ESA (either New Style or Contribution based) and Airbnb income Scotland

Newcad

Slonvinton said:

Can anyone point me to the legislation where it says rental income is disregarded or ESA dont consider renting one property self employment. Id like to know I can argue my case if I have to.

Tangent
On a related note does anyone know if airbnbing one room can still be done through the rent a room scheme if you are on Universal Credit and be disregarded as income.

I see that you have already found the ADM guidance.
Whilst not the legislation it is what the DWP work to and is supposed to reflect the legislation, (But doesn't always do that which is why there are appeals).

As you have found there, ADM V5425 says that renting a single property to tenants is not a business, so not self employment.

However that depends on the definition of "2. lets the property to tenants".
A tenant would normally have a tenancy agreement.
Are people renting an AirBnB for a short time 'tenants'? I would say that they are (probably) not and so ADM V5425 would (probably) not apply.
There may have already been test cases/appeals about that, if you can track down any relevant to Scottish rentals.

Next; income from renting -  to tenants.

You won't find anything that specifically says such rental income is to be disregarded.
It works the other way round - Rental income is not on the list of what is regarded as "Unearned Income"

For UC and New Style benefits what can be deducted as "Unearned Income" is specified in the ADM H5002 as:

What is unearned income

H5002 [See Memo ADM 20/20 and Memo ADM 26/20] A claimant’s unearned income means any of
their income consisting of

1. retirement pension income
2. benefit income
3. foreign benefits
4. spousal maintenance
5. student income (see ADM Chapter H6 for guidance on student income)
6. employment and training payments paid
  6.1 as a substitute for UC or
  6.2 for a person’s living expenses
7. sports awards
8. certain insurance payments
9. income from an annuity
10. income from a trust
11. income deemed to yield from capital (sometimes also known as “tariff income”)
12. capital treated as income
13. certain income which is taxable.

If a type of income is not listed above, it does not affect the claimant’s award.

Note that last line.
The list does not include rental income, so it is not something which can be deducted from NS benefits or UC as "Unearned Income".
If you want the legislation itself: https://www.legislation.gov.uk/uksi/2013/376/regulation/66

Slonvinton

Newcad said:

Slonvinton said:

Can anyone point me to the legislation where it says rental income is disregarded or ESA dont consider renting one property self employment. Id like to know I can argue my case if I have to.

Tangent
On a related note does anyone know if airbnbing one room can still be done through the rent a room scheme if you are on Universal Credit and be disregarded as income.

I see that you have already found the ADM guidance.
Whilst not the legislation it is what the DWP work to and is supposed to reflect the legislation, (But doesn't always do that which is why there are appeals).

As you have found there, ADM V5425 says that renting a single property to tenants is not a business, so not self employment.

However that depends on the definition of "2. lets the property to tenants".
A tenant would normally have a tenancy agreement.
Are people renting an AirBnB for a short time 'tenants'? I would say that they are (probably) not and so ADM V5425 would (probably) not apply.
There may have already been test cases/appeals about that, if you can track down any relevant to Scottish rentals.

Next; income from renting -  to tenants.

You won't find anything that specifically says such rental income is to be disregarded.
It works the other way round - Rental income is not on the list of what is regarded as "Unearned Income"

For UC and New Style benefits what can be deducted as "Unearned Income" is specified in the ADM H5002 as:

What is unearned income

H5002 [See Memo ADM 20/20 and Memo ADM 26/20] A claimant’s unearned income means any of
their income consisting of

1. retirement pension income
2. benefit income
3. foreign benefits
4. spousal maintenance
5. student income (see ADM Chapter H6 for guidance on student income)
6. employment and training payments paid
  6.1 as a substitute for UC or
  6.2 for a person’s living expenses
7. sports awards
8. certain insurance payments
9. income from an annuity
10. income from a trust
11. income deemed to yield from capital (sometimes also known as “tariff income”)
12. capital treated as income
13. certain income which is taxable.

If a type of income is not listed above, it does not affect the claimant’s award.

Note that last line.
The list does not include rental income, so it is not something which can be deducted from NS benefits or UC as "Unearned Income".
If you want the legislation itself: https://www.legislation.gov.uk/uksi/2013/376/regulation/66

https://assets.publishing.service.gov.uk/media/66867c21899a6f92e5d9ccf5/admh5.pdf

When I read this doc I wasnt sure if it was just about UC

12 and 13 on that list are both pretty vague.

