Housing Benefit & Pension Credit

[lookingaftermum]

Hi All,

 

My mum who is 74, and working full time for a big food retailer needs to retire. I have manged to convince her that she needs to quit her job, and move back near to me.

 

She called the HMRC to ask about her state pension, and apparently its only worth £44 per week! not sure how thats possible, but anyway, she can apply for Pension Credit to receive the minimum £163. still rubbish. but hey.

 

So the issue is around housing benefit. I have recently got a second property which is a 2 bed flat. I have convinced my mum to accept moving into this at a cheap rate. I could rent it privately for £875 a month, but, clearly i cant do that to my mum. I do need to clear £650 though to break even on my expense.

 

Anyway the question. She hasnt quit yet, will do this in the next couple of weeks, but i shall start the process to apply for pension credit as soon as she does, but what about housing benefit?

 

Is it better for her to declare the real rental value of the property £875 and hope she gets more benefit allowance which would help her or because she is on her own, and should not be in a big property she claims for the reduced amount that i happy to let it for to her at £650?

 

Because of pension credit will she get 100% cover or reduced because of 2 rooms. it does not seem clear. if she isnt going to get 100%, then it seems sensible to me to claim the higher amount so that any shortfall is closer to the £650 making it not reliant on her to use any of her meagre £163 pension to cover rent.

 

Id like to help her out and claim the higher amount so she has more, but am weary that a claim could be challenged

[honeybee13]

Hello and welcome to CAG. People should be along later to advise you.

 

I think you need to check out the rules about renting a house to a relative before you go much further so that you don't have problems in the future.

 

Best, HB

[honeybee13]

Here's some information from Shelter, there's plenty more online.

 

https://england.shelter.org.uk/housing_advice/benefits/housing_benefit_renting_from_family

 

HB

[stu007]

Housing Benefit: Renting from Relatives

 

http://tinyurl.com/y5slrkws

 

SN03078.pdf

[dx100uk]

document above now working

[Will Goodfellow]

Because of pension credit will she get 100% cover or reduced because of 2 rooms. it does not seem clear. if she isnt going to get 100%, then it seems sensible to me to claim the higher amount so that any shortfall is closer to the £650 making it not reliant on her to use any of her meagre £163 pension to cover rent.

 

Id like to help her out and claim the higher amount so she has more, but am weary that a claim could be challenged

 

As long as you would otherwise rent the property out on a commercial basis, there should be no issue with her claiming housing benefit. As it is a private rental, there will be no reduction in housing benefit for spare rooms, bedroom tax does not apply in the private sector but only for social housing.

 

In private rental, she will receive local housing allowance for the postcode which the property is in. She'll receive up to the maximum rate for a one bedroom property if she is entitled to the maximum rate of LHA.

 

You can calculate how much rent she will receive by using the one bedroom entitlement and entering the postcode here:

 

https://lha-direct.voa.gov.uk/

 

You should also check if she is entitled to the full LHA rate by entering her details here:

 

https://benefits-calculator.turn2us.org.uk/AboutYou

 

Depending on her LHA entitlement and the LHA rate for the property, it is possible that she won't even receive £650 per month.