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JSA - Considering Taking In A Lodger


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Hi,

 

I'm currently claiming Income-Based JSA and receiving £71 per week.

 

I am considering taking in a lodger under the Rent a Room Scheme. The rent would be £85 per week.

 

How would that affect my benefit?

 

At present I'm not liable for Council Tax either would that be affected?

 

Any replies would be appreciated.

 

Thanks

 

Terry

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would your lodger be working and paying rent themselves, or would they be claiming HB?

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I dont think it would be co-habiting, if you genuinelly put ad in paer, got lodger, they had own room, etc. But the income would ned to be declared and thge JSA paid to you would be reduced I do believe.

 

Why do you say you are notliable for council tax, do you not pay it at all ?, or do you get council tax paid for (by council) ?, if so I suspect you would still need to tell them (as single people pay different rates), although as you are paying nothing, there would be no change.

 

Im sure others can tell you more.

 

Andy

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Hi, thanks for the replies.

 

Just to clarify my situation:

 

I currently live on my own so would be getting a 25% discount off my Council Tax if I was working.

 

As I'm claiming JSA I'm receiving Council Tax benefit for the full amount I would be liable for.

 

I've only just put an Ad up for a lodger, but someone is interested in the room and apparently they

are not working at the moment. I have not taken any further action just yet, as I wanted to find

out the implications of taking in a lodger.

 

I'm having to do this because the Nationwide have told me to sell my house, as they will no longer allow me to pay interest-only to them, When my mortgage is due this month I will have

a £150 shortfall taking my arrears to over 3 months of payments, effectively

triggering re-possession action.

 

That's why I am trying to see if taking in a lodger will help me out.

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Speaking from experience, I had NO problem with the DWP whatsoever regarding LTAHAW when I had a lodger. I informed DWP and HB I had a lodger and on every form I had to fill in he was declared as a lodger and how much the rent was. He was here for about 7 years before he passed away in April this year. The latter four years I was in receipt of income related ESA and no problems with that or full HB. He was on Pension Credits and HB paid his rent direct to me. But, one assumes, every case is different ...

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Well, first off here is the DWP Decision Makers Guide chapter 28, which deals with the types of income that are taken into account when claiming means tested benefits. Scroll down to section 28182 for the relevant information regarding boarders in your home. The general idea is that rent paid to you in this way is partly taken into account. In your case it would work like this:

 

  • Rent income £85 per week
  • Deduct £20 to leave £65
  • Now further deduct 50% of the remaining £65 = £37.50
  • This amount will be deducted from your £71 JSA(IB)
  • So your weekly JSA would be £33.50

So you would be better off, but not by the full amount of the rent you receive. It should make no difference if your lodger himself is claiming a benefit, as JSA does not take non dependents into consideration. I'm afraid I can't speak to the CTB situation as it's outside my area of knowledge.

 

Regarding the issue of cohabiting, shouldn't be a problem. This is dealt with in DMG chapter 11.

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Actually, could someone read section 28181 of DMG 28 for me to see if I've parsed it correctly - the advice I've given above could be completely wrong. I'll let it stand until someone can check my working.

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Well, first off here is the DWP Decision Makers Guide chapter 28, which deals with the types of income that are taken into account when claiming means tested benefits. Scroll down to section 28182 for the relevant information regarding boarders in your home. The general idea is that rent paid to you in this way is partly taken into account. In your case it would work like this:

 

 

  • Rent income £85 per week
  • Deduct £20 to leave £65
  • Now further deduct 50% of the remaining £65 = £37.50
  • This amount will be deducted from your £71 JSA(IB)
  • So your weekly JSA would be £33.50

 

So you would be better off, but not by the full amount of the rent you receive. It should make no difference if your lodger himself is claiming a benefit, as JSA does not take non dependents into consideration. I'm afraid I can't speak to the CTB situation as it's outside my area of knowledge.

 

Regarding the issue of cohabiting, shouldn't be a problem. This is dealt with in DMG chapter 11.

 

Hi thanks for the reply.

 

I thought the figures would be somewhat like that. I guess I also have to take into account the

extra gas and electric that will be consumed, especially if the lodger does not work.

I could end up no better off - geez decisions, decisions! I need a long think about

this.

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This is what is to be encouraged by the bedroom tax. So I can't see how they can say you must take a lodger or move out (which many will not be able to afford), helping them by reducing the homeless problem, and then accuse you of co-habiting.

