Housing Benefit and rent paid in advance

[FlamingParrot]

I am posting this on behalf of a friend of mine who is in receipt of JSA/HB/CTB. He is renting a flat which is too expensive, leaving him with a considerable shortfall every month because the LHA doesn't cover the full rent, despite it being only a one-bed flat and him getting the one-bed allowance.

Moving to a cheaper flat would make sense, however, it can be difficult to find landlords and/or letting agents who accept benefits claimants. I am aware of the reasons for this after we discussed them on another forum. When a tenant can't provide a suitable work reference, they are often required to pay 6 months rent in advance. The person in question could probably get his family to lend him the money to do this. The question here would be: can you still claim HB if you pay rent in advance rather than monthly? He would be expected to repay the loan and there would be a standard tenancy agreement, etc.

[seduraed]

Re: Housing Benefit and rent paid in advance

I'm not sure. Have you asked the council?

[labman]

Re: Housing Benefit and rent paid in advance

I believe Housing Benefit does not cover any deposit, but as the 6 months advance payment is actual rent, they can have the HB paid directly to them, then after 6 months forward it on to the landlord.

Check the LHA to make sure the full rent is covered.

[SpringerSpaniel]

Re: Housing Benefit and rent paid in advance

The rent will be paid to him every four weeks in arrears thorugh LHA, up to LHA rates. Having paid in advance woudl not affect this. One of the problems is paying rent in advance and then being reimbursed in arrears, creating a cashflow pressure.

However, there may be a minimum term agreed for existing property, eg 6 months, leaving before this would leave him still liable for the rent there unless he could find someone else to take over the lease whom the landlord was happy with. He also needs to enquire whether he can actually find anywhere cheaper to move to, whether any cheaper houisng is actually avaiable. The local authority will sometimes publish a list of landlords and agencies will to accept tenants claiming housing benefit; they may sometimes have deposit assistance schemes. Credit Unions also sometimes have schemes to help with deposit / rent in advance.

If he is in London, the Zaccaeus 2000 project in Islington have a poject did give advice and asistance in this situation. I will try to post a link to this later.

[FlamingParrot]

Re: Housing Benefit and rent paid in advance

Thanks for that, he is in London and the area where he lives borders with another LHA with a much higher LHA which is the one that includes Islington, Hampstead, etc. but his rental area stretches all the way to Barnet & Enfield which are cheaper areas, hence why it would be possible to find cheaper flats.

He has lived in this fat since 2007 so no issues there.

[PlanB]

Re: Housing Benefit and rent paid in advance

He has lived in this fat since 2007 so no issues there.

If he were my tenant who'd lived there for 6 years without problems I would agree to a rent reduction since it's cheaper to keep the tenant you've got than find a new one with all the replacement costs charged by an agent. A lot would depend on how big the shortfall is between his rent and HA and/or whether his HA is due to increase in April.

[SpringerSpaniel]

Re: Housing Benefit and rent paid in advance

If the unemployment or sickness etc is likley to be short term, it may be better for family members to help with the shortfall and/or to try and negotiate a rent reduction, especially if temporary and not too large an amount, as it may cost less than trying to find a new place and move.

[FlamingParrot]

Re: Housing Benefit and rent paid in advance

If he were my tenant who'd lived there for 6 years without problems I would agree to a rent reduction since it's cheaper to keep the tenant you've got than find a new one with all the replacement costs charged by an agent. A lot would depend on how big the shortfall is between his rent and HA and/or whether his HA is due to increase in April.

The LHA actually increased recently and the shortfall is £150/month. Can't see how much the LHA will be in April, the site hasn't got the info yet.

If the unemployment or sickness etc is likley to be short term, it may be better for family members to help with the shortfall and/or to try and negotiate a rent reduction, especially if temporary and not too large an amount, as it may cost less than trying to find a new place and move.

They have been helping all this time but it can't go on forever. In the current market, it's anyone's guess how long the unemployment would last.

[wales01man]

Re: Housing Benefit and rent paid in advance

I can see good scam here if the councils housing benefit was to be paid to someone 6 months in advance how many of the benefit fiddlers would try to claim for 6 months and pocket the cash dont think the OPs friend is like that but there are thousands who are thats why its paid in arrears?

[FlamingParrot]

Re: Housing Benefit and rent paid in advance

I can see good scam here if the councils housing benefit was to be paid to someone 6 months in advance how many of the benefit fiddlers would try to claim for 6 months and pocket the cash dont think the OPs friend is like that but there are thousands who are thats why its paid in arrears?

I never asked whether the council would pay HB in advance, I clearly said his family could lend him the money to make this payment. The question was whether the council would still pay him HB every fortnight even whe he wasn't paying rent every month due to having paid it in advance, the idea being to use this money to pay back the loan.

The whole purpose would be to be able to move to a cheaper flat, as it is now the family are assisting with the shortfall and this is not recoverable while a loan to pay rent in advance would be. Would be a lot easier if landlords and agents agreed to take on HB claimants and/or the council agreed to pay the landlord directly so they could be sure to receive the rent and raise no objections but I think the council will only pay directly to the landlord after the tenant is in arrears.

The deposit shouldn't be an issue because his current landlord is holding 6 weeks deposit which could be used for the new place. No intention of scamming the taxpayer!

[wales01man]

Re: Housing Benefit and rent paid in advance

Iwas not suggesting your friend was trying to scam anyone just giving a reson why rent benefit is paid in arrears do you not think there are many out there who would scam would the rent in advance be a deposit ask a council housing benefits department what the rules are?

[SpringerSpaniel]

Re: Housing Benefit and rent paid in advance

Here is a link to Zacchaeus 2000 http://z2k.org/ an organisation which may be useful both here and to other members. It haas a specialist department trying to help those needing to claim housing benefit (which can inlcude those in as well as those out of work) find accomodation where they will be accepted as tenants. Theere is also help available through them with debt problems, refusal of benefits and council tax. They are based in Islington but I think will help those living anywhere in Greater London.

[SpringerSpaniel]

Re: Housing Benefit and rent paid in advance

One option discussed - understandably - is to move to a cheaper property in the exisitng Borough. Another option though, may be to move into the neighboouring Borough where LHA is more generous. It is also worth taking into consideration whether one or other Borough is more helpful and has better proecuderes for claimming benefit, as they vary quite considerably.