Claiming Housing Benefit and subletting to a lodger

[David Clapson]

I claim HB, ESA, PIP and CT benefit and want to have a lodger, paying £650 per month inc. bills or £7800 per annum. It's not my flat. The landlord is OK with me getting a lodger.

Even with the lodger's contribution my share of the rent will be well in excess of the maximum rate of HB. So the way I see it, my entitlement to HB will not change. Neither will my ESA or PIP entitlement change. (The CT will because I'll lose my single occupancy discount, but never mind that, I don't need advice on it.)

The landlord wants me to sublet to the lodger so that I will be solely responsible for paying the rent. BUT I think the council would count the lodger's rent as my income. And I suppose the DWP would too. How do I find out the implications? All my Googling only tells me about the 16k savings limit, which is not an issue.

I realise that the logical solution is for the lodger to have a tenancy agreement with the landlord, in which case my rent would go down. But the landlord doesn't want the risk and hassle and paperwork of having 2 tenants rather than 1.

 

[Puddy_Tat]

some stuff from CAB here - this suggests you'd get to keep the first £ 20 a week and the rest would be counted as income. I assume this wouldn't include payment for bills etc, so you'd need to handle them separately rather than on inclusive basis. Are you getting done for 'bedroom tax' now? I'm really not quite sure how this works.

Are you likely to get transferred on to universal clusterfuck credit any time soon? that may change the rules

And are you on contributions or income based ESA? Or the sort of contributions based ESA that will turn in to income based some time soon? If it's income based, it may well affect your ESA.

I think that lodger would be able to claim housing benefit either way - council would need something on paper though. And be prepared for them asking (or maybe even visiting) to establish that lodger is genuinely a lodger and you're not a co-habiting couple. (usually can be dealt with by demonstrably having separate bedrooms - and also working as two separate 'households' for things like food in cupboards / fridge etc.)

And if lodger is on low income, you could claim 'second adult rebate' which is different from CT benefit as it relates to lodger's income not yours.

other angles -

if you sub-let, you would have more control over the situation if you really don't get on with sub-tenant or they piss you about. more about the tenancy law angle (again CAB) here.

If you have home insurance, this would almost certainly not cover you if lodger nicked stuff / left doors unlocked and your place got done over - valid claim usually requires 'valid and forcible entry' (you would probably need to let your insurers know if you do have a lodger)

If you became a landlord, think you would be required to check that lodger isn't an illegal immigrant. i've no idea what's involved here, what proof you have to see / keep.

Your landlord might find it complicated to have 2 separate tenancies - potential for complication over shared areas of the place as the most obvious issue.

Alternative from landlord's point of view would be to offer a joint tenancy. I'd say handle that with care - may include 'joint and several liability' - in other words if the other tenant buggers off, you're liable for their share of any bills. Having said that, if you sub-let then presume you'd still be liable to pay the full rent to your landlord if lodger pissed you about / damaged the place.

 

[David Clapson]

Thank you for such a long and helpful and fast reply! It's so damn complicated...like having to do an A level. But without any lessons, just learning from books. I can't even work out how a lodger would affect my local housing allowance. I need help from a professional.

 

[AnnO'Neemus]

Go to a CAB or law centre or other welfare rights adviser. You say you claim ESA/PIP, try checking if any charities/support organisations associated with your disabilities have any advice workers - for example, I know Mind have advice workers who help people with benefits claims and stuff and would hopefully be able to advise about the consequences of having income from a lodger.

It's a bit shit, though, because the Tories have been blithely saying that people hit by the bedroom tax should either downsize or get a lodger, but then they take the lodger income into account and reduce your benefits, so it's not necessarily the panacea to people's problems that they make out.

Also, it's potentially taxable income, although under the HMRC 'rent a room' scheme you can receive a certain amount of lodger income tax free. You'd need to check what the current threshold is.

 

[BCBlues]

Do you get the Severe Disabiliy Premium in your ESA entitlement on account of your PIP award?

You may stand to lose this if someone over 18 moves in with you.

 

[Pickman's model]

Thank you for such a long and helpful and fast reply! It's so damn complicated...like having to do an A level. But without any lessons, just learning from books. I can't even work out how a lodger would affect my local housing allowance. I need help from a professional.

marty21

 

[Orang Utan]

Do you have to inform the authorities that you are subletting?

