Friday, 19 September 2014

Tenants will soon be able to keep their benefits and rent from lodgers

Lodger rules to ease impact of bedroom tax

Tenants will be able to keep rental income from lodgers without it affecting their benefit entitlement under proposed rule changes.

The major impact of the move, which the Department for Work and Pensions described as a ‘positive side effect’, is that it will help under-occupying tenants pay the bedroom tax. The change was made possible because the government has amended what counts as income in its draft regulations for universal credit.

Currently, claimants must declare income from lodgers. This can affect their entitlement to housing benefit, jobseekers’ allowance and income support.

Under the new regulations, from October 2013 tenants will be able to keep income from lodgers and retain full entitlement to benefit. The room let to a lodger will, however, be classed as a spare room and fall under the bedroom tax, which will be £14 per week on average.

Lord David Freud, welfare reform minister, has said taking in lodgers could be a solution for tenants hit by the tax, which affects social housing tenants of working age from next April. Between April and October, when universal credit begins, tenants’ entitlement will continue to be affected if they take in lodgers, but they will be temporarily exempt from the tax during this period.

Lord Richard Best, a crossbench peer, said the change provides a ‘real incentive’ to take in lodgers. He said: ‘I think David Freud deserves congratulations on removing barriers to this way of boosting incomes and getting at least some people housed at this mostly so depressing time for housing.’

However, Lord Best added that in lots of areas there is little demand for lodgers, some tenants do not want strangers in their homes, while some housing associations may seek to block it because of concerns about strangers in tenants’ homes.

Sam Lister, policy and practice officer at the Chartered Institute of Housing, welcomed the move but said the number taking in lodgers is unlikely to be high. He said: ‘The whole thing [the bedroom tax] is designed to make savings so if they thought everyone would take in lodgers they would not allow it.’

Council tenants have the right to take in lodgers as long as they don’t breach overcrowding rules. Under their tenancy agreements housing association tenants can usually take in lodgers with the landlords’ consent.

Readers' comments (59)

  • Rick Campbell

    It seems to suggest that the room still attracts the bedroom tax /penalty but it is possible that the tenant will charge the lodger an amount to cover the penalty.

    However, there maybe overzealous civil servants who would deem taking lodgers into 2 spare bedrooms would be a commercial venture.

    The good Lord Freud certainly deserves something and 'come the revolution' he and his ilk might just get it.

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  • Enter the era of Rackmanite tenants on benefits? On the other hand, a faint chink of light for some tenants.

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  • Rick Campbell

    So, as I see it -- tenant could get financial support of say, £110 for 3 bedroom house -- then a lodger gets up single room rate so that's a lot of dosh going into the same house as financial support.

    It's a bit crazy to me.

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  • Can the lodger claim H/Benefit or has the lodger got to be employed?

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  • Rick Campbell

    As I see it Christine, the lodger can be in or out of work and may be able to claim LHA (which around here is just over £100 a week).

    I anticipate that Joe Halewood will elucidate further in due course.

    If someone has 2 spare bedrooms -- even more potential financial support?

    It's a bit crazy to punish the social housing tenant by about £25 or so and then end up coughing up loads more taxpayer dosh for a couple of lodgers.

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  • patatwirra

    would Freud take in a lodger? i would rather starve,

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  • Iron Fist

    Lodgers being encouraged - the Government's relentless march back in time continues unabated.

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  • Colin McCulloch

    Will MPs be forced to take lodgers in spare bedrooms in their second homes? Didn't think so.

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  • Iron Fist

    You can picture the scene as the lodger leaves the bathroom: "Sorry Mr Shapps, I'd give it a few minutes if I were you!"

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  • Rick Campbell

    Colin -- of course not, they'll continue to get financial support from the taxpayers as well as huge amounts of dosh for living expenses whilst the poorest in society are not only demonised but also hounded further into poverty.

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