Housing Benefit Overpayment win for client who rented from daughter in law.

This case concerned a claim against our client for Housing Benefit Overpayment of £40,000.  It arose because our client had rented a flat from his daughter in law. However, his son and daughter actually paid the rent. As a result the council had decided that our client was not eligible for Housing Benefit. Accordingly they said the tenancy was not a genuine commercial arrangement.  Therefore  he was not liable for the rent. There were also questions about his means as there were payments into his account from third parties.

Taking Instructions

We immediately submitted a request for a mandatory reconsideration. This included a detailed letter outlining the arrangements between our client, his landlord and his son and daughter. We analysed the bank statements carefully. This work meant that we could show that our client was liable for the rent. We identified lump sum payments he had made to his son and daughter. These sums were repayment of the rent paid to his daughter in law on his behalf.

A further problem was that there were substantial payments into our client’s account from third parties.  Fortunately, our client explained that the payments were for his son. They were rent for an unconnected commercial property. The landlord had been paid. The payments were not therefore our client’s income.

Outcome

We identified several cases supporting our argument that there was nothing to stop relatives renting to each other. We said the transaction was genuine and that there was no Housing benefit Overpayment. This meant that the tenancy was genuine. It had not been established to take advantage of the Housing Benefit Regulations.   As a result, the mandatory reconsideration was successful. The Housing Benefit over payment decision was revised, our client’s claim for Housing Benefit was reinstated and he is due over £7,000 arrears. 

Housing Benefit can be paid for properties rented from a relative.

Regulation 9(1)(l) prohibits entitlement to Housing Benefit where it is believed that the tenancy was entered into in order to take advantage of the  scheme. There is a useful guidance note prepared for Local Authorities which sets out the circumstances where benefit may be refused, or paid.

Who can claim?

Not unsurprisingly you cannot claim Housing benefit for rent paid to a close relative that you live with. A close relative is defined as: parents, step parents, child, step child, brothers and sisters or any close relative’s partner. However, this does not mean that you cannot claim Housing Benefit for a separate property rented from a close relative. Housing Benefit  can be claimed for a separate property. It must be  a genuine commercial arrangement. Councils will ask for evidence such as  a tenancy agreement, a record of rent paid.  The best  evidence is that the property had been previously let on a commercial basis to someone who was not a close relative.