Bizarre Housing Benefit scenario – is this legal?

To clarify further; the daughter will not inherit the property (her siblings will), because if she owns an asset then this may prevent her receiving benefits to fund her care. After her parents have died, her siblings will be nominated as Deputies of the Court of Protection for financial affairs and shall administrate her finances. Currently, her parents are joint Deputies for her.
UC is not applicable at this time as it has not been rolled out in the area where she lives.

Reply to the comment left by Bill irvine at 07/03/2025 – 12:55
Having read your link – you’re clearly the person they should be seeking advice from!

Hi Steve

Nothing complicated about the young lady renting a three-bed property and being charged the 2-bed rate. Under-occupation is commonplace.

She then applies for assistance via UC’s “housing costs” regulated scheme. The regulations spell out a formula (size criteria) that determines the “maximum rent” which is then compared to the “contractual rent”. The lower figure applies. In most LHA cases, the figures are the same.

HMRC plays no part in the process.

Bill

But that scenario doesn’t explain why he was told to charge more rent and pay tax on it.
Surely if the house was in the parents’ name, and they had been charging the higher rate, then, judging what you’re saying, they would have been committing benefits fraud, wouldn’t they? (“The lower figure applies”)
When the parents die (and isn’t it this that we’re being asked to comment on?) of course HMRC will be involved.
As a taxpayer, I’d also hope that some government department would be challenging the will since the intention is clearly to avoid making provision for a dependent.
Sometimes, when we’re all wondering how to minimise the amount of our wages the state takes, we forget that there is a greater body of people concerned only with how much of it they can take…

I’m confused, and a little concerned, that the scenario as described is being perceived as benefit fraud! The landlord wants to charge a rent equal to the 2-bed LHA rate, but is being forced to charge a higher rent by the council. And to be able to pay that higher tent, he is forced to give his daughter his own money, and then pay more income tax on that money when he gets it back from his daughter as rent!!! How can that possibly be fraud???
My thanks to those that made useful comments; I shall share this info’ to see if it helps, but as UC does not apply yet I’m not sure those rules can be applied.

Reply to the comment left by Steve Rose at 07/03/2025 – 12:33
Steve, you write “ In our area, it is also the local council that directly funds any difference between actual rent and the local LHA.”
This isn’t true; councils only pay the rent required by the landlord, or the LHA HB rate the tenant is entitled to, whichever is the lower. A Discretionary Housing payment may be paid by the council, but, as the name states, it is at the discretion of the council and is often a temporary payment.
The only time a council can make up the gap between rent and the LHA HB rate is when the accommodation is provided by an “Exempt organisation”, such as a housing association or housing charity, in which case the pre-1996 rules apply.

Reply to the comment left by Steve Knell at 07/03/2025 – 14:55
Hi Steve Knell,

As I explained in my earlier post, it’s up to the landlord to determine the contractual rent. However, where the tenant is benefit-dependent, like this young lady, most landlords will pitch the rent at the 2-bed rate, otherwise, they could make the rental unaffordable, causing a build-up of rent arrears.

The other Steve misunderstood my earlier explanation about the lower figure applying. It’s quite simple. If the LL pitches the rent at £450 pcm (the LHA rate) and the contractual rent is £500, DWP caps the “eligible” or “maximum” to the £450.

You finish by stating – “but as UC does not apply yet I’m not sure those rules can be applied”. If this young lady is claiming “housing costs” for the first time, she can’t claim Housing Benefit. That’s a fact!

Bill

Reply to the comment left by Bill irvine at 07/03/2025 – 15:39
Well said Bill.
You people slightly confused. Just contact Bill via his website, it’s simple. Either struggle and don’t get paid, or contact Bill to have a chance of getting it sorted.
Or keep talking about it on here.

Reply to the comment left by Bill irvine at 07/03/2025 – 15:39
Thanks Bill. The young lady has been living in the house for several years and claiming HB since she moved in. This bizarre situation has only recently come to my attention. My view is that the case should go to the Lower Tribunal; I took my son’s case to tribunal five years ago when the council refused to pay the 2-bed rate (he needs 24 hour care), and we won the case in less than ten minutes – although it took nearly three years to have the case heard!

Hi Steve Knell

You started your post – “Some parents I know recently purchased a 3 bed detached bungalow for their severely disabled daughter to live in”.
Now you tell us she’s been there for several years – really!
Completely wasted my time.

Bill