lodger means tested benefits


B

bill

Dear Group

A thank you to Anthony Beret made me aware of the boarders £20 disregard &
50% disregard of any excess income for means tested benefits.

However

In the Child poverty action group
Welfare Benefits and Tax Credits Handbook, under income from tenants and
lodgers, lettings without board it states "If someone shares your home under
an informal arrangement, any payment made by her/him to you for her/his
living and accommodation costs is ignored"

(1) What would stop me from using this angle in practice with a lodger,
rather than the boarders disregard?

Also in the Boarders section it says "is not a close relative of yours", One
of my lodgers will be my father who will pay commercial rate (there are
reasons for this) as he will stay at mine for number of nights when on
business.

(2) What effect does a close relative eg my father have on the boarders
disregard is not effective?

Also under boarder section under the notes "any income left after applying
the above disregards may be considered to be intended to be used to meet any
housing cost of your own which are not met by IS, income based JSA or HB,
and may, therefore be offset accordingly"

(3) I am in the situation of being of being on income based JSA with a
mortgage is this a situation that I may benefit from an offset of my housing
costs eg interest or capital for mortgage with any extra income above the
normal boarder/lodgerdisregards?

A lot questions from myself and a thank you to anyone who can help

Bill
 
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S

Ste

In the Child poverty action group
Welfare Benefits and Tax Credits Handbook, under income from tenants and
lodgers, lettings without board it states "If someone shares your home under
an informal arrangement, any payment made by her/him to you for her/his
living and accommodation costs is ignored"

(1) What would stop me from using this angle in practice with a lodger,
rather than the boarders disregard?

Also in the Boarders section it says "is not a close relative of yours", One
of my lodgers will be my father who will pay commercial rate (there are
reasons for this) as he will stay at mine for number of nights when on
business.

(2) What effect does a close relative eg my father have on the boarders
disregard is not effective?

Also under boarder section under the notes "any income left after applying
the above disregards may be considered to be intended to be used to meet any
housing cost of your own which are not met by IS, income based JSA or HB,
and may, therefore be offset accordingly"

(3) I am in the situation of being of being on income based JSA with a
mortgage is this a situation that I may benefit from an offset of my housing
costs eg interest or capital for mortgage with any extra income above the
normal boarder/lodgerdisregards?
Regarding question (1), my interpretation is that such payments are
only ignored if the following conditons are met:

1) The person shares your home under an informal arrangement.
2) The payment covers their living or accomodation costs.

In other words, it must not be a commercial arrangement, and the
payments must only cover the *actual* costs that you incur from having
the lodger.

Regarding question (2), if the boarder must not be a close relative,
then quite simply your father is excluded from that disregard.

Regarding (3), the "income left over" can only go towards meeting
costs. I seriously doubt that this includes capital repayment, and the
interest is surely covered by JSA.

Finally, I think you need to understand what income based benefits are
all about. You cannot make money in any way while you are receiving
income based benefits, because the fundamental tenet of these benefits
is that you have no income, and must be supported. If you do in fact
have an income beyond a nominal amount, then you aren't entitled to
the benefits.

There are, of course, sensible exceptions, but your aim here seems to
be to rent out your house for a profit, while also claiming benefits -
let me tell you, it can't (legally) be done.

Finally, are you aware that for the purposes of JSA any "payments in
kind" are not considered income? For example, if instead of paying
rent, your father buys you a car and decorates your house, that is NOT
taken into account in determining your income. Rather than charging
rent, you should form some sort of barter arrangement with your father
instead.

And if, while on JSA, you happen to be seen working on a building
site, I hope you tell them you are working for food!
 
Z

Zargon

Regarding question (1), my interpretation is that such payments are
only ignored if the following conditons are met:

1) The person shares your home under an informal arrangement.
2) The payment covers their living or accomodation costs.

In other words, it must not be a commercial arrangement, and the
payments must only cover the *actual* costs that you incur from having
the lodger.

