes due pays me £X. I provide a receipt to say the rent has been paid and sign any rent book or other required proof. I arrange the rent to be paid into my account and at the end of the tax year will declare it as taxable income.

* At this point the rent paid, subject to tax, is mine to do with how I please.

3) At some point afterwards, I decide, voluntarily, with no compunction, for no personal gain, out of the goodness of my heart, to give my lodger £X, which just happens to be the rent figure.

4) (Optional?) Person tells DPW they have been given a gift of £X (gift because it is unearned income and the person giving the money is under no compulsion to do so).

So how is this fraud?

I can see that people would make moral judgements, but I can't see that it is actually criminal.

Because this would indicate that your rental arrangement is contrived and non commercial and created to provide income to the benefit claimant. A commercial landlord does not out of the goodness of their heart give back all the rent they have received from their tenant.