Housing Benefit Claim declined for sister tenant?

Hi Craig,

Please see the .Gov site >> https://www.gov.uk/housing-benefit/eligibility

" 3. Eligibility

Use a a benefits calculator to check if you can get Housing Benefit before you apply. You may need to claim Universal Credit instead.

You may get Housing Benefit if:

you pay rent
you’re on a low income or claiming benefits
your savings are below a certain level - usually £16,000

You can apply if you’re employed or unemployed, but if you live with a partner, only one of you can get Housing Benefit.

If you’re single and under 35, you can only get Housing Benefit for bed-sit accommodation or a single room in shared accommodation.
Who isn’t eligible

Usually you won’t get Housing Benefit if:

your savings are over £16,000 - unless you get Guarantee credit of Pension Credit
you live in the home of a close relative
you’re a full-time student - unless you’re disabled or have children
you’re residing in the UK as an European Economic Area jobseeker
you’re an asylum seeker or sponsored to be in the UK
you’re subject to immigration control and your granted leave states that you can’t claim public funds

You usually can’t get Housing Benefit and Universal Credit at the same time (unless you’re in certain kinds of supported housing).
If you own your home

You can’t get Housing Benefit, but you may be able to get Support for Mortgage Interest (SMI)."

Reply to the comment left by Neil Patterson at 23/11/2017 - 15:52
Thanks, she filled out the online forms and declared everything i.e. her brother is her landlord etc but it looked liked it would be accepted as our dad is a retired pensioner living in her flat for a number of years in which there is no rent received and no mortgage on the property.

the home she owns is seen as an asset, thus capital if she is not living in it. Thus benefits turned down. She would need to sell it and spend her money until it reaches the benefit level as above, any money from her husband should be declared as child maintenance not partner maintenance as child maintenance is not included as income while ex-maintenance is. This will effect all accessible benefits and tax, also applies to sick benefit , unemployment etc. Second homes as it is called if you are not living it is income/asset even if you don't get rent. in some cases you can get housing benefit even if you rent from family, but it is her flat that seems to be the problem

Reply to the comment left by loretta wight at 23/11/2017 - 19:15
Thanks Loretta

Reply to the comment left by Neil Patterson at 23/11/2017 - 15:52
I don't think she would qualify for "Support for Mortgage Interest" (even if she had a mortgage) as the flat is not her home, she is not living there (her father is), so like Loretta has said, it is simply an asset that she could sell to raise capital (and then live on the capital until below the threshold for claiming benefits).

If she had been renting out her flat at full market value, then she could have perhaps claimed that the flat was a business asset and as such the equity in it should not be counted as her personal capital, however, she has let her father stay there rent free so it is clearly not a business asset, it is a personal asset, and because of this it can rule out her entitlement to benefits (including Housing Benefit).

I do seem to recall that there is some case law saying that 10% of the market value should be deducted when calculating the value of a property asset, so as to allow for the selling costs. - But again I don't think this would apply in this case as the property is presumably still worth more than £16k even taking the 10% into account.

Reply to the comment left by Cbev at 23/11/2017 - 19:40
if you want to see a calculation ..go to entitled website, but as soon as you put in a second home you will see how it affects your benefits. Also with second homes it doesn't matter if it is a business and getting income or personal it is cancels out your benefits. Putting the house into a trust might work but the DWP are getting wise to this as people did it to stop paying for care. Good luck

Reply to the comment left by loretta wight at 24/11/2017 - 17:41Hi Loretta
The "Entitled To" website is very useful for fairly standard situations, but it does not always take account of the lesser known exemptions, or situations in which they may occur, so your statement "Also with second homes it doesn't matter if it is a business and getting income or personal it is cancels out your benefits." is not 100% correct. If someone owns property that is let out as part of a business (including a sole trader business), then the asset may count as a business asset and thus be excluded from the calculation of a person's "capital".

The rental income from the property treated as a business asset, minus some allowable costs (e.g. mortgage, insurance, etc), would count as a person's "income" (or capital that is then spent each month so never reaches the threshold where it would affect the benefit entitlement), but the actual value of the asset itself which generates that income is not counted as capital. - This applies to Housing Benefit, AND also to other benefits, e.g. JSA, ESA, etc. - I believe this to be the correct position because I have previously won an appeal on this same point.
I cannot say whether the position in Scotland is different to this, as the benefit appeal I dealt with was in England.
None of this applies to the OP's original question/situation, but it may be of use for other people who find that they have property assets, but very little income, and may thus need to claim Housing Benefit for themselves.

Reply to the comment left by Robert Mellors at 24/11/2017 - 22:05
My sister is an advice worker and my friend works in DWP, entitled gives a rough estimate of possible income. There was a change a couple of years ago for those on ESA. I know many people who have been rejected outright but anything is possible.

Would it be feasible for your sister to charge her father rent at the housing benefit allowance level and for her father to make a claim for housing benefits instead? A roundabout method of achieving the same ends.

Reply to the comment left by Kate Mellor at 26/11/2017 - 12:10
Beware of the "contrived tenancy" rules within the Housing Benefit regulations!!!