Buying to let to a disabled relative

Transcription

1 Buying to let to a disabled relative A guide for disabled people on claiming Housing Benefit, and for families of disabled people who would like to buy a property for them to rent

2 About Us Housing Options Scotland is a Scottish charity that aims to resolve the housing problems faced by disabled people. This leaflet is one of a series of general information leaflets about different aspects of home ownership. When we use the term disabled this includes people with learning difficulties, sensory impairments and mental health problems. It also includes families who have a disabled person in their households. Buying a home involves financial and legal transactions which can be complex. We provide information and advice, but we are not lawyers or financial advisors. Everyone should seek appropriate professional advice. Introduction This leaflet tells you what you need to know if you are on a low income, or receiving State Benefits, and want to rent accommodation. You may need financial assistance through Housing Benefit to pay your rent, and the rules when renting from a private landlord are different from the rules if you want to rent accommodation from a local authority or housing association. There are certain restrictions on claiming Housing Benefit if your landlord is a close relative. It is important to be clear about the rules and about your rights. Part 1 describes the basic rules for tenants applying for Housing Benefit Part 2 tells you what the rules are if you rent your home from a relative

3 Part 1 claiming Housing Benefit Who can claim Housing Benefit? Housing Benefit is a social security benefit that helps people on low incomes pay their rent. Tenants in any type of accommodation privately rented, housing association or council - can claim Housing Benefit if their income is low enough. Lodgers or boarders, or people who simply pay for the right to occupy a room in shared accommodation, can also claim Housing Benefit. Anyone with savings or investments of 16,000 or more will not be eligible for Housing Benefit, even those on low incomes. However, savings of 6,000 or less ( 10,000 if you are over pension age) are disregarded. Some other people not normally eligible for Housing Benefit are those renting from a close relative living in the same house, and those who previously owned the house, which they now rent. There is more information about this in Part 2 of this leaflet. How to claim Housing Benefit Housing Benefit is paid by the local council for the area in which you live, but there are several ways of claiming it. When you claim Income Support, Jobseeker s Allowance, Employment & Support Allowance or Pension Credit, you will be asked if you wish to claim Housing Benefit at the same time. The Jobcentre or Pension Service will pass your details to the council, who will normally ask you for more information about the tenancy and your landlord. They will not normally need to ask for any more information about your income or savings. Calculating Housing Benefit Before working out how much Housing Benefit you are entitled to, the council must decide how much of your weekly rent is eligible. This is normally the rent itself, and some charges for services such as a warden or

4 a lift are also eligible. Other things included in your rent, like meals, heating and lighting, personal care and support, are not eligible for Housing Benefit. In a local authority or housing association tenancy, all of the rent will probably be eligible for Housing Benefit, unless your home has more rooms than your family needs. The council may decide to restrict Housing Benefit for an exceptionally high rent to an amount they consider reasonable for your requirements. The exception to this is shared ownership agreements where the council cannot reduce your Housing Benefit, either because of the level of rent, or the size of the property. Councils must restrict the rent eligible for Housing Benefit if you are underoccupying the property. In the social rented sector (council and housing association tenancies), the rent on which Housing Benefit is calculated is reduced by 14% if you have one extra room, and 25% if you have 2 or more extra rooms. If you rent from a private landlord, the rules are more complex. Each council publishes a list of the maximum amounts they will pay in Housing Benefit - called Local Housing Allowance (LHA). These amounts relate to the size of your household, and not the size of the actual accommodation. The intention is to allow you to shop around for suitable accommodation that you can afford. When you find accommodation, if the LHA amount is more than your actual rent, you will only get enough Housing Benefit to pay the rent. If the LHA amount is less than your actual rent, you will have to pay the extra out of your other income. The rules about bedrooms are the same for all tenures you are allowed one bedroom for: Every adult couple (married or unmarried) Any other adult aged 16 or over Any two children of the same sex aged under 16 Any two children aged under 10 Any other child