(12) H5100 income from a second property is treated as capital (how important is the second property bit?) but it does say rental income is capital there.

(13) H5110

Newcad

Anything and Everything in the ADM (Advice for Decision Makers) is about UC, 'New Stye' benefits, and PIP.

For legacy IR benefits then the guidance is the DMG (Decision Makers Guidance).
Obviously once the legacy benefits are fully migrated to UC then the DMG will become obsolete.

H5100 is for certain special cases - Normally the value of a second property that you own would itself exclude you from claiming UC.
But there can be fairly rare exceptions to that where the value of the second property itself can be disregarded, but not any other capital that you have - and so the guidance is there.

H5110 is simple enough - If you have a lodger (or two) in your own home where you live then the rent they pay is not counted as income for UC (although it will become capital if you don't spend it by the time you get the next rent) - unless you are running your own home as a self employed business renting rooms in which case the rent is business income.

Slonvinton

Newcad said:

Anything and Everything in the ADM (Advice for Decision Makers) is about UC, 'New Stye' benefits, and PIP.

For legacy IR benefits then the guidance is the DMG (Decision Makers Guidance).
Obviously once the legacy benefits are fully migrated to UC then the DMG will become obsolete.

H5100 is for certain special cases - Normally the value of a second property that you own would itself exclude you from claiming UC.
But there can be fairly rare exceptions to that where the value of the second property itself can be disregarded, but not any other capital that you have - and so the guidance is there.

H5110 is simple enough - If you have a lodger (or two) in your own home where you live then the rent they pay is not counted as income for UC (although it will become capital if you don't spend it by the time you get the next rent) - unless you are running your own home as a self employed business renting rooms in which case the rent is business income.

Im so confused, I thought nothing you owned or earned affected PIP....  I thought capital didnt affect the ESA but did affect UC (Ive been resigned to losing UC this whole time not even questioning that; entire focus has been on the ESA.. Im not even sure if Im right about that now).

What about ADP then, I need the rules for ADP to see if I need to report savings and earnings for that now I guess... I was really relying on not losing that

My confusion about the "second property" aspect is that I will only have one property; I will be renting a room from a friend while doing this, if I do it, so it wont be a second property. What are the implications of moving out of your only home and renting it out.

I think maybe I need to give up on this idea.

Spoonie_Turtle

PIP and ADP aren't affected by income or capital/savings.

Edit: because I think I've realised what the confusion might be, not all chapters in the ADM apply to all the benefits covered by the ADM. 
E.g. payment conditions for PIP aren't going to be relevant to UC, so there are separate chapters to deal with the separate benefits.

poppy12345

Slonvinton said:

Newcad said:

Anything and Everything in the ADM (Advice for Decision Makers) is about UC, 'New Stye' benefits, and PIP.

For legacy IR benefits then the guidance is the DMG (Decision Makers Guidance).
Obviously once the legacy benefits are fully migrated to UC then the DMG will become obsolete.

H5100 is for certain special cases - Normally the value of a second property that you own would itself exclude you from claiming UC.
But there can be fairly rare exceptions to that where the value of the second property itself can be disregarded, but not any other capital that you have - and so the guidance is there.

H5110 is simple enough - If you have a lodger (or two) in your own home where you live then the rent they pay is not counted as income for UC (although it will become capital if you don't spend it by the time you get the next rent) - unless you are running your own home as a self employed business renting rooms in which case the rent is business income.

My confusion about the "second property" aspect is that I will only have one property; I will be renting a room from a friend while doing this, if I do it, so it wont be a second property. What are the implications of moving out of your only home and renting it out.

Even though you will still only have 1 property, if you don't live in it then it's counted as capital for UC purposes, in your case. It's disregarded if you live in it. 

Slonvinton

poppy12345 said:

Slonvinton said:

Newcad said:

Anything and Everything in the ADM (Advice for Decision Makers) is about UC, 'New Stye' benefits, and PIP.

For legacy IR benefits then the guidance is the DMG (Decision Makers Guidance).
Obviously once the legacy benefits are fully migrated to UC then the DMG will become obsolete.

