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Original poster

Housing benefit - help me understand?

23 replies

goldpendant · 27/10/2019 22:12

My DDad is becoming increasingly frail and not coping in his 2 floor, 2 bed council house. He's been lucky to keep hold of it as a single man but I feel it's time to downsize and certainly get to one floor.

I am toying with buying a smaller 1/2 bed investment property near me, same borough but closer to my house - so I can check in on him and make sure the bathroom etc is fit for purpose (I can barely fit in his current shower cubicle as a size 12, he's considerably tubbier).

If he were to relinquish his council property which he's been in for 15 years, would he be eligible for housing benefit towards rent in my btl property? It would be let at less than market value. We certainly wouldn't be looking to or probably able to make a profit while he is able to live there.

Longer term, if he gives up his council house, is he less eligible for care in his later later years? He's 72 with heart failure so I can't see him hanging around for too much longer, much as it pains me to say.

I think I need an honest chat with the council to see what we could agree but are there hard and fast laws about this I should know?

Thanks in advance

OP posts:
Original poster
goldpendant · 27/10/2019 22:13

I should have said, he's retired, no income, no savings, nada. Just a dodgy ticker....

OP posts:
Knittedfairies · 27/10/2019 22:26

Some information here It does state that the property would have to be let at a commercial rent though, so you might have to rethink your plan of him paying less than the market rate.

Original poster
goldpendant · 27/10/2019 22:29

But if we were prepared to sub him any extra he needed to rent at market rate? Not sure how that adds up.... it wouldn't be far off though.

I completed an online HB form as if I were him and seems he can get up to £1500 month round here (I'm shocked and not sure this can be right but we are in a nice London Borough?) - market rate would be 1600.

Thoughts?

OP posts:
WishITookLifeSeriously · 27/10/2019 22:49

I have rented from my half brother before. My local council were absolutely fine with it as we were honest and open with them from the start. I do remember checking on here before he decided to buy the house though and a few councils dont allow it.
I was awarded the highest amount of housing benefit and the house was let at a considerably lower price than market value. He actually signed the house over to me in the end and the council had no problem with that either. I just informed them that I no longer wanted to claim housing benefit.
Hope it works out for you. I'd do lots of checking

MyDcAreMarvel · 27/10/2019 22:53

I would charge £1600 and give him £100 a month worth of supermarket vouchers.

CrazyCatLady159 · 27/10/2019 22:59

My local council are ok with renting from family members however, it has to have been rented out to non family tenants previously - then rented to family.
Also, are you sure he can get £1500 per month for a 1 bed?
the 2 bed rate for round here is £875 and I'm in a London borough

Isleepinahedgefund · 27/10/2019 23:52

There are two issues here. Firstly the family relationship between landlord and tenant, and secondly the nature of the tenancy. The first is not a barrier- I have claimed HB for a property owned by a close relative, and when I worked as an HB claims assessor I processed many a claim where the tenancy was between family.

The second is more problematic for you. The rent figure isn’t important as long as you can justify it - my relative rented to me at far less than market rent (50% less) but his rationale was based on how much he needed back from his investment, not what market rents were. If you are subbing him extra to make it up the rent, and you are the landlord, I think there is a strong possibility they will call it a “contrived tenancy” - ie it’s been made up to get the state to pay the rent/mortgage. A genuine commercial landlord would not sub a tenant the shortfall. In my situation, I had been paying the rent myself for a long while before I needed to claim HB, and so had proven the commerciality of the agreement by demonstrating that I had been paying full rent for a while.

I have to say I would have had difficulty as an HB assessor seeing your proposed situation as a commercial tenancy. You will buy the property with tour dad’s needs in mind - not a commercial decision. Would you kick your dad out if he couldn’t pay rent, I.e. if he didn’t get HB? I shouldn’t think so.

MiniMum97 · 28/10/2019 00:12

Have you looked into the possibility of a transfer to somewhere more suitable? You could also ask social services for an OT assessment to see whether any aids or adaptions could be fitted to make the property more suitable for him. If that's not possible, you can use the report to support the fact the property is unsuitable so that he is rehoused.