Regarding question (2), if the boarder must not be a close relative,
then quite simply your father is excluded from that disregard.

Regarding (3), the "income left over" can only go towards meeting
costs. I seriously doubt that this includes capital repayment, and the
interest is surely covered by JSA.

Finally, I think you need to understand what income based benefits are
all about. You cannot make money in any way while you are receiving
income based benefits, because the fundamental tenet of these benefits
is that you have no income, and must be supported. If you do in fact
have an income beyond a nominal amount, then you aren't entitled to
the benefits.

There are, of course, sensible exceptions, but your aim here seems to
be to rent out your house for a profit, while also claiming benefits -
let me tell you, it can't (legally) be done.

Finally, are you aware that for the purposes of JSA any "payments in
kind" are not considered income? For example, if instead of paying
rent, your father buys you a car and decorates your house, that is NOT
taken into account in determining your income. Rather than charging
rent, you should form some sort of barter arrangement with your father
instead.

And if, while on JSA, you happen to be seen working on a building
site, I hope you tell them you are working for food!- Hide quoted text -

- Show quoted text -
The other thing to "factor in" is that if you have a boarder for a
while on an informal basis they will count as a "non-dependant". i.e.
someone living in your home who is not a dependant. You would then
lose a proportion of your mortgage interest payments and your council
tax benefit.

This would only be the case for someone who was actually living at
your address - short stays don't count if they have their normal
residence somewhere else.

The amount you would lose depends on their circumstances and income.
The following table may assist.
It shows the non-dependant's circumstances and the figures in brackets
are the benefit deduction you would have.

The deductions in the mortgage interest are treated as reductions in
the amount of interest payable to the lender.
You would therefore get less help towards the interest payments -
meaning you would need to make up the shortfall with the lender.

MORTGAGE INTEREST
Gross Earnings £338+ - (£47.75)
Gross Earnings £271 - £337.99 - (£43.50)
Gross Earnings £204 - £270.99 - (£38.20)
Gross Earnings £157 - £203.99 - (£23.35)
Gross Earnings £106 - £156.99 - (£17.00)
Gross Earnings Below £106.00 - (£7.40)
On Pension Credit - (£0.00)
Aged 60+ not Pension Credit - (£7.40)
Aged 60+ not Pension Credit and working - (£base on gross earnings)
On IS / JSA(IB) aged 25+ (£7.40)
On IS / JSA(IB) under 25 - (£0.00)
Under 18 - (£0.00)
Other - (£7.40)

COUNCIL TAX BENEFIT
Gross Earnings £338+ - (£6.95)
Gross Earnings £271 - £337.99 - (£5.80)
Gross Earnings £157 - £270.99 - (£4.60)
Gross Earnings Below £157.00 - (£2.30)
On Pension Credit - (£0.00)
Aged 60+ not Pension Credit - (£2.30)
Aged 60+ not Pension Credit and working - (£base on gross earnings)
On IS / JSA(IB) - (£0.00)
Under 18 - (£0.00)
Other - (£2.30)

Note: the reductions in mortgage interest are the same as you would
have off your rent if you were on Housing Benefit - its not a mistake
- not many people realise that they apply to mortgage interest
"cases".
 
A

anthonyberet

Zargon said:
The other thing to "factor in" is that if you have a boarder for a
while on an informal basis they will count as a "non-dependant". i.e.
someone living in your home who is not a dependant. You would then
lose a proportion of your mortgage interest payments and your council
tax benefit.

This would only be the case for someone who was actually living at
your address - short stays don't count if they have their normal
residence somewhere else.

The amount you would lose depends on their circumstances and income.
The following table may assist.
It shows the non-dependant's circumstances and the figures in brackets
are the benefit deduction you would have.

The deductions in the mortgage interest are treated as reductions in
the amount of interest payable to the lender.
You would therefore get less help towards the interest payments -
meaning you would need to make up the shortfall with the lender.