 

The thing is to do it all properly and make sure everything is reported.

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Its not Board and Lodgings I'm providing as defined in section 28183

I'd be providing the room under the Rent a Room scheme.

 

Not sure if that makes any difference.

Edited by tezzaa61
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tezzaa, again only my case, my lodger paid £60pw for the room and shared facilities. He then contributed for his share of all bills and paid for his own consumables ...

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tezzaa, again only my case, my lodger paid £60pw for the room and shared facilities. He then contributed for his share of all bills and paid for his own consumables ...

 

Did you do that under the Rent a Room Scheme?

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No idea what the Rent a Room Scheme is! He was a lodger and that's what he had to contribute. He shared the bathroom, kitchen, living room, garden. Nothing was deducted from my benefits but, as he was fully declared, I didn't think anything of it. He was a very good friend of mine hence the comparatively low rent.

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No idea what the Rent a Room Scheme is! He was a lodger and that's what he had to contribute. He shared the bathroom, kitchen, living room, garden. Nothing was deducted from my benefits but, as he was fully declared, I didn't think anything of it. He was a very good friend of mine hence the comparatively low rent.

 

OK, thanks. I guess I'll have to weigh up all the pros and cons and decide on my best course of action.

 

Cheers

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Hi thanks for the reply.

 

I thought the figures would be somewhat like that. I guess I also have to take into account the

extra gas and electric that will be consumed, especially if the lodger does not work.

I could end up no better off - geez decisions, decisions! I need a long think about

this.

 

You're welcome, but do note what I said - I may be giving you duff advice. :oops:

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This is what is to be encouraged by the bedroom tax. So I can't see how they can say you must take a lodger or move out (which many will not be able to afford), helping them by reducing the homeless problem, and then accuse you of co-habiting.

 

The thing is to do it all properly and make sure everything is reported.

 

(Bolding mine)

 

They can't, as per DMG 11 I posted upthread. It would be treated as a commercial transaction rather than a cohabiting arrangement. If anyone at the DWP even so much as hints that they're a couple, he should wave said DMG in their faces - politely, of course. :-)

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Rent income £85 per week

  • Deduct £20 to leave £65
  • Now further deduct 50% of the remaining £65 = £37.50
  • This amount will be deducted from your £71 JSA(IB)
  • So your weekly JSA would be £33.50

 

So you would be better off, but not by the full amount of the rent you receive. .

 

There would also be a need to check how much is added to income, if that takes you over "How much the law says you need to live on" for your circumstances, the extra amount (excess income) will cause the council to reduce the amount of HB and CTB.

 

Currently with me, the "excess income" I have, the council take 85% towards HB and CTB

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There would also be a need to check how much is added to income, if that takes you over "How much the law says you need to live on" for your circumstances, the extra amount (excess income) will cause the council to reduce the amount of HB and CTB.

 

Currently with me, the "excess income" I have, the council take 85% towards HB and CTB

 

Thanks for flagging that up, I wouldn't have thought of that. Seems like it's hardly

going to be worth my while doing this.

 

Cheers

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tbf, I remain a little confused as to how my extra £60pw didn't affect ESA, HB or CTB at all, which seems a little at odds with the general advice. I'm probably missing something ...

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There would also be a need to check how much is added to income, if that takes you over "How much the law says you need to live on" for your circumstances, the extra amount (excess income) will cause the council to reduce the amount of HB and CTB.

 

Currently with me, the "excess income" I have, the council take 85% towards HB and CTB

 

Well, OP is not receiving HB, though is receiving CTB and, presumably, the single adult rebate.

 

I'm not so good with HB, but my understanding was that if you receive it because you have a passported entitlement from a means tested benefit, it will always be the maximum allowable rate. If the council did the means test themselves (because you are on a low income but work, or because you receive a contributory benefit) then the rules are different.

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Well, OP is not receiving HB, though is receiving CTB and, presumably, the single adult rebate.

 

I'm not so good with HB, but my understanding was that if you receive it because you have a passported entitlement from a means tested benefit, it will always be the maximum allowable rate. If the council did the means test themselves (because you are on a low income but work, or because you receive a contributory benefit) then the rules are different.

 

I am on contributory benefit, so with the above info, my post is not relevant.

 

Very sorry

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