Universal Credit for lodgers

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    Universal Credit for lodgers

    Hello, I am new here and hope you can help.
    I have a lodger in my family home, who, due to the corona virus is not longer working. She is self employed but has not been self employed long enough to claim through the govt self employed initiative so is now claiming universal credit.
    She has contacted UC and they have said they will not pay her full rent and that as her landlady I have to break down what she contributes to bills, council tax and mortgage. Do they have to do this? She is on an excluded licence agreement under the rent a room scheme and pays a monthly rent. I have never worked out how much her rent contributes towards those bills and don't understand why Universal Credit are asking for the breakdown. I should add that I have had a tenant previously who applied for universal credit and was never asked to provide this breakdown.
    Can anyone shed some light on this as my poor tenant is rather confused, as am I.
    Thank you

    #2
    The DWP usually/often ask for a breakdown. but they shouldn't and have no need to with a private rental as it makes no difference whatsoever to her UC Housing Element for a private rental.

    Whatever she pays (inclusive of bills or not) is what her UC-HE will be, up to LHA rate.

    Such a breakdown is required for social sector renters, but not for the private sector.

    See paragraph 7.2 of the governments UC guidance for landlords (my bolding):
    https://www.gov.uk/government/public...-for-landlords

    Landlords in the social rented sector are responsible for clearly setting out to the tenant which of their service charges are eligible, in accordance with the eligible service charges regulations and guidance. The claimant will report this as part of their claim.

    In the private rented sector, a tenant’s total rent is usually made up of both rent and service charges, which are not separately identifiable.

    DWP will not need to collect separate service charge information for the private rented sector group as DWP will pay the lesser of the total rent or the appropriate Local Housing Allowance.
    However the poor quality UC staff training says that they should get a breakdown from socila sector tenants and so they just tend to ask for one in all cases.

    And if she's got one of the many DWP staff who has been moved from their normal duties to process UC claims then they are not going to know that distinction between private and social rentals.

    It's just one of the many stupidities with poor UC staff guidance saying something different to what benefit law actually requires.

    The DWP do need to see something that says she is a genuine lodger and how much rent she pays but there is nothing other than their own training/guidance that says it needs to be broken down.

    However I'd suggest that it's probably going to be easier to provide the DWP with something rather than trying to fight them.
    In the end it won't make any difference to what she gets as UC-HE.

    Comment


      #3
      Thank you, nukecad, that is very helpful.

      Comment


        #4
        I should also add that she has been told to change the amount she pays in rent, to her rental less the amount I state is her contribution towards bills.

        Surely this can't be right?

        Comment


          #5
          What does the lodger agreement say about rent and/or bills?

          If eg rent £350/month that's one thing but if rent £350/month including broadband, electricity, council tax that's another
          I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

          Comment


            #6
            It doesn't say anything about the lodger paying the bills, just the rent, but I, as 'Licensor' agree to pay the utilities and council tax

            4. LICENSOR'S OBLIGATIONS
            4.1 The Licensor agrees and undertakes:
            (a) to provide the Licensee with one set of keys for the Room and Property;
            (b) to pay to the relevant suppliers the Utilities Costs.
            (c) to pay the council tax in respect of the Property;

            It is an excluded licence agreement with lodger.

            Comment


              #7
              I do then think you need to list those utility & council tax costs she is likely to cost you. IMHO much simpler to leave that clause out.

              re
              ....It is an excluded licence agreement with lodger....
              That may well be what the paperwork says it is, but the only way of finding out exactly what it is is if it got to court: A judge might decide it was, say, an AST or she was an occupier with basic protection.

              See e.g. Street V Mountford...
              https://en.wikipedia.org/wiki/Street_v_Mountford
              I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

              Comment


                #8
                Originally posted by JazzCP View Post
                Surely this can't be right?
                No it is not right.
                The only thing I can think is that she is talking to a social renter who does not realise that there are different laws for private renters.

                Comment


                  #9
                  Thank you both for your replies. Having prepared a letter and worked out an approximate contribution to the utility bills, when my lodger got a call back where she was told it wasn't necessary and the full amount had been approved!

                  Nukead, as you mentioned, I think the person dealing with my lodger's claims has probably been moved from another area.

