Top up housing benefit

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    Top up housing benefit

    im a recent landlord letting through estate agents who will manage the rent. However the tennants who are moving in are on housing benefit and have been given housing benefit which is less a month than the rent. I know them well and they are prepared to pay the extra without the housing benefit and estate agent knowing. Do i just write up a short contract between us along with a direct debit of the extra funds?

    #2
    The housing benefit does not affect your AST. Your rent is your rent regardless of where it comes from.

    Tenants pay the top up (which is perfectly legal and doesn't need hidden).

    Why would you consider a seperate agreement for it aside from housing benefit and agent?

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      #3
      Well the tennants suggested we kept it quiet from the housing benefit people. Also it would help me to keep it seperate from the estate agent due to the commision wouldnt have to be paid on the extra. I would like it done through the proper channels though. Cant the tennants just inform the housing benefits that they are willing to pay the top up?

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        #4
        Tenants are actually expected to pay the top up and housing benefit should already be aware of your rental amount as part of the AST.

        Their housing benefit will have been calculated based on your original rent figure and although housing benefit do not worry about the top up, they may begin benefit Fraud investigations if the tenant can claim to afford a top up which is more than they are given on benefit to survive.

        You can't hide your true rent from the agent as its included in your AST. You would have to Amend the AST and make a seperate agreement with the tenant which would make no sense at all.

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          #5
          Ah ok. Its only a small amount a month top up. I cant see why they cant just pay it without notifying housing benefit. Unless they are hiding something like you say. Thanks for advice as im new to all this

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            #6
            Tenant has to inform HB dept of nothing, other than total rent due and any change to their circumstances whch may reduce amount of LHA due. Any shortfall must be paid by T on due date. If you want to avoid LA commission (tax deductible), take over the rent collection yourself. (not tax deductible).

            If new LL, take some LL training, with poss NLA or RLA.

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              #7
              It does sound like they are up to something and have something to hide by even mentioning hiding it from housing benefit, but that's not for you to be concerned with.

              They will have already declared the true rent to get their housing benefit at all.

              It isn't worth fiddling with the AST to save a small amount of commission. It could cause you all sorts of problems with rent arrears and eviction in future and as Mariner states, there are tax implications too

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                #8
                So in essence, the tennant could just pay the top up to the estate agent every month without housing benefits even knowing?

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                  #9
                  Yes but as advised not only str housing benefit not interested but they already know the tenant is liable for a top up to you.

                  Housing benefit on a private rental isn't a set amount. It's based on whatever rent you charge and then housing benefit assess what percentage of that rent they will help with.

                  They already know your rent is xxx amount of pounds.

                  As I stated they aren't interested in a small top up but if for instance a tenant agreed to a rental of 2K a month and their benefits were only 1k, they would begin investigating where tenant is receiving extra income from

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                    #10
                    Ah thanks guys. Its only 25 pound extra a month. Im sure they can top that up as part of the rent agreement without being investigated for their benefits!

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                      #11
                      Originally posted by Wright76 View Post
                      It's based on whatever rent you charge and then housing benefit assess what percentage of that rent they will help with.
                      Not so much in that order not that it's too important here. What is the maximum amount of Local Housing Allowance the applicant is entitled to? If that is less than the rent, they get paid the cap. If the rent is lower, they get the amount of the rent.

                      https://england.shelter.org.uk/housi..._allowance_lha
                      I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

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                        #12
                        The rent is 550 but housing benefits are giving them 525. Tennants are prepared to pay the extra 25 pm. Surely i can inform the estate agents who are managing payments about this extra 25?

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                          #13
                          Your estate agents aren't stupid. They will know the amount of LHA your tenant can recieve. Anyone interested can find out by using the link below.

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

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                            #14
                            Yes but all i want to know is if the tennants can pay the extra themselves without the need to inform housing benefits like they want?

                            Comment


                              #15
                              When the tenant claims housing benefit, they normally have to send in the tenancy agreement, so the housing benefit people will know.

                              I would suggest that you don't rent your property to tenants receiving housing benefit if you find it so difficult to understand the system.

                              What will happen when your tenants housing benefit is reduced, and they then have a shortfall of £50 or £100 a month?
                              Last edited by Mrs Mug; 19-01-2017, 09:05 AM. Reason: Further comment.

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