Privately renting whilst owning a property and on benefits

phojay

Hi there...I'm looking for some advice...

I currently own my house that I live in and claim income support as I have a child with a disability and also have medical problems myself and cannot work.

I'm due to have a big operation soon and currently live alone with my children, I'm really going to need lots of help after the operation so need to be closer to my parents so they can help out.

What I want to know is can I rent my house out and then rent something near my parents without losing a huge chunk of my benefits? The rent from my owned house would pay for the rent in the new house so I can have the help I need, but would this be classed as an income and therefore I lose my Income Support etc? I wouldn't gain anything in money as the rent I would get would pay the rent going forward, but from looking online for information, it seems that doesn't matter and it would be classed as money in my pocket?

Any help or advice gratefully received!

Socajam

It's too early in the evening for me to response, so I will wait for answers with bated breath.

[Deleted User]

It would be money you have coming in, so yes it will count as income.

If you are going to be incapacitated by the operation, how would you deal with any issues with tenants/rent payments? If you have a tenant who doesn't pay the rent, would you be able to pay your rent and the mortgage? How would you pay for repairs? Are you familiar with the legal requirements of being a LL (see https://forums.moneysavingexpert.com/discussion/5180214/tenancies-in-eng-wales-guides-for-landlords-and-tenants)

pmlindyloo

Would moving nearer to your parents mean that you would be moving to a different local authority?

phojay

pmlindyloo wrote: »

Would moving nearer to your parents mean that you would be moving to a different local authority?

Yes it would....

phojay

deannatrois wrote: »

It would be money you have coming in, so yes it will count as income.

If you are going to be incapacitated by the operation, how would you deal with any issues with tenants/rent payments? If you have a tenant who doesn't pay the rent, would you be able to pay your rent and the mortgage? How would you pay for repairs? Are you familiar with the legal requirements of being a LL (see https://forums.moneysavingexpert.com/discussion/5180214/tenancies-in-eng-wales-guides-for-landlords-and-tenants)

Thankyou for your reply.....if I was to rent my house out, it would have been through an agent who looks after the property. I wouldn't be able to afford paying rent and paying my mortgage without help from parents and that's not something I would relish!

pmlindyloo

phojay wrote: »

Yes it would....

In that case I believe that you would have to make a claim for Universal Credit.

I have found this information from Advice for Decision Makers

Premises not occupied as the home for a time
H2038 Premises usually occupied as the home are disregarded if
1. they are not occupied for a time and
2. the intention is to return to live in the premises as the home.
For example, if a person goes into residential care on a temporary basis and intends to return to the house which the person usually occupies as the home, the house is disregarded

I am not sure of the details about this so it might be worth a visit to Citizens Advice to ask if your current property would be disregarded as capital in your circumstances.

It may depend on how long you would be away (am presuming at least 6 months as you intend to rent it out).

Also something in the back of my mind tells me that the rent from your current property is classed as capital, rather than income.

Hopefully someone could find the appropriate link.

Claiming Universal Credit would probably be a good thing as it is all means tested benefits rolled into one.

So, even if the rent is counted as income this would be deducted from the total UC payment (which would include housing costs - i.e your rent for your new house) so you would still be eligible for some UC.

You cannot claim UC if you have capital over £16000 so it is important to clarify whether the value of your current home is counted as capital or not if you moved.

All a bit complicated so am wondering if there is not a better solution - could your parents come to you?

TELLIT01

If you were to move in with your parents on a temporary basis whilst recovering, your current home would continue to be classed as your main residence in the short term at least.
If you did as you are proposing you would not be able to claim any form of housing benefit for the property you rent because you have your own property.

It is a complex area and it would be advisible to seek advice before taking any action.

phojay

pmlindyloo wrote: »

In that case I believe that you would have to make a claim for Universal Credit.

I have found this information from Advice for Decision Makers

Premises not occupied as the home for a time
H2038 Premises usually occupied as the home are disregarded if
1. they are not occupied for a time and
2. the intention is to return to live in the premises as the home.
For example, if a person goes into residential care on a temporary basis and intends to return to the house which the person usually occupies as the home, the house is disregarded

I am not sure of the details about this so it might be worth a visit to Citizens Advice to ask if your current property would be disregarded as capital in your circumstances.

It may depend on how long you would be away (am presuming at least 6 months as you intend to rent it out).

Also something in the back of my mind tells me that the rent from your current property is classed as capital, rather than income.

Hopefully someone could find the appropriate link.

Claiming Universal Credit would probably be a good thing as it is all means tested benefits rolled into one.

So, even if the rent is counted as income this would be deducted from the total UC payment (which would include housing costs - i.e your rent for your new house) so you would still be eligible for some UC.

You cannot claim UC if you have capital over £16000 so it is important to clarify whether the value of your current home is counted as capital or not if you moved.

All a bit complicated so am wondering if there is not a better solution - could your parents come to you?

Yes, very complicated! Unfortunately my parents are not able to come to me as they're quite elderly but able to help me with basic things and meals etc.

Looks as though what seemed like a simple temporary house swap is a lot more complicated than first thought!

phojay

TELLIT01 wrote: »

If you were to move in with your parents on a temporary basis whilst recovering, your current home would continue to be classed as your main residence in the short term at least.
If you did as you are proposing you would not be able to claim any form of housing benefit for the property you rent because you have your own property.

It is a complex area and it would be advisible to seek advice before taking any action.

Thankyou for your reply....I wouldn't be able to move in with my parents as they don't have the room for us all.....and I wouldn't claim housing benefit as the rent would have been paid from renting out my house.

I think it's a non starter!

Caz3121

phojay wrote: »

I wouldn't claim housing benefit as the rent would have been paid from renting out my house.

I think it's a non starter!

I think you are right

once you pay the agents fees, mandatory landlord liabilities (gas etc), insurances and the taxman, do the numbers really stack up even without tenant voids?
do you have space for your parents to come stay with you for a period?