 

[David Clapson]

Do you have to inform the authorities that you are subletting?

If the lodger goes on the electoral roll the Council Tax people will know. Then my CT benefit will be adjusted. And the Housing Benefit people will be told.

 

[David Clapson]

Go to a CAB or law centre or other welfare rights adviser.

I had a very long talk with CAB. And they got me to do an online benefits calculator. But I couldn't get answers to the most important questions. Will my LHA switch to the shared accommodation rate? Don't know, ask the council. (This would reduce my HB by £500 per month.) Would rental income affect my ESA? Don't know, ask the DWP.

The council wouldn't answer calls so I booked the first available appointment to see somebody, which is in 4 weeks.

Haven't called the DWP yet, but I'm dreading it. They routinely lie and get things wrong. Phone calls mean nothing unless they are confirmed in writing.

Another wrinkle is that in Lambeth a change in my circs would trigger a switch to Universal Credit, under which my benefits would be reduced. Unless I get the transitional payment which makes up the difference. But these payments aren't available til next year.

I'll keep trying but I very much doubt there's a way to do it without losing all the rental income. So I'll keep spending pretty much all my benefits on colossal rent, go quietly mad living alone, and not provide anyone else with a home.

Edit: I'm going to ask for advice at the Brixton Advice Centre on Railton Rd.

 

[Puddy_Tat]

Do you have to inform the authorities that you are subletting?

it depends on the circumstances and what 'authorities' are involved.

you would need to tell (or depending on what's in tenancy agreement) get permission of your landlord. (or if you're an owner occupier then at least inform your mortgage lender)

you need to tell the tax-person, although if any rent is within the 'rent a room' allowance, you don't need to go in to detail, just tell them you're doing it (at the time i had a lodger here i was in the realms of tax returns, so I just ticked a box. don't know how you do this if you don't do tax returns.)

if you're currently claiming single person discount off your council tax, you will need to tell the council tax people (although may be useful to mention that when i had a lodger a few years back, he was only here weekdays and kept things like his driving licence at his home address, and was registered with a GP in his home town not here - local council tax people said in that case his being here didn't count. this may be one of those things that different councils interpret differently, though)

and if you're on any sort of income related benefits (which housing benefit is) then you will need to tell the DWP and / or housing benefits people.

It's also possibly worth pointing out while we're at it, that sub-letting in the sense of taking in a lodger if you're in council / housing association isn't usually a problem. the sort of sub-letting they do object to (and there was rumblings about making a criminal offence) is the sort where you let the whole flat / house out and go and live somewhere else.

in Lambeth a change in my circs would trigger a switch to Universal Credit

I'll keep trying but I very much doubt there's a way to do it without losing all the rental income. So I'll keep spending pretty much all my benefits on colossal rent

in which case going down the path of getting landlord to agree some way of sharing the tenancy - although this means your housing benefit would drop to the 'shared house' LHA rate or whatever they call it, and means co-tenant would have equal rights / responsibilities as you do (which may seem unfair if for example all the furniture is yours) and landlord might try to do the joint tenancy thing.

 

[David Clapson]

Also the lodger would be obliged to pay council tax. Unless their home address can be somewhere else.

 

[Puddy_Tat]

Also the lodger would be obliged to pay council tax. Unless their home address can be somewhere else.

yes and no. council tax is not an individual liability like the poll tax (so called 'community charge') was.

with council tax, one person is liable for paying for that property. that one person may claim single person discount if they live alone (i think there are a few situations where a second person is somehow exempt but i'm not expert on them) and has a legal responsibility to tell the council tax people if the entitlement to that discount ends.

the second person does not have to register with council, and if you're not claiming single person discount and another person moves in, it doesn't make any difference.

 

[David Clapson]

If I stop claiming the discount I suppose I would have to give the reason - but not give the council a name. Would that work? Doesn't the electoral roll dept write to me demanding to know the name?

I looked up the electoral roll law - I think it says that by not registering to vote you are not breaking the law unless you have been invited to vote. So if the lodger moves in, but doesn't answer the door when the electoral roll people are doing the rounds, they are in the clear. Unless those cards count as an invitation...the ones addressed to 'the occupants'?

 

[Puddy_Tat]

If I stop claiming the discount I suppose I would have to give the reason - but not give the council a name. Would that work?

don't think you have to give a name. you have to sign something to say you want to claim single person discount (I think you have to confirm it every so often) - I don't think they are going to ask that many questions if you stop claiming the discount.