Soc Serv can also assess to see whether a care package is appropriate.

ferrier · 28/10/2019 00:44

The council may well consider his needs sympathetically as they would get a 2 bed property back to rent out to a family in return for a 1 bed property for your Dad.
Presumably he gets HB currently and is subject to bedroom tax?

MyDcAreMarvel · 28/10/2019 01:55

and is subject to bedroom tax? obviously he is not.

ferrier · 28/10/2019 18:30

Apologies. It do know really that it doesn't apply to pensioners Blush Though stating 'obviously' and not then explaining is not very helpful 🙄

LIZS · 28/10/2019 18:37

You need to check local regulations as some councils do not fund family owned rentals or place conditions on the tenancy.

Leah2005 · 28/10/2019 18:37

My DH owned the property my dfil lived in and I'm sure he couldn't claim housing benefit to pay my DH. Have you spoken to council to get him in more appropriate housing? I'm sure they would appreciate the return of a house in exchange for a flat in a retirement scheme.

Babyroobs · 30/10/2019 00:16

I really don't think you can just buy a property solely with the purpose of renting to a family member. I'm pretty sure it needs to have been rented out before.

Ronnie27 · 30/10/2019 00:21

It wouldn’t be granted here, too close a relative and the property isn’t intended as a commercial let iyswim, even though yours sounds like a great solution for both of you the argument would be that the situation hasn’t come about organically, it’s been set up to take advantage of the system. Would you charge market rent, would you evict your dad if he didn’t pay etc? Probably not.

Gingerkittykat · 30/10/2019 00:39

When they talk about benefit fraudsters do they mean people who try and get a relative's HB to pay for their mortgage?

I would talk to the council about suitable sheltered housing or bungalows to rent for pensioners.

rose69 · 30/10/2019 07:34

If he downsizes into a council property he may get compensation and help with moving costs (done to encourage people like him to move).

ivykaty44 · 02/11/2019 20:16

Why don’t you put in for a transfer to a smaller, ground floor or sheltered housing with lift property with your own local council?

Then buy an apartment and rent it out as BTL

Original poster
goldpendant · 03/11/2019 17:11

I highly doubt he'd get anything smaller anywhere close. It's a big borough and I'd like to keep him close by.

I've looked it all up on shelter and citizens advice and it seems totally fine. Council is less clear but only says you can't claim HB if you live with a close relative.

The council would get a house back and he'd still be claiming the same benefit so I can't see that they'd have too much of a problem. I'll need to call them I expect.

OP posts:
Original poster
goldpendant · 03/11/2019 17:12

@Gingerkittykat it's quite common, definitely not fraud if the council allows it!

OP posts:
Alicenwonderland · 03/11/2019 17:31

In our area the property needs to have been previously rented out before. I rent from my father, it was a faff to get HB but he's been renting it out for years so it was accepted.

Difficultcustomer · 03/11/2019 17:33

I've looked it all up on shelter and citizens advice and it seems totally fine.
I wouldn’t read this from citizens advice as totally fine - see might get
You might be able to get Housing Benefit if you pay rent to:
a close family member who lives somewhere else
...
To get Housing Benefit, you’ll need to show the council evidence it’s a ‘commercial’ rental agreement - like one between a housing association and a tenant. For example, they might ask to see your contract or proof that you’re paying rent. They might also ask for other evidence, like a deposit you paid when you moved in or a gas safety certificate from your landlord.

Your local council might decide you’re not eligible if they think you’re only paying rent to get Housing Benefit. For example, if you’ve been living with a friend and have only just started paying them rent.”

ivykaty44 · 03/11/2019 19:28

If you purchase a BTL and rent to unknown tenant and then give notice and then family member moves into property as tenant then it would be a commercial let

If you purchase BTL and relative moves in as tenant then when they move out you sell property this could be viewed as contrived

Check with council housing benefit department

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