5 A foster child A carer who does not live with you but provides you or your partner with overnight care It is important that you tell the council if you need an extra room for a carer to sleep over, or if your child has a disability that makes it unreasonable to share a bedroom, as they should allow an extra room. Appeals and Reviews You will be given written notice of a decision about your application. If you disagree with any decision about your Housing Benefit entitlement, you can ask the council to reconsider it. You should tell them why you think the decision is wrong, and give them any other information that may be relevant. They will send you a mandatory reconsideration notice telling you what they have decided. If they have not changed their original decision, you can appeal to an independent tribunal, which will look at all the evidence and reach a decision on your claim. Seek advice about what to do as soon as you receive a decision you disagree with. There is a time limit of 1 month in which to ask for a mandatory reconsideration so, even if you want to ask for more information or a written explanation of the decision, make sure you ask them to reconsider it straight away. Topping up your housing benefit If you are awarded Housing Benefit, but do not get enough to cover your rent, you can ask the council for a Discretionary Housing Payment (DHP). This is paid at the discretion of the council in cases of hardship, and can top up your Housing Benefit to the level of your rent. You normally apply for DHP to the Housing Benefit Section in writing (some councils have a DHP claim form), providing as much information as possible about your other expenditure, and the reason you need DHP to pay the remainder of your rent. You may want to get guidance from the council or an adviser before you

6 apply for DHP. Every case is different and will be considered on its own merits. Bear in mind that councils have a limited amount of money for DHPs and you do not have an automatic right to receive them. You cannot appeal against a decision about DHP, but you can ask for the decision to be reviewed. Universal credit The benefits mentioned above are in the process of being replaced by one new benefit Universal Credit. At the moment it is only paid to claimants in certain areas, but it will be rolled out to everyone in the next few years. Housing costs will be paid as part of Universal Credit, and the Housing Benefit rules will largely continue to apply. Young people aged 18 to 21 who are not working will not be entitled to help with their housing costs except in exceptional circumstances. Your Jobcentre will contact you in plenty of time if they are planning to switch you to Universal Credit, and you will have the opportunity to ask for more information. Part 2 - Renting accommodation from relatives Where a tenant lives in the same property as a close relative If you live with parents or other close relatives, it is not generally possible to get Housing Benefit for renting a room in their house. A close relative is defined as a parent, parent-in-law, son, son-in-law, daughter, daughterin-law, step-parent, stepson, stepdaughter, and the brother, sister, spouse or partner of any of these people. The council will have to decide whether you are residing with the relative who is charging you rent. Even if you have your own bedroom, if you share other areas of the house with your relative, you are likely to be considered as residing with them. However, if you live in a granny flat attached to your relative s house, or they have converted part of their house into selfcontained accommodation for you, you may be able to claim Housing Benefit for the rent.

7 Where you rent another property from a relative Many disabled people want to live independently of their families, and parents (or other relatives) may be able to help you to set up your own home. If your family buy another self-contained property and rent it to you, you will normally be entitled to Housing Benefit for the rent. The council will consider whether it is a commercial agreement and check that it was not set up to take advantage of the Housing Benefit scheme these are reasons why you may not get Housing Benefit. They will examine all the relevant facts and circumstances of each case, for example, whether the rent is very high compared to other properties in the area, or whether the property is too large for your household. However, if you and your relative knew that you could not afford the rent without Housing Benefit when the tenancy was set up, this is not necessarily a reason for the council to refuse to pay Housing Benefit. There are special rules if you previously owned the property, sold it to someone, and are now renting it back from that person. You will not normally be entitled to Housing Benefit for that property for 5 years after you sold it, unless you can demonstrate that you had no other option but to sell it. You should seek advice before you sell a property that you intend to rent back from the new owner. This rule does not apply where you have entered into a shared ownership arrangement of a property you used to own. Refusal of benefit If you apply for Housing Benefit and it is decided that you are not entitled, you can appeal against this decision. More details about appeals are given in Part 1. Getting advice This guide is intended only as an overview of the Housing Benefit rules for families and professionals assisting disabled people to acquire suitable

8 housing. The rules are complex and many regulations are open to interpretation. For more guidance please seek professional advice from the Citizens Advice Bureau or your council s welfare rights officer. You may also get advice from your local Disabled Persons Housing Service. If you are thinking about buying a home, or renting from a relative, and just want to talk it over, you can contact us at Housing Options Scotland. Information and advice can also be sought from these organisations: Citizen s Advice Bureau or Rights Office: look in your local telephone directory for your nearest office. ENABLE (which can advise on Trusts and has a corporate trustee service) can be contacted by: Tel enabledirect@enable.org.uk Local Law Centres may be able to help with professional representation at appeals tribunals Contacts Housing Options Scotland Tel: The Melting Pot 5 Rose Street info@housingoptionsscotland.org.uk Edinburgh Web: Housing Options Scotland 2016 Housing Options Scotland (formerly Ownership Options in Scotland) is a registered charity (No. SC027335) and is registered in Scotland as a company limited by guarantee (No. SC180581).