housing benefits- rent paid up front

[Loumg]

Can anyone advise. My son and his girlfriend needed a guarantor but as my husband and I are retired could do it so we paid 12 months rent up front for them in lieu of a guarantor. They are paying us back each month. They have a baby due and will be claiming benefit s then. Will they still be able to claim housing benefit or have we made them worse off by helping them?

[FlamingParrot]

Re: housing benefits- rent paid up front

Hi and welcome

They should be able to claim housing benefit as long as they are paying rent, the councils will ask for the tenancy agreement as evidence rather than monthly rent receipts. If they ask for proof of monthly rent payments then they can just show the receipt for the rent paid in advance to the landlord or letting agents and say it was a loan from yourselves instead of a signature as guarantors.

With a baby the amount they can claim as their local housing allowance should be higher. A couple without children are only entitled to one bedroom but they should be entitled to two bedrooms once there is a child. :thumb:

[Snoopy1948]

Re: housing benefits- rent paid up front

I would suggest that the local council can only discount any apparent 'gifting' of the years advance rental subject to a letter from yourself proving the event and evidence that it was indeed a loan and regular and committed repayment can be shown. Obviously a contract drawn up in respect of this and signed by all parties would have been an advantage bearing in mind the sensitive nature of making a housing benefit claim on it.

[Crazy council]

Re: housing benefits- rent paid up front

Hi, it could/would probably be considered advance rent, and therefore, would have no affect on there HB claim. Its only like extending the usualy 2 months rent in advance for 12 months, its not that uncommon for young couples as well. I used to think years ago that the housing rental market would end up with large deposits/advances being paid,

[Berniethebolt]

Re: housing benefits- rent paid up front

As far as i am concerned it would be no different to me paying the rent upfront out of my savings and then using the HB to live on/replenish those savings. The only caveat would be if I had paid the rent upfront to deliberately reduce my savings to below the threshold of what you are allowed.

The danger with a local council, or so i have found is that if something doesn't fit nicely into a box they suspend payments so I have only ever told them what they absolutely need to know while at the same time making sure I stay within the regulations

[Snoopy1948]

Re: housing benefits- rent paid up front

I totally agree, I just think that it's the aspect of a third party paying the rent and therefore a 'gifting' issue arising. There is also the issue of the parent being paid back the full loan and having no legal claim on any housing benefit issued. That of course is a position of trust and of course would be a lot easier for the claimant if regular ( including any underpayment ) payment was made as housing benefit. When I worked in revenue enforcement for a local authority, 'gifting' to benefit claimants was I believe ignored unless it was regular but as belts tighten, local authorities mat consider taking ALL income into account, and I have recently received a questionnaire from my current local council asking for public opinion on this very matter.

[Snoopy1948]

Re: housing benefits- rent paid up front

Berniethebolt, a man after my own heart! I worked as a revenue enforcement officer for a local authority for 23 years, retired last year, and as you say, having informed discretion on 'a suitable need to know basis' can smooth people's affairs over very nicely, providing there is no infringement of regulations. I once assisted on a housing benefit application and we declared the holding of £2 worth of premium bonds within the held capital. The claim was delayed until documentary proof was supplied of the £2 holding which took ages. You can see where I am going with that one!

On the question of rent paid up front, beyond the normally accepted two months, I think we will see more and more of this as more people apply for tenancies with poor credit ratings and local councils should accept that without reservation, only enquiring into the origin of the funds. Yes, once you are a benefit claimant, you have to lay yourself bare!

[Berniethebolt]

Re: housing benefits- rent paid up front

On a sort of related but separate issue when I was first trying to get my HB (which took 4 months of frustration -they asked for documents, I provided, they asked for something else ) my mother lent me money to pay my rent and keep a roof over my head . I went to see a solicitor about some matters and applied for legal aid, because there was money being paid into my account from Mum , even though it was being paid out again to my LL I was refused legal aid .