Housing benefit and house-sharing

mudskippa

I started a house-share several years ago when I was fit and healthy and working. Unfortunately, I am now chronically ill and have had to claim ESA, PIP and Housing Benefit.

I am 38 and my LHA allowance is for a 1-bed (£268 per week), but I have never claimed the full amount because I share with 3 others. The council just paid me my portion of the rent by seeing what my total rent was, putting what my sub-tenants paid as income, and just paying me enough to cover my rent. My rent was slightly less than everyone else's as I ran the whole thing, sorted out all the bills, bought communal goods and paid for minor repairs etc.

My landlord has just given me notice and I really need to stay in the same area as my mobility is poor and it is very accessible for my medical needs. (Eg. there are bus stops at either end of my rd (3 minutes walk) which take me directly to my specialists, my hospital, and my Dr is only a 4 min walk away.)

I want to house-share again to save money on bills, but the rents around here have gone up a lot. Two of my current subtenants would be happy to move with me if I can find something suitable in the area, but I don't want to suddenly have to put their rent up by £150.

Would I be allowed to claim my full 1-bed allowance in a new 3-bed houseshare, so I would be paying the majority of the rent, so they would only pay slightly more and we could actually afford somewhere in this area? It would mean my share of the rent would be almost double theirs. Or would that be really dodgy?

Sorry for really long post. I just need to stay in this area so badly, but I don't think I'd be able to without doing this. Thanks.

huckster

What ESA and PIP elements do you receive ?

It might depend on how severe your condition is, as to what help you receive. There are people with severe conditions, where they need a spare room to store equipment or have a carer stay overnight to assist them.

Have you spoken to Council housing about options, based on your exact situation ?

35 or over, you are entitled to 1 bedroom rate. If you can evidence need for a second bedroom (as above), you would not have a reduction for having a spare bedroom.

mudskippa

Hi thanks for your reply - I'm in the support group for ESA and get the highest rate. I am in the standard PIP group.

But it wouldn't be spare rooms. My aim is to rent a whole house/flat as sole tenant and rent out the other rooms like I do now (with landlord permission) to save money on bills.

I was just wondering if it would be allowed for me to claim my whole entitlement for a one-bed so I can afford something in this area without having to jack up my subtenants' rent ridiculously. I haven't spoken to the council about it yet - they have made so many mistakes with advice in the past, I was just wondering if anyone had gone through something similar or knew the rules.

I do have some justifications - it is helpful for me to have housemates, as one of them always puts the bins out for me, which I can't really do now. I would have the biggest bedroom as I need storage (I have a whole pharmacy worth of vitamins and supplements) etc, so I should be paying more rent anyway.

I'm just wondering if the council would frown on (or disallow me) from taking my whole (or most of) my 1-bed entitlement to pay rent on a place to keep my housemates' rent much lower than mine and still be able to afford something decent around here.

They do allow you to live in a houseshare and claim what your portion of rent is (that's what I'm doing now), but it's actually a bit lower than my current housemates' as I do all the admin etc.

pmlindyloo

This is rather a complicated situation so I suggest that you get a benefit check up from CAB.

I am presuming that you are on contribution based ESA as you do not mention having any reductions due to your income from your subtenants?

As regards housing benefit I am not sure how the council have calculated your HB entitlement.

If you have sub tenants then you should have been allowed the LHA based on a bedroom for yourself and a bedroom for each sub tenant. ( one bed if a couple) In your future scenario you would be entitled to the 3 bed rate of LHA. (presuming you all have your own bedroom)

They would then count the sub tenants rent as income with a £20 disregard for each and deduct from your LHA for the 3 bed. The remainder is what you would have for your HB.

You should be aware that you may wish to think of having 'boarders' rather than sub tenants. A boarder is someone that you provide a meal for (breakfast for example). The income is treated differently for this.

Difficult to work it all out without the figures for your future place, the 3 bed LHA and what you would charge your boarders.

A trip to CAB would be sensible.

I'll find a link to explain sub tenants v boarders.

Have a read of this:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/236962/hbgm-bw2-assessment-of-income.pdf

Scroll down to W2.550 and W2.554

parkrunner

pmlindyloo wrote: »

This is rather a complicated situation so I suggest that you get a benefit check up from CAB.

I am presuming that you are on contribution based ESA as you do not mention having any reductions due to your income from your subtenants?

As regards housing benefit I am not sure how the council have calculated your HB entitlement.

