A benefits question: mum is downsizing, can she rent out the house to my sister who is in a council house?

[LylaLee]

Mum wants to move into a retirement sheltered accommodation. She has a 3 bed at the moment.

My sister lives in a 3 bed council house with 3 children and receives housing benefit.

Can mum rent the house to my sister and have housing benefit pay the amount they are paying sister right now? It would be cheaper than current rentals in the area, but the advantage to mum would be that she knows they won't trash the place.

Sister would be in a nicer area than where she currently is.

The council house is in a bad area but she can't afford to move somewhere nicer on housing benefit.

A few things to consider from mums point of view.

is the house owned outright, if not she would need permission from bank to rent out. How is mum planning on paying for her new place ?
mum would need to register as landlord with local authorities and have landlord insurance comply with any all fire regulations.

sister will be giving up council housing and if the situation went wrong she’d be seen as making herself homeless.
what are mums plans for the house after she passes.
you never used to be able to rent from a family member so do check this thoroughly. Also consider if sister needs to go back to work ?

this has the potential to create major problems for both of them. The way the country is currently I wouldn’t give up council housing.

My father in law remarried 12 years ago and his new wife went to live with him in his owned house. I have just heard that she never gave up the tenancy and one of her 5 children has been living there. The person concerned was always named as an occupant of the house as she has grown up there and just stayed there whilst her mother moved in with her new husband into his owned property. The daughter now has a partner and two children of her own living there. Now my father in law is ill and his new wife is likely to inherit his house. My question is, what happens to her daughter who is living in a council house in her mother's name? Is this fraud?