Claiming HB for property where rent has been paid in advance?

Hi all,

Any advice on this one would be appreciated.

I have a client who has just received £25k Personal Injury compensation from his former employer.

The only benefit he currently receives is irESA. He is residing with his mother in her property but desperately needs to move out (his own MH severely deteriorated following a head injury and is being badly affected at present by his mother’s MH - supported in medical evidence).

Now he has the payout he wants to rent a small place privately - the only way he can get a private tenancy in the area is by paying the full year’s rent up front.

Is there anything that would prevent him claiming HB for this property?

Yes, why is the only way he can get a private tenancy in the area is by paying the full year’s rent up front?  Unusual to say the least.

Thanks Tony.

My concern was that once he has paid into a landlord’s rent account, that money will no longer be disregarded as PI compensation but would be capital that would potentially be available to him - particularly down the line if HB was awarded and the rent account continued to hold in excess of £6k.

With regard to the paying rent up front - this is what clt has told me today over phone - suspect he’s just taken what a letting agent has told him at face value. He has appt with housing advice to discuss renting privately so suspect he may have other options available - just wanted to some more solid advice before meeting with him.

Having said that I rent privately in the same area as he is looking to live (the area he grew up) and I would not be particularly surprised if he was unable to get a tenancy in this area without paying the full term up front (popular area, properties tend to be on the market for a few days at most, 2 universities within walking distance so lots of students and young professionals, high rents - very few HB claimants in my experience).

tbidmead - 16 July 2014 05:06 PM

My concern was that once he has paid into a landlord’s rent account, that money will no longer be disregarded as PI compensation but would be capital that would potentially be available to him - particularly down the line if HB was awarded and the rent account continued to hold in excess of £6k.

I’m not quite sure I follow, maybe I’m missing something.

The payment is disregard for 52 weeks from the date it’s paid, irrespective of what it’s used for, so he can do whatever he wants with it.

HB is still payable, even if he’s paid it, in full, in advance.  So not sure what the problem is apart from timing.

Thanks for all your help.

tbidmead - 16 July 2014 02:56 PM

Hi all,

I have a client who has just received £25k Personal Injury compensation from his former employer.

 

at a slight tangent, this £25K should be in a PI trust.  he/his solicitor have 52 weeks to get it into one before he loses all his means tested benefits.  if his solicitor hasn’t already advised/sorted that, ensure it gets done pronto.
and I note you refer to mental issues - are you clear he has capacity and there’s no need for CoP etc?

Tony Bowman - 18 July 2014 01:45 PM

The strength of your post worries me Claire.

My client with a similiar amount of money doesn’t want to put it in trust, which isn’t something I intend to argue about - it’s the clients choice.

But now you made me think I’ve missed something. Is there any reason other than protecting benefits for which the money ought to be tied away in a trust?

No; but original poster didn’t mention PI trust (if he had, he wouldn’t have needed to ask the question as the capital would be disregarded in any event). Therefore, I have a concern that the person’s solicitor has missed something important, and is therefore negligent if it ain’t sorted pronto.

Clearly client has choice whether money goes in to trust or not, but for that amount of money, i cannot see why they would not, unless they had definite plans for that sum that would leave them still entitled to their means tested benefit at the end of the 52 weeks.

Any such advice to a client should of course be set out in writing, and if client says no, their “no” should also be confirmed to them in writing with confirmation that such “no” was against your advice….. otherwise, one faces a prof neg claim when client realises they were in fact wrong to say no.

also, original poster commented that his client had mental health issues AND a head injury which automatically will raise queries in my head about capacity.