Universal Credit quandary

calcotti

Jeremy535897 said:

It sounds to me that they have decided that the value of the let property less the mortgage is small. They should not be taking any note of the actual rent except in computing capital going forward. In any event, the quantum of that capital would have to take account of the expenses (like mortgage interest) properly and necessarily paid out of it. No doubt calcotti will put me right if I am misunderstanding.

That's possible and I agree that if the rent is bering expended then it should not be added to the capital figure carried forward.
(Apologies that my earlier post repeated what you had said - I opened the window, got interrupted, and then posted without seeing you reply!)

Fizzy80

calcotti said:

Fizzy80 said: Thanks that's really useful. Looks like I will have to argue it with them. Although they have already said that 'the decision maker has determined that you have capital less than £6,000 and therefore your capital, including your other property has no impact upon your UC entitlement.'

Does this justify the reason for not using Rental income as other income? 

Arguably yes but the DM appears to have made an incorrect decision in respect of whether or not the property should be counted as capital - unless for some reason it has no value.

Not a mistake, they said ' The value of the property has been deemed as £0.00, as due to the Coronavirus emergency it cannot be marketed and any value attributed by the decision maker realised.'

Fizzy80

Jeremy535897 said:

It sounds to me that they have decided that the value of the let property less the mortgage is small. They should not be taking any note of the actual rent except in computing capital going forward. In any event, the quantum of that capital would have to take account of the expenses (like mortgage interest) properly and necessarily paid out of it. No doubt calcotti will put me right if I am misunderstanding. I don't understand your last sentence. Rental income is not other income. Deemed income from the capital value of property is income for UC, hence why you can't get any UC if you have capital over £16,000.

In the payment section, they outlined what I should receive minus any 'other income' - in that bracket is the exact amount of rental income I receive, £1150 which leaves me with £0. So although they haven't stated it as such, they must be counting the rental income under 'other income'. This doesn't make sense to me either, so I'm wondering if its a mistake on their part...

calcotti

Fizzy80 said: Not a mistake, they said ' The value of the property has been deemed as £0.00, as due to the Coronavirus emergency it cannot be marketed and any value attributed by the decision maker realised.'

That’s very interesting. I have seen a discussion elsewhere about whether that argument might be accepted to their he claims urgent time. Thanks for explaining. Will be interesting to see how long the DWP are willing to adopt that approach for.

Fizzy80

calcotti said:

Fizzy80 said: Not a mistake, they said ' The value of the property has been deemed as £0.00, as due to the Coronavirus emergency it cannot be marketed and any value attributed by the decision maker realised.'

That’s very interesting. I have seen a discussion elsewhere about whether that argument might be accepted to their he claims urgent time. Thanks for explaining. Will be interesting to see how long the DWP are willing to adopt that approach for.

Yes. I had assumed this meant the rent wouldn't affect UC too, but I guess it doesn't explicitly say that. Although based on what you say, it would be worth challenging rent being classified as 'other income' 

Fizzy80

Jeremy535897 said:

It sounds to me that they have decided that the value of the let property less the mortgage is small. They should not be taking any note of the actual rent except in computing capital going forward. In any event, the quantum of that capital would have to take account of the expenses (like mortgage interest) properly and necessarily paid out of it. No doubt calcotti will put me right if I am misunderstanding. I don't understand your last sentence. Rental income is not other income. Deemed income from the capital value of property is income for UC, hence why you can't get any UC if you have capital over £16,000.

So...they took all of the info about the rental and ultimately the calculation after mortgage and expenses they would have seen that there was not much left after. why would they gather all that info if they were just going to offset the full rental income off my benefit total... Does it sound like a mistake/error? Just wondering how and on what grounds to fight the decision..

calcotti

Fizzy80 said: Although based on what you say, it would be worth challenging rent being classified as 'other income' 

Quote the reference Jeremy used to them

huckster

Rent received is definitely not income.  It is treated as capital.   So each month they add a worked out value for capital on top of any capital value that you already had available.   
http://www.legislation.gov.uk/uksi/2013/376/part/6/chapter/3/made
Under 72 (3)
3) Where a person’s capital is treated as yielding income, any actual income derived from that capital, for example rental, interest or dividends, is to be treated as part of the person’s capital from the day it is due to be paid to the person.
So they would have to work out what  actual income you derived from owing a rental property.

Fizzy80

huckster said:

Rent received is definitely not income.  It is treated as capital.   So each month they add a worked out value for capital on top of any capital value that you already had available.   

Under 72 (3)
3) Where a person’s capital is treated as yielding income, any actual income derived from that capital, for example rental, interest or dividends, is to be treated as part of the person’s capital from the day it is due to be paid to the person.
So they would have to work out what  actual income you derived from owing a rental property.

Thanks for this, that is great

lloyd7

Fizzy80 I have exactly the same scenario as you, I am a hairdresser and my husband a taxi driver, zero income due to the lockdown. Own a buy to let and when I applied for UC got a big fat zero! I rang and said someone made a mistake as I don’t actually get the rental income, I get the surplus after mortgage, service charges and I still have to pay tax on the surplus money. Told it wasn’t a mistake but I can appeal if I want to. Have done an appeal but decision takes 4 weeks! Will you be able to get the 80% in June for self employed?