MORTGAGE INTEREST
Gross Earnings £338+ - (£47.75)
Gross Earnings £271 - £337.99 - (£43.50)
Gross Earnings £204 - £270.99 - (£38.20)
Gross Earnings £157 - £203.99 - (£23.35)
Gross Earnings £106 - £156.99 - (£17.00)
Gross Earnings Below £106.00 - (£7.40)
On Pension Credit - (£0.00)
Aged 60+ not Pension Credit - (£7.40)
Aged 60+ not Pension Credit and working - (£base on gross earnings)
On IS / JSA(IB) aged 25+ (£7.40)
On IS / JSA(IB) under 25 - (£0.00)
Under 18 - (£0.00)
Other - (£7.40)

COUNCIL TAX BENEFIT
Gross Earnings £338+ - (£6.95)
Gross Earnings £271 - £337.99 - (£5.80)
Gross Earnings £157 - £270.99 - (£4.60)
Gross Earnings Below £157.00 - (£2.30)
On Pension Credit - (£0.00)
Aged 60+ not Pension Credit - (£2.30)
Aged 60+ not Pension Credit and working - (£base on gross earnings)
On IS / JSA(IB) - (£0.00)
Under 18 - (£0.00)
Other - (£2.30)

Note: the reductions in mortgage interest are the same as you would
have off your rent if you were on Housing Benefit - its not a mistake
- not many people realise that they apply to mortgage interest
"cases".

Actually lodgers aren't usually treated as non-deps for CTB (or HB)
see reg 3, para 2(e)


The Council Tax Benefit Regulations 2006 [SI 2006/215]

3. Definition of non-dependant

(1) In these Regulations, "non-dependant" means any person, except
someone to whom paragraph (2) applies, who normally resides with a
claimant or with whom a claimant normally resides.
(2) This paragraph applies to—
(a) any member of the claimant´s family;
(b) if the claimant is polygamously married, any partner of his and
any child or young person who is a member of his household and for whom
he or one of his partners is responsible;
(c) a child or young person who is living with the claimant but who
is not a member of his household by virtue of regulation 11 (membership
of the same household);
(d) subject to paragraph (3), any person who, with the claimant, is
jointly and severally liable to pay council tax in respect of a dwelling
for any day under sections 6, 7 or 75 of the 1992 Act (persons liable to
pay council tax);
(e) subject to paragraph (3), any person who is liable to make
payments on a commercial basis to the claimant or the claimant´s partner
in respect of the occupation of the dwelling;
(f) a person who lives with the claimant in order to care for him or
a partner of his and who is engaged by a charitable or voluntary
organisation which makes a charge to the claimant or his partner for the
services provided by that person.
(3) Excepting persons to whom paragraph (2)(a) to (c) and (f) refer, a
person to whom any of the following sub-paragraphs applies shall be a
non-dependant—
(a) a person who resides with the person to whom he is liable to make
payments in respect of the dwelling and either—
(i) that person is a close relative of his or his partner; or
(ii) the tenancy or other agreement between them is other than on a
commercial basis;
(b) a person whose liability to make payments in respect of the
dwelling appears to the relevant authority to have been created to take
advantage of the council tax benefit scheme except someone who was, for
any period within the eight weeks prior to the creation of the agreement
giving rise to the liability to make such payments, otherwise liable to
make payments of rent in respect of the same dwelling;
(c) a person who becomes jointly and severally liable with the
claimant for council tax in respect of a dwelling and who was, at any
time during the period of eight weeks prior to his becoming so liable, a
non-dependant of one or more of the other residents in that dwelling who
are so liable for the tax, unless the relevant authority is satisfied
that the change giving rise to the new liability was not made to take
advantage of the council tax benefit scheme.
 