                  Comment


                    #10
                    Hi,

                    I've also read the T&C's for universal credit and I am baffled as to why they wanted this information. I think Housing Benefit Element only covers rent and if you say for example, that rent of £350 for example includes council tax and utliltiy bills then I think they want a breakdown so they know and they can deduct money as they don't pay for bills and stuff like that etc... I don't know I could well be wrong though.

                    I'm currently on Universal Credit myself and I'm thinking moving into a spare bedroom in a friends mortaged/owned house possibly, and we have both been having conversations about it recently and I'm finding it really difficult to understand how would be best to sort things out such as bills and rent. I've seeked advise from Citizen's Advice Berue and Shelter UK and neither have been helpful at all.

                    Does anything know:

                    1. For Universal Credit Claiments, is it best for the Resident Landlord to charge rent and then also state in the agreement that the Lodger is responbile for their fair share of Monthly Council Tax bill and Monthly Utility Bill? eg 50% etc...?? ...... or is it better just to have the agreement state that the Rent includes everything???.
                    2. Where can I actually find an official geuinune Lodger's Agreement Template/Example that is up to date and for England & Wales and is all legit and correct etc...??
                    3. Also, What does the Resident Landlord (Owner) need to do beforehand? I'm aware he'd need to contact his mortage lender and gain their permission, and also contact his home insurance company and possibly add me on the cover, but is there anything else legally that he needs to do?


                    I'd apprecite some help as I find it soo confusing and my friend who may become my Resident Landlord is also very confused and doesn't even know where to begin with writing up such an agreement like a lodger's agreement.

                    Thanks

                    Comment


                      #11
                      Originally posted by dcee539 View Post
                      I'd apprecite some help as I find it soo confusing and my friend who may become my Resident Landlord is also very confused.
                      Have a look at the website below. Hope it helps.

                      http://www.lodgerlandlord.co.uk/

                      Comment


                        #12
                        For UC purposes it's probably better if the Tenancy Agreement includes the lodgers share of the bills.

                        If the bills are not included on the TA then the DWP may well decide that they are not 'Housing Costs' but 'Living Costs', if they are stated on the TA as part of the rent then they are clearly housing costs.

                        (I know it seems odd because they are the same costs, but that's benefit law for you. There is a rationale behind that particular one- if they are housing costs, on the TA, and part of the rent then you could be evicted for not paying them, if living costs, not on the TA, then you can't be evicted for not paying them).

                        If itemising the amount for bills then it may be better to make that a fixed amount rather than variable.
                        In a private rental it doesn't need to be specified to UC how much of the rent is for bills, but they'll no doubt ask anyway even though it's irrelevant, that's the original topic of this thread.

                        UC will then pay the lower of the total rent/housing costs, or the lodgers applicable Local Housing Allowance.

                        Comment


                          #13
                          Originally posted by nukecad View Post
                          For UC purposes it's probably better if the Tenancy Agreement includes the lodgers share of the bills
                          And if the landlord shows this thread to the DWP, the tenant will be deemed not liable to make payments, as the tenancy and any service are clearly contrived to take advantage of the UC scheme!

                          Oh, and for all wondering why the DWP need this information, there are no T&C's regarding benefits, just laws. This information is needed as per regulation 25 (20 and schedules 2 and 4 of:

                          The Universal Credit Regulations 2013. You can find them here:

                          https://www.legislation.gov.uk/uksi/...lation/25/made

                          Comment


                            #14
                            To correct Bob.

                            As I already pointed in post #2 above the current UC legislation specifies that the service charge/utility bills information is required for SOCIAL rentals.
                            This is because they often include service charges other than utility bills, which are listed and defined in the legislation.
                            See UC regs 2013, Schedule 1, para 8. "Additional conditions: social rented sector renters and owner-occupiers"
                            It is not a requirement for PRIVATE rentals.

                            What legislation doesn't say is often as important as what it does say, in this case it specifies that those additional conditions apply to 'social rented sector renters and owner-occupiers', it doesn't say anything about private renters so it does not apply to private renters.

                            This is evidenced by post #9 where the lodger was told by the DWP that a breakdown was not required..
                            Having prepared a letter and worked out an approximate contribution to the utility bills, when my lodger got a call back where she was told it wasn't necessary

                            Comment

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