In the situation I referred to above (when I had a weekday lodger) they were fine with me explaining the situation first time it happened, then a year or so later when he moved back in on the same basis, they wanted something to prove his main address was elsewhere (can't remember what we sent now but it was ok)

I looked up the electoral roll law - I think it says that by not registering to vote you are not breaking the law unless you have been invited to vote. So if the lodger moves in, but doesn't answer the door when the electoral roll people are doing the rounds, they are in the clear. Unless those cards count as an invitation...the ones addressed to 'the occupants'?

it's now individual responsibility, not householder responsibility, so if lodger chooses not to register to vote, that's his problem.

Previously, one person in every household was responsible for registering everyone else who lives at that address. Under individual electoral registration, each person is now required to register to vote individually, rather than by household.

- from here

I think technically it's still technically an offence not to register to vote, but don't think the law is enforced much if at all. the Electoral Commission website doesn't seem to say anything about this. I think the tories are quite content if people who probably won't vote for them disappear off the electoral register...

 

[scifisam]

Edit - are you are HA tenant or private? I kinda assumed HA because you said housing benefit and private landlords don't usually accept sublets, but now I'm not sure. So the rest of this post is only true if you're an HA or council tenant.

Your HA should have a welfare dept who would probably know more about the situation than the CAB - probably a good idea to contact them.

BTW you wouldn't be switched to the LHA rate for a shared room, because HA tenants don't get LHA, they still get HB. However, it would definitely mean a reduction in your HB because they'd take your lodger's income into account as well as yours - he wouldn't be a lodger any more, but a joint tenant. Odds are you'd lose all your HB entitlement.

Honestly, it'd be a terrible idea to have him be a joint tenant. If he turned out to be a nightmare you couldn't evict him, if he didn't pay the rent then you'd be liable for all of it (same for him if you didn't pay it), you'd both have to agree to a swap if you ever wanted to do one, and it would look pretty odd for benefits claims in general. There are good reasons HAs don't like changing tenancies to joint tenancies.

I just looked up my HA's rules and they wouldn't allow a joint tenancy under your circs anyway - it's just for spouses and family members. Even cohabiting couples can only apply to add the other partner after living together for a year.

Do you get the Severe Disabiliy Premium in your ESA entitlement on account of your PIP award?

You may stand to lose this if someone over 18 moves in with you.

Yes if they're a joint tenant, but no if they're a lodger. Lodgers aren't expected to help out with your care, so they don't affect SDP.

 

[David Clapson]

I'm a private tenant.

 

[Puddy_Tat]

it would definitely mean a reduction in your HB because they'd take your lodger's income into account as well as yours

i'm a bit out of touch, but surely that would only be the case if they considered DC and lodger to be a couple?

 

[David Clapson]

I think technically it's still technically an offence not to register to vote, but don't think the law is enforced much if at all.

I can imagine it becoming significant after Brexit for EU citizens trying to stay here in the Hostile Environment. The Windrush scandal and stories like this one Footage emerges of 'distressing' home visit by immigration officers are making people uneasy. Maybe EU citizens will have to prove a full history of voter registration, CT payment and so on.

 

[scifisam]

i'm a bit out of touch, but surely that would only be the case if they considered DC and lodger to be a couple?

Looking at entitled.to the amount of HB you'd be able to apply for would be half the rent (if there are two people). Joint tenants - Entitledto So the HB entitlement would be half what you're getting now. They would expect the other tenant to pay the other half. If they don't then they will both be liable to be evicted.

It sounds like a very bad idea overall.

 

[sheothebudworths]

Looking at entitled.to the amount of HB you'd be able to apply for would be half the rent (if there are two people). Joint tenants - Entitledto So the HB entitlement would be half what you're getting now. They would expect the other tenant to pay the other half. If they don't then they will both be liable to be evicted.

That's not right - he's in private accommodation, so it'd be the shared rate of LHA.

 

[scifisam]

That's not right - he's in private accommodation, so it'd be the shared rate of LHA.

Yes, but the other post was about housing benefit. They're not the same thing as you know, but people use them interchangeably even though they're really different in lots of ways.

I'm also confused because it sounded like "bedroom tax" was a problem, and that only applies to social housing.