Z

Zargon

The other thing to "factor in" is that if you have a boarder for a
while on an informal basis they will count as a "non-dependant". i.e.
someone living in your home who is not a dependant. You would then
lose a proportion of your mortgage interest payments and your council
tax benefit.
This would only be the case for someone who was actually living at
your address - short stays don't count if they have their normal
residence somewhere else.
The amount you would lose depends on their circumstances and income.
The following table may assist.
It shows the non-dependant's circumstances and the figures in brackets
are the benefit deduction you would have.
The deductions in the mortgage interest are treated as reductions in
the amount of interest payable to the lender.
You would therefore get less help towards the interest payments -
meaning you would need to make up the shortfall with the lender.
MORTGAGE INTEREST
Gross Earnings £338+ - (£47.75)
Gross Earnings £271 - £337.99 - (£43.50)
Gross Earnings £204 - £270.99 - (£38.20)
Gross Earnings £157 - £203.99 - (£23.35)
Gross Earnings £106 - £156.99 - (£17.00)
Gross Earnings Below £106.00 - (£7.40)
On Pension Credit - (£0.00)
Aged 60+ not Pension Credit - (£7.40)
Aged 60+ not Pension Credit and working - (£base on gross earnings)
On IS / JSA(IB) aged 25+ (£7.40)
On IS / JSA(IB) under 25 - (£0.00)
Under 18 - (£0.00)
Other - (£7.40)
COUNCIL TAX BENEFIT
Gross Earnings £338+ - (£6.95)
Gross Earnings £271 - £337.99 - (£5.80)
Gross Earnings £157 - £270.99 - (£4.60)
Gross Earnings Below £157.00 - (£2.30)
On Pension Credit - (£0.00)
Aged 60+ not Pension Credit - (£2.30)
Aged 60+ not Pension Credit and working - (£base on gross earnings)
On IS / JSA(IB) - (£0.00)
Under 18 - (£0.00)
Other - (£2.30)
Note: the reductions in mortgage interest are the same as you would
have off your rent if you were on Housing Benefit - its not a mistake
- not many people realise that they apply to mortgage interest
"cases".
Actually lodgers aren't usually treated as non-deps for CTB (or HB)
see reg 3, para 2(e)

The Council Tax Benefit Regulations 2006 [SI 2006/215]

3. Definition of non-dependant

(1) In these Regulations, "non-dependant" means any person, except
someone to whom paragraph (2) applies, who normally resides with a
claimant or with whom a claimant normally resides.
(2) This paragraph applies to-
(a) any member of the claimant´s family;
(b) if the claimant is polygamously married, any partner of his and
any child or young person who is a member of his household and for whom
he or one of his partners is responsible;
(c) a child or young person who is living with the claimant but who
is not a member of his household by virtue of regulation 11 (membership
of the same household);
(d) subject to paragraph (3), any person who, with the claimant, is
jointly and severally liable to pay council tax in respect of a dwelling
for any day under sections 6, 7 or 75 of the 1992 Act (persons liable to
pay council tax);
(e) subject to paragraph (3), any person who is liable to make
payments on a commercial basis to the claimant or the claimant´s partner
in respect of the occupation of the dwelling;
(f) a person who lives with the claimant in order to care for him or
a partner of his and who is engaged by a charitable or voluntary
organisation which makes a charge to the claimant or his partner for the
services provided by that person.
(3) Excepting persons to whom paragraph (2)(a) to (c) and (f)refer, a
person to whom any of the following sub-paragraphs applies shall be a
non-dependant-
(a) a person who resides with the person to whom he is liable to make
payments in respect of the dwelling and either-
(i) that person is a close relative of his orhis partner; or
(ii) the tenancy or other agreement between them is other than on a
commercial basis;
(b) a person whose liability to make payments in respect of the
dwelling appears to the relevant authority to have been created to take
advantage of the council tax benefit scheme except someone who was, for
any period within the eight weeks prior to the creation of the agreement
giving rise to the liability to make such payments, otherwise liable to
make payments of rent in respect of the same dwelling;
(c) a person who becomes jointly and severally liablewith the
claimant for council tax in respect of a dwelling and who was, at any
time during the period of eight weeks prior to his becoming so liable, a
non-dependant of one or more of the other residents in that dwelling who
are so liable for the tax, unless the relevant authority is satisfied
that the change giving rise to the new liability was not made to take
advantage of the council tax benefit scheme.- Hide quoted text -

- Show quoted text -
Hi Anthony - quite agree that lodgers are not treated as non-
dependants - but I was focussing on the initial point about "If
someone shares your home under
an informal arrangement,". For HB & CTB (and therefore presumably
Mortgage Interest payments) the assessor would not just leave someone
as an "informal boarder". If they had no other address they would
treat them as a non-dep and the charges would then apply.
 