If you have sub tenants then you should have been allowed the LHA based on a bedroom for yourself and a bedroom for each sub tenant. ( one bed if a couple) In your future scenario you would be entitled to the 3 bed rate of LHA. (presuming you all have your own bedroom)

They would then count the sub tenants rent as income with a £20 disregard for each and deduct from your LHA for the 3 bed. The remainder is what you would have for your HB.

You should be aware that you may wish to think of having 'boarders' rather than sub tenants. A boarder is someone that you provide a meal for (breakfast for example). The income is treated differently for this.

Difficult to work it all out without the figures for your future place, the 3 bed LHA and what you would charge your boarders.

A trip to CAB would be sensible.

I'll find a link to explain sub tenants v boarders.

Have a read of this:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/236962/hbgm-bw2-assessment-of-income.pdf

Scroll down to W2.550 and W2.554

Are you sure about that? As I understood the system the council will need to see the tenancy agreement to agree the HB/LHA and only the OP's name will be on it so would only get the one bedroom rate. Could be completely wrong though!

mudskippa

I wonder about if we were joint tenants as well? Ideally I don't want to do that but some landlords require it so they can credit check everyone at the property. I already charge different rates for different rooms in this house based on size. I guess I would be able to have the biggest bedroom and charge my housemates a little less than I would pay for my rent, as long as it's within the 1-bed allowance.

Afraid_of_Kittens

So are the DWP aware of your rental income?

WillowCat

I'm not familiar with the rules of housing benefit, but if you were claiming universal credit the rules would be:

You can claim rent up to your LHA 1 bedroom rate (if you are the only tenant on the tenancy and your rent is higher than this rate)

You can rent out the other rooms to other people and this money would help you to make up the difference between the rent you get from UC and the rent to pay your landlord. You are allowed to make a profit from this and this won't affect your UC as it is not a type of unearned income that is taken into account.

For example if your LHA is £500 and a three bed flat is £1000 you could charge two sub tenants £350 each and so you get £350+ £350 +£500 = £1200 and pay your landlord £1000 so you make £200 profit.

Obviously your landlord would have to be OK with you subletting.

mudskippa

Afraid_of_Kittens wrote: »

So are the DWP aware of your rental income?

Yes of course. I showed Housing Benefit my contract where I was sole tenant and then my bank statements showing the rental payments coming into my account from the other tenants then being paid out in one lump sum to the landlord. So they just deducted what I was being paid by the others and gave me what was left (less than the 1 bedroom rate as my portion of rent was lower).

It's not MY income - I don't get to keep it. It goes paid into my account then staright into the landlord's, which my bank statements show. I set it up like that because in an old houseshare one of the tenants kept paying late and because I was the "sole tenant" I was responsible for rent being paid on time.

So my old landlord actually suggested that I collect all the rent myseland pay it to him in a lump sum because he knew I was reliable.

mudskippa

WillowCat wrote: »

I'm not familiar with the rules of housing benefit, but if you were claiming universal credit the rules would be:

You can claim rent up to your LHA 1 bedroom rate (if you are the only tenant on the tenancy and your rent is higher than this rate)

You can rent out the other rooms to other people and this money would help you to make up the difference between the rent you get from UC and the rent to pay your landlord. You are allowed to make a profit from this and this won't affect your UC as it is not a type of unearned income that is taken into account.

For example if your LHA is £500 and a three bed flat is £1000 you could charge two sub tenants £350 each and so you get £350+ £350 +£500 = £1200 and pay your landlord £1000 so you make £200 profit.

Obviously your landlord would have to be OK with you subletting.

Thanks, I wasn't aware of that. I think my council is starting UC for all new Housing Benefit claims now. So it may well be a UC payment - I admit I have no idea how UC works!

Afraid_of_Kittens

mudskippa wrote: »

Yes of course. I showed Housing Benefit my contract where I was sole tenant and then my bank statements showing the rental payments coming into my account from the other tenants then being paid out in one lump sum to the landlord. So they just deducted what I was being paid by the others and gave me what was left (less than the 1 bedroom rate as my portion of rent was lower).

It's not MY income - I don't get to keep it. It goes paid into my account then staright into the landlord's, which my bank statements show. I set it up like that because in an old houseshare one of the tenants kept paying late and because I was the "sole tenant" I was responsible for rent being paid on time.

So my old landlord actually suggested that I collect all the rent myseland pay it to him in a lump sum because he knew I was reliable.

My question was have you told DWP about your income from rent.

It is your income. They are your sub tenants. You collect rental income. Irrespective of it going straight out to pay rent - it is income.

Housing Benefit do not deduct this rental income from your Housing Benefit income.

As you are on ESA it is the DWP that make the adjustments to your ESA taking into account your rental income.