Current claim for UC - Now moved into house owned by in-laws
Jobber_Jones
Posts: 15 Forumite
My in-laws bought a 3 bed house, refurbished it, and have offered it to my husband and I to live in with our 2 year old son. We obviously want to leap at the chance.
They own the house outright and they want to charge us fairly but on the lower side of rent in the area - £860 a month (previously we were paying £880 for a tiny 2 bed) and have said they will have a proper tenancy agreement drawn up.
However, we currently claim Universal credit - my husband works 32h, I work 16h and we pay for 2 days childcare for our son. We are on fairly low incomes and UC is a big chunk of our monthly money for us.
Is it still going to be possible for us to claim UC and rent from them?
They own the house outright and they want to charge us fairly but on the lower side of rent in the area - £860 a month (previously we were paying £880 for a tiny 2 bed) and have said they will have a proper tenancy agreement drawn up.
However, we currently claim Universal credit - my husband works 32h, I work 16h and we pay for 2 days childcare for our son. We are on fairly low incomes and UC is a big chunk of our monthly money for us.
Is it still going to be possible for us to claim UC and rent from them?
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Comments
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You'll have to look up the local housing allowance for your situation, though if it is just you two and your son and no extenuating circumstances such as disability, you'd only be entitled to the rate for 2 bedrooms not 3, and that rate is what UC will pay. You would have to make up any shortfall for the rent.
http://lha-direct.voa.gov.uk/bedroomcalculator.aspx
Edit: though if UC were paying all of your higher rent in your current house then presumably you wouldn't have to worry!0 -
You can definitely still claim UC, the question is whether or not you get help with the rent.
If your in-laws also live in the house then any rent you pay them is excluded from UC. However I infer that this is not the case.
However a DWP decision maker will have to look at the tenancy agreement and decide whether or not it is a 'contrived tenancy'. However as a contrived tenancy is one made to increase the amount of UC payable logic says that as you will be paying less than before it shouldn't be seen as such. See https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/798300/admf2.pdf paragraphs F2140 to F2146.
I think you should be fine but you need to be aware that DWP may ask more questions about the tenancy than usual.Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.0 -
Thanks very much for your responses.
The rental market value of the house is £1000-£1200pcm, however my in-laws were only going to charge us £860. Do you think they'd be better off charging us market value ?
Edit: meant to add the LHA for our area is £696 for a 2 bed, £832 for a 3 bed. I guess we're only entitled to the 2 bed amount tho?0 -
Jobber_Jones wrote: »Thanks very much for your responses.
The rental market value of the house is £1000-£1200pcm, however my in-laws were only going to charge us £860. Do you think they'd be better off charging us market value ?
No.......
Your UC housing element will in any case be capped at the two bedroom Local Housing Allowance for the postcode https://lha-direct.voa.gov.ukInformation I post is for England unless otherwise stated. Some rules may be different in other parts of UK.0 -
Jobber_Jones wrote: »Thanks very much for your responses.
The rental market value of the house is £1000-£1200pcm, however my in-laws were only going to charge us £860. Do you think they'd be better off charging us market value ?
Edit: meant to add the LHA for our area is £696 for a 2 bed, £832 for a 3 bed. I guess we're only entitled to the 2 bed amount tho?
Also if you put a highr rent and they agree to pay you the housing element, they mask for evidence of payments after 6 or 12 months to verify the tenancy is commercial and if you have paid the lower amount, this could cause you issues.
Your best bet is to put the truth and see what the DM decides.0 -
Did they buy it with a view to renting to you ?0
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Shelter provide a comprehensive guide to the sorts of questions that may be asked.
https://england.shelter.org.uk/legal/benefits/housing_benefit/eligibility_for_housing_benefit/treated_as_not_liable_for_rent#1
You'll note the commentThere are no rigid rules in determining what is a commercial arrangement. Local authorities should not assume there is no commercial arrangement just because the agreement is between close friends or relatives, the rent is low or because the landlord does not let to tenants for purely financial reasons.Edit: meant to add the LHA for our area is £696 for a 2 bed, £832 for a 3 bed. I guess we're only entitled to the 2 bed amount tho?
From your description, a 2 bed LHA rate for a 3 bed property, it appears to be a commercial arrangement as you will be paid less than the rent. If that rent is less than the average for the area, that is simply a commercial choice by the property owner.
Calcotti summed it up.Unlike some here, I am not omniscient. If I am wrong correct me. I won't take offence.
The law is like an ocean - have a swim but don't drown.0 -
Presumably the two bed LHA rate is what you are already getting in your UC so the amount you get should not change (assuming the properties are in the same LHA area)..Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.0
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