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A

anthonyberet

Zargon said:
Zargon said:
In the Child poverty action group
Welfare Benefits and Tax Credits Handbook, under income from tenants and
lodgers, lettings without board it states "If someone shares your home under
an informal arrangement, any payment made by her/him to you for her/his
living and accommodation costs is ignored"
(1) What would stop me from using this angle in practice with a lodger,
rather than the boarders disregard?
Also in the Boarders section it says "is not a close relative of yours", One
of my lodgers will be my father who will pay commercial rate (there are
reasons for this) as he will stay at mine for number of nights when on
business.
(2) What effect does a close relative eg my father have on the boarders
disregard is not effective?
Also under boarder section under the notes "any income left after applying
the above disregards may be considered to be intended to be used to meet any
housing cost of your own which are not met by IS, income based JSA or HB,
and may, therefore be offset accordingly"
(3) I am in the situation of being of being on income based JSA with a
mortgage is this a situation that I may benefit from an offset of my housing
costs eg interest or capital for mortgage with any extra income above the
normal boarder/lodgerdisregards?
Regarding question (1), my interpretation is that such payments are
only ignored if the following conditons are met:
1) The person shares your home under an informal arrangement.
2) The payment covers their living or accomodation costs.
In other words, it must not be a commercial arrangement, and the
payments must only cover the *actual* costs that you incur from having
the lodger.
Regarding question (2), if the boarder must not be a close relative,
then quite simply your father is excluded from that disregard.
Regarding (3), the "income left over" can only go towards meeting
costs. I seriously doubt that this includes capital repayment, and the
interest is surely covered by JSA.
Finally, I think you need to understand what income based benefits are
all about. You cannot make money in any way while you are receiving
income based benefits, because the fundamental tenet of these benefits
is that you have no income, and must be supported. If you do in fact
have an income beyond a nominal amount, then you aren't entitled to
the benefits.
There are, of course, sensible exceptions, but your aim here seems to
be to rent out your house for a profit, while also claiming benefits -
let me tell you, it can't (legally) be done.
Finally, are you aware that for the purposes of JSA any "payments in
kind" are not considered income? For example, if instead of paying
rent, your father buys you a car and decorates your house, that is NOT
taken into account in determining your income. Rather than charging
rent, you should form some sort of barter arrangement with your father
instead.
And if, while on JSA, you happen to be seen working on a building
site, I hope you tell them you are working for food!- Hide quoted text -
- Show quoted text -
The other thing to "factor in" is that if you have a boarder for a
while on an informal basis they will count as a "non-dependant". i.e.
someone living in your home who is not a dependant. You would then
lose a proportion of your mortgage interest payments and your council
tax benefit.
This would only be the case for someone who was actually living at
your address - short stays don't count if they have their normal
residence somewhere else.
The amount you would lose depends on their circumstances and income.
The following table may assist.
It shows the non-dependant's circumstances and the figures in brackets
are the benefit deduction you would have.
The deductions in the mortgage interest are treated as reductions in
the amount of interest payable to the lender.
You would therefore get less help towards the interest payments -
meaning you would need to make up the shortfall with the lender.
MORTGAGE INTEREST
Gross Earnings £338+ - (£47.75)
Gross Earnings £271 - £337.99 - (£43.50)
Gross Earnings £204 - £270.99 - (£38.20)
Gross Earnings £157 - £203.99 - (£23.35)
Gross Earnings £106 - £156.99 - (£17.00)
Gross Earnings Below £106.00 - (£7.40)
On Pension Credit - (£0.00)
Aged 60+ not Pension Credit - (£7.40)
Aged 60+ not Pension Credit and working - (£base on gross earnings)
On IS / JSA(IB) aged 25+ (£7.40)
On IS / JSA(IB) under 25 - (£0.00)
Under 18 - (£0.00)
Other - (£7.40)
COUNCIL TAX BENEFIT
Gross Earnings £338+ - (£6.95)
Gross Earnings £271 - £337.99 - (£5.80)
Gross Earnings £157 - £270.99 - (£4.60)
Gross Earnings Below £157.00 - (£2.30)
On Pension Credit - (£0.00)
Aged 60+ not Pension Credit - (£2.30)
Aged 60+ not Pension Credit and working - (£base on gross earnings)
On IS / JSA(IB) - (£0.00)
Under 18 - (£0.00)
Other - (£2.30)
Note: the reductions in mortgage interest are the same as you would
have off your rent if you were on Housing Benefit - its not a mistake
- not many people realise that they apply to mortgage interest
"cases".
Actually lodgers aren't usually treated as non-deps for CTB (or HB)
see reg 3, para 2(e)