H5100 is for certain special cases - Normally the value of a second property that you own would itself exclude you from claiming UC.
But there can be fairly rare exceptions to that where the value of the second property itself can be disregarded, but not any other capital that you have - and so the guidance is there.

H5110 is simple enough - If you have a lodger (or two) in your own home where you live then the rent they pay is not counted as income for UC (although it will become capital if you don't spend it by the time you get the next rent) - unless you are running your own home as a self employed business renting rooms in which case the rent is business income.

My confusion about the "second property" aspect is that I will only have one property; I will be renting a room from a friend while doing this, if I do it, so it wont be a second property. What are the implications of moving out of your only home and renting it out.

Even though you will still only have 1 property, if you don't live in it then it's counted as capital for UC purposes, in your case. It's disregarded if you live in it. 

Yes but in the airbnb situation I would have moved out- so wont be living in it.

poppy12345

Slonvinton said:

poppy12345 said:

Slonvinton said:

Newcad said:

Anything and Everything in the ADM (Advice for Decision Makers) is about UC, 'New Stye' benefits, and PIP.

For legacy IR benefits then the guidance is the DMG (Decision Makers Guidance).
Obviously once the legacy benefits are fully migrated to UC then the DMG will become obsolete.

H5100 is for certain special cases - Normally the value of a second property that you own would itself exclude you from claiming UC.
But there can be fairly rare exceptions to that where the value of the second property itself can be disregarded, but not any other capital that you have - and so the guidance is there.

H5110 is simple enough - If you have a lodger (or two) in your own home where you live then the rent they pay is not counted as income for UC (although it will become capital if you don't spend it by the time you get the next rent) - unless you are running your own home as a self employed business renting rooms in which case the rent is business income.

My confusion about the "second property" aspect is that I will only have one property; I will be renting a room from a friend while doing this, if I do it, so it wont be a second property. What are the implications of moving out of your only home and renting it out.

Even though you will still only have 1 property, if you don't live in it then it's counted as capital for UC purposes, in your case. It's disregarded if you live in it. 

Yes but in the airbnb situation I would have moved out- so wont be living in it.

Exactly, which means it will be treated as capital for UC purposes. 

Slonvinton

poppy12345 said:

Slonvinton said:

poppy12345 said:

Slonvinton said:

Newcad said:

Anything and Everything in the ADM (Advice for Decision Makers) is about UC, 'New Stye' benefits, and PIP.

For legacy IR benefits then the guidance is the DMG (Decision Makers Guidance).
Obviously once the legacy benefits are fully migrated to UC then the DMG will become obsolete.

H5100 is for certain special cases - Normally the value of a second property that you own would itself exclude you from claiming UC.
But there can be fairly rare exceptions to that where the value of the second property itself can be disregarded, but not any other capital that you have - and so the guidance is there.

H5110 is simple enough - If you have a lodger (or two) in your own home where you live then the rent they pay is not counted as income for UC (although it will become capital if you don't spend it by the time you get the next rent) - unless you are running your own home as a self employed business renting rooms in which case the rent is business income.

My confusion about the "second property" aspect is that I will only have one property; I will be renting a room from a friend while doing this, if I do it, so it wont be a second property. What are the implications of moving out of your only home and renting it out.

Even though you will still only have 1 property, if you don't live in it then it's counted as capital for UC purposes, in your case. It's disregarded if you live in it. 

Yes but in the airbnb situation I would have moved out- so wont be living in it.

Exactly, which means it will be treated as capital for UC purposes. 

Right so I can forget about UC.... its just the ESA which is the thing that we are trying to work out.

Slonvinton

Spoonie_Turtle said:

PIP and ADP aren't affected by income or capital/savings.

Edit: because I think I've realised what the confusion might be, not all chapters in the ADM apply to all the benefits covered by the ADM. 
E.g. payment conditions for PIP aren't going to be relevant to UC, so there are separate chapters to deal with the separate benefits.

That makes sense. Thank you I was starting to grapple with sanity again LOL

Ive gone through https://assets.publishing.service.gov.uk/media/66867c21899a6f92e5d9ccf5/admh5.pdf and ESA isnt mentioned as a reference anywhere.