The Council Tax Benefit Regulations 2006 [SI 2006/215]

3. Definition of non-dependant

(1) In these Regulations, "non-dependant" means any person, except
someone to whom paragraph (2) applies, who normally resides with a
claimant or with whom a claimant normally resides.
(2) This paragraph applies to-
(a) any member of the claimant´s family;
(b) if the claimant is polygamously married, any partner of his and
any child or young person who is a member of his household and for whom
he or one of his partners is responsible;
(c) a child or young person who is living with the claimant but who
is not a member of his household by virtue of regulation 11 (membership
of the same household);
(d) subject to paragraph (3), any person who, with the claimant, is
jointly and severally liable to pay council tax in respect of a dwelling
for any day under sections 6, 7 or 75 of the 1992 Act (persons liable to
pay council tax);
(e) subject to paragraph (3), any person who is liable to make
payments on a commercial basis to the claimant or the claimant´s partner
in respect of the occupation of the dwelling;
(f) a person who lives with the claimant in order to care for him or
a partner of his and who is engaged by a charitable or voluntary
organisation which makes a charge to the claimant or his partner for the
services provided by that person.
(3) Excepting persons to whom paragraph (2)(a) to (c) and (f) refer, a
person to whom any of the following sub-paragraphs applies shall be a
non-dependant-
(a) a person who resides with the person to whom he is liable to make
payments in respect of the dwelling and either-
(i) that person is a close relative of his or his partner; or
(ii) the tenancy or other agreement between them is other than on a
commercial basis;
(b) a person whose liability to make payments in respect of the
dwelling appears to the relevant authority to have been created to take
advantage of the council tax benefit scheme except someone who was, for
any period within the eight weeks prior to the creation of the agreement
giving rise to the liability to make such payments, otherwise liable to
make payments of rent in respect of the same dwelling;
(c) a person who becomes jointly and severally liable with the
claimant for council tax in respect of a dwelling and who was, at any
time during the period of eight weeks prior to his becoming so liable, a
non-dependant of one or more of the other residents in that dwelling who
are so liable for the tax, unless the relevant authority is satisfied
that the change giving rise to the new liability was not made to take
advantage of the council tax benefit scheme.- Hide quoted text -

- Show quoted text -
Hi Anthony - quite agree that lodgers are not treated as non-
dependants - but I was focussing on the initial point about "If
someone shares your home under
an informal arrangement,". For HB & CTB (and therefore presumably
Mortgage Interest payments) the assessor would not just leave someone
as an "informal boarder". If they had no other address they would
treat them as a non-dep and the charges would then apply.
Oh yes I agree too - they will be taken into account no matter what.
The only exception would be if they were both tenants of another
landlord, in a home of multiple occupation. That isn't the situation as